Top glove to maintain dividend

  • Business
  • Thursday, 07 Apr 2005

BY Hanim Adnan

Top Glove Corp Bhd expects to maintain a good dividend payout of at least 30% of the group's net profit for the current financial year ending Aug 31, executive chairman Datuk Dr Lim Wee Chai said. 

“We hope to maintain our good dividend payout record in line with the group's positive outlook towards posting continuous growth and better results in the forthcoming quarters,” he told reporters after a briefing for fund managers, analysts and the media in Kuala Lumpur yesterday. 

In the financial years 2003 and 2004, Top Glove had consistently rewarded shareholders with net dividend payouts of more than 30% of net profits. 

“We have transformed into a fast growing group registering an average compounded annual growth rate of 40% over the past nine years. 

“The group is targeting for annual growth of 35% or to double revenue and profits every two and a half years,” Lim added. 

In the second quarter ended Feb 28, Top Glove reported a 62% increase in pre-tax profit to RM16.05mil on the back of RM148.75mil in turnover. 

Datuk Dr Lim Wee Chai

Lim said Top Glove was currently looking at the possibility of setting up a vinyl glove plant in China and a latex concentrate plant in Thailand within the next two years. 

“We plan to make a bigger investment in a new plant in the northern part of Shanghai,'' he said. The company's existing plant in Shanghai has a paid-up capital of US$3mil. 

As for Thailand, Lim said the company was still considering whether to acquire or set up a new latex concentrate plant, which would involve an investment of between RM10mil and RM20mil. 

He said the group had set aside between RM60mil and RM70mil for capital expenditure this year. 

“Top Glove is confident of maintaining its current position as the world's largest rubber glove manufacturer in the next three years through continuous expansion and improvement in production capacity.” 

Lim said Top Glove was targeting to have 14 factories under its stable from the current 10 by the end of next year. By then, the combined production capacity of all the group's factories will be 24 billion pieces of gloves per year. 

By end-2005, it will operate 12 factories producing 18 billion pieces of gloves per year compared with the 13.4 billion pieces currently produced by its 10 factories, of which seven are in Malaysia, two in Thailand and one in China. 

On the local front, the group's 11th and 12th factories in Klang, Selangor will start operation this year.  

Lim said plans were afoot to construct two new factories near the group's factories in Klang by the fourth quarter of this year and the second quarter of next year, respectively. 

“On average, we will invest between RM25mil and RM30mil in each factory in Malaysia,” he added. 

Going forward, Lim said Top Glove was targeting to increase its share of the global rubber glove market to 24% by end-2007 from 12% currently. 

The world demand for glove is estimated at 100 billion pieces per year, and growing at 12% annually.  

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