Shah Alam, Malaysia – Top Glove is set to start up three new production facilities by the end of next year to meet the growing demand for gloves.
In a quarterly report release on 16 March, the Malaysian glove manufacturer said it expected global demand for gloves to continue growing by between 6% and 8% a year.
To meet new demand, the company said it had “almost completed” the construction of a new facility, Factory 30 (Klang), which is expected to start production by May 2017.
The plant has a capacity of 4.4 billion gloves per annum.
Two other new facilities in Klang, Factory 31 and Factory 32 will respectively start operations by November 2017 and December 2018, with a production capacity of 2.8 billion and 4.8 billion gloves per annum.
By December 2018, said the group, Top Glove is projected to have 632 production lines and a production capacity of 60 billion gloves per annum.
Additionally, the company has launched operational efficiency improvement measures at its plants including automation projects.
Top Glove said has been working with government agencies and domain experts to develop Industry 4.0 applications, which it is “in the process of implementing throughout its factories.”
Manufacturing process improvement and price hikes have helped Top Glove gain an 8% increase in revenue in the second quarter of 2017, ended 28 Feb.
The corporation announced that the group achieved RM851.5 million (€10.9 million) in Q2 despite “challenging environment” with profit before tax and profit after tax also on the rise, at RM102.7 million and RM83.2 million, respectively representing an increase of 14% and 13% against first quarter.
Sales volume eased 1% quarter-on-quarter, owing to shorter working months during the quarter in review, but was up 9% compared with the same quarter in 2016.
According to Top Glove, the strong performance was due to “improvements adopted across the manufacturing process”, which maintained good quality while managing costs efficiently.
“Upward price revisions implemented, the effects of which were felt in 2QFY17, were also instrumental in normalising sales revenue figures vis-à-vis the previous quarter,” the group added.
Year-on-year, sales grew by 23% but profit after tax was softer by 21% versus the same quarter last year on the back of sharp increases in raw material prices.
“We have delivered a healthy set of numbers for our 2QFY17, despite a challenging business environment with sharp increases in manufacturing cost,” said Tan Sri Dr Lim Wee Chai, Top Glove executive chairman.
“This shows that our approach of focusing on internal factors within our control, such as quality and cost efficiency, and not external factors, is the correct way forward for our business,” the company boss added.
Top Glove said it is exploring mergers and acquisitions and joint ventures with good valuations in similar or related industries, as part of its operational strategy.
In terms of higher costs for raw materials, the glove-maker said it was of the view that raw materials prices will stabilise at current levels or possibly be on the downtrend, going forward.