KUALA LUMPUR: Malaysia’s largest rubber glove manufacturer Top Glove is investing US$1 billion over the next five years to expand its production capacity, in order to meet surging demand for protective gloves amid the COVID-19 pandemic.
Speaking in an exclusive interview, Top Glove’s executive chairman and founder Lim Wee Chai noted that the company’s third-quarter earnings ending May 31 jumped more than three times to hit almost US$90 million, while its share price has quadrupled since the beginning of the year.
The best quarter has yet to come, he declared, as the demand is still “very strong”.
“We are now only just (getting) started. There are more good quarters to come. It is only the first quarter and we are seeing good results … The next five or six quarters can be even more in terms of sales revenue and profit.”
Its nitrile gloves, he said, are oversold by 360 days, which means that customers will have to wait for up to a year to receive their orders. Most buyers are state agencies and many are willing to pay a higher price in order to secure their deliveries.
Malaysia is reportedly producing around 65 per cent of the world’s supply for rubber gloves. There has been an exponential jump in demand for rubber gloves since the pandemic.
Dr Lim, 62, who started the company about 30 years ago with his wife Tong Siew Bee, took the company public in 2001. Top Glove obtained dual listing on SGX in 2016.
Top Glove Corporation now has 45 manufacturing facilities across the country and controls over a fifth of the world’s multi-billion dollar rubber glove industry.
With all its factories running at almost full capacity, Dr Lim wants to add up to 10 more factories over the next two years.
“Usually we build one or two factories a year, this year we are building more. It is good times, we build four or five factories this year and next year, we will also build another four to five factories.”
Top Glove Corporation’s current production capacity is 75 billion pieces of gloves per year. By 2021, this will be increased to close to 100 billion, he said.
A firm believer of cutting-edge technology, Dr Lim said Top Glove must constantly invest in research and development.
The company has more than 600 researchers and half of them are engineers, while the rest are chemists and scientists, he said.
“Traditional business grows very slow, 5 per cent to 10 per cent every year. But using technology, we can skill up … We find something new, something better – digitalisation, internet of things, artificial intelligence, all these are very important.”
In particular, automation and artificial intelligence have saved costs and improved efficiency. They have also enhanced the quality of the products he said.
By harnessing technology, between 1,000 to 2,000 workers are made redundant each year. They are then deployed to new factories, he explained.
The number of workers to produce per million gloves has been reduced significantly, from five to 10 a decade ago to less than two today, he also said.
LOFTY TARGET TO BECOME FORTUNE GLOBAL 500 COMPANY
Dr Lim who is a father of two grown children, has set lofty targets for himself and the company.
He wants Top Glove to become Malaysia’s second Fortune Global 500 company after Petronas by 2040, with an annual revenue of US$35 billion.
“In order to grow big, to become a Fortune Global 500 company, we need to grow 30 times … almost 500 factories. Now we have 45 factories,” he told.
“It is very possible, because over the past 20 years, Top Glove has grown almost 200 times … I think (it is) not that difficult provided we get the right team of people.”
Dr Lim added that he intends to live till 120 years old, by adhering to a strict health and fitness regime. He is a yoga enthusiast and plays badminton as well as golf twice a week.
He also hopes that his staff will follow his regime on hygiene, health and fitness as well as work ethics.
Top Glove has employed seven nutritionists, a team of doctors, dentists and nurses to look after its 20,000 employees.
“People are the most important asset for the company or any organisation. That’s why this asset, must value it, must take care so that everybody is fit and healthy,” Dr Lim said.
Last year, the company announced that it would bear all recruitment-related fees for its foreign workers. On Monday (Jul 13), the company said that it would implement a programme that will allow workers who have paid recruitment fees to agents in their source country to be reimbursed.
He added: “(During) good times, we have to work hard, work smart … During bad times, difficult times, actually we learn more. We tend to innovate. Human beings during difficult times, they tend to work extra hard, think hard and have new ideas”.