LEADING latex glove manufacturer Top Glove Corp Bhd is targeting a 16.6% increase in net profit to RM21mil on revenue of RM220mil for its financial year ending Aug 31, said its president and managing director Dr Lim Wee Chai.
Revenue is expected to increase by 30% compared with last year, he said, adding that Top Gloves performance in the first quarter ended Nov 30, 2002, showed it was on track to meet the targeted figures.
The company recorded a net profit of RM5.1mil on revenue of RM55.1mil for the first quarter, compared with RM4.5mil and RM42.5mil, respectively, in the corresponding period of the previous financial year.
Lim said the company would be completing its China joint-venture plant in Zhangjiagang, Shanghai, by April. The plant will boost its production capacity by 56 million pieces of gloves per month.
The China plant will be producing PVC gloves mainly for export. In the first phase, the plant will have eight production lines, but we expect this to increase to about 40 lines in 2006, turning out 280 million pieces per month, he told a press briefing after chairing the companys AGM and EGM in Bukit Kiara yesterday.
Top Gloves initial investment in the China plant was US$3mil. The plant is 55% owned by Top Glove, 30% by two Chinese companies and 15% by a Thai company.
The company also has investments in Thailand. Besides a plant in Phuket, another in Haadyai started operations in December last year, running six lines. In future, our 18-acre Haadyai plant will be the biggest of all our plants, with 50 lines, he .
With Top Gloves expansion plans going full steam ahead, Lim is confident of increasing its production capacity to 7 billion pieces from close to 90 lines by the end of this year.
Lim said the outlook for the rubber glove industry is bright. The industry is very stable, with a growth rate of about 5% to 8% worldwide every year, he said, adding that Top Gloves performance in the second quarter is expected to be better than in the first. However, the company did suffer slightly when the cost of latex began rising in October last year. Derived from natural rubber, latex constitutes between 40% and 50% of production cost.
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