Big 4 glove makers to contribute RM400mil to Covid-19 efforts


KUALA LUMPUR: Budget 2021 has proposed that the four leading rubber glove manufacturers in the country will contribute a total of RM400mil towards efforts to combat the Covid-19 pandemic.

The four firms comprise Top Glove Corp Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan Rubber Industries Bhd.

At the tabling of Budget 2021, Finance Minister Tengku Zafrul Abdul Aziz said the companies have committed to help cover some of the costs, which include vaccine and medical equipment costs.

"The government appreciates the commitment of the private sector, NGOs and individuals who contribute during this difficult period," he said.

In the lead up to the tabling of the Budget, there was market talk of a possible windfall tax imposed on the rubber glove companies in light of the supernormal profits achieved during this period.

All four of the leading glove makers saw revenues and earnings hitting record highs as demand for rubber gloves surged and average selling prices (ASP) rose in tandem.

Top Glove, the world's largest rubber glove maker, recorded a 412% year-on-year jump in net earnings to RM1.87bil in its recently concluded financial year, while revenue grew 50.72% to RM7.24bil.

Bolstered by rising valuations, the company has since become the second-largest by market capitalisation on Bursa Malaysia, followed by Hartalega in third place.

Prospects for the gloves sector remain bright as analysts forecast that the demand for rubber gloves will remain high over the coming months with ASPs continuing to rise.

"We highlight that industry ASP for months of Sept to Dec is rising monthly by between 10% to 30% indicating supply tightness have further propelled ASP higher," said Kenanga Resarch analyst Raymond Choo in an October note.

At the end of market trading today, Top Glove was up 20 sen to RM8.50 a share, Hartalega gained 20 sen to RM18.20 a share, Supermax jumped 52 sen to RM9.78 a share and Kossan gained 29 sen to RM7.49 a share.
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!
   

Next In Business News

RHB establishes committee to drive sustainability agenda
Hong Leong Bank's digital transformation to build world-class digital capabilities
Amanat Lebuhraya Rakyat successfully prices RM5.5bil AAA-rated Sustainability Sukuk Murabahah
Sterling slips back with euro on persistent UK fiscal angst despite BoE bond-buying
Ringgit rebounds vs US$ amid volatile forex market
Sime Darby pulls ahead in EV offerings
Bursa joins global rally as UK central bank pivots to bond purchasing
Trading ideas: Central Global, Ageson, Heng Huat Resources Group, Kim Loong Resources and Scientex Packaging
Survey finds cost and labour issues the main hindrance
RHB Bank issues RM500m notes

Others Also Read