Wednesday, 12 January 2011

Top Glove To Invest RM160 Million In New Plant In Cambodia

via CAAI

KUALA LUMPUR, Jan 11 (Bernama) -- Top Glove Corporation Bhd, the world's largest rubber glove maker with 20 factories mainly in Malaysia as well as in Thailand and China, will invest RM160 million to set up a new plant in Cambodia as part of plans to expand its production capacity.

Its chairman, Tan Sri Lim Wee Chai, told an analysts' briefing today that the investment in Cambodia including land, planting and facilities over a concession area 8,000 hectares would cover a period of six years.

He also said that production from the group's 20 factories by August this year was expected to increase to 41.25 billion pieces based on 459 production lines compared with 33.76 billion pieces per annum currently based on 379 lines from 17 factories.

The company, which has 10,900 employees, exports its products to more than 180 countries. He said China and India were large untapped markets where current gloves usage was low.

Three new factories with two in Klang and one in Ipoh, as well as one in Sadao, in Thailand, would add 7.5 billion peices to the expected production by August this year, he said.

Lim also said that Top Glove would focus more on producing nitrile gloves as they command better margins and were not subjected to the volatility in latex prices.

In its first quarter ended Nov 30, 2010, its production mix for nitrile was seven per cent, meanwhile its nitrile production for December last year was 10 per cent.

"We have a large number of nitrile raw material manufacturers in Malaysia, so we have better cost advantages over China in terms of raw materials and labour," he said.

Top Glove chalked up a lower pre-tax profit of RM44.4 million in the first quarter ended Nov 30, 2010, from RM86.6 million in the same period in the previous financial due to higher latex prices and continued weakening in the US dollar coupled with the time lag in passing on the higher costs to consumers.

However, revenue was higher at RM491.5 million compared to RM472.3 million previously.

In addition, demand for rubber gloves, which has been normalising coupled with the excess capacity situation, have also impacted the industry.

At the same time, customers kept their inventory level at a minimum level due to high selling prices of latex gloves, which reflected the increasing cost of latex prices.

Nevertheless, this adverse situation will possibly lead to further consolidation among the industry players, Lim said, adding that the company was in a good position to further enlarge its business when opportunities arose.

Lim said that demand was expected to pick up over the longer term especially from the healthcare sector and emerging market.

No comments: