TOP GLOVE Corporation Bhd, the world’s largest rubber glove manufacturer, had been on top of the world for months last year after the unexpected deadly Covid-19 pandemic catapulted the company’s earnings through the roof.
But since last July, the homegrown multinational company has been shaken by continual negative news linked to poor labour treatment that has dented the reputation of the group and its management. This has also caused the record high share price of the fundamentally strong company to sink below analysts’ target prices.
Labour activists reportedly funded by the West have been making allegations linked to ethical trade and labour practices against Top Glove. However, to the credit of the company, it acted promptly by hiring labour consultants to correct the wrong and longstanding practices – legacies from its SME (small/medium enterprise) days.
Top Glove’s Malaysia-made gloves have been banned in the United States on alleged “forced labour” charges. Though seen as ridiculous to many in the Malaysian context, Top Glove chose to do the necessary. Last Monday, it announced that all International Labour Organisation’s 11 indicators of ‘forced labour” have been resolved and verified.
The group’s founder and executive chairman Tan Sri Dr Lim Wee Chai, who had previously kept a low profile, has been forced to meet the media to improve his personal and company’s image.
“As we are the world’s largest manufacturer of rubber gloves, naturally migrant worker activists such as Andy Hall looking for targets aimed at us. But now he has become our friend – a ‘critical friend’ (a friend who can criticise) – after witnessing tremendous improvements in our treatment of workers, ” Lim says in an exclusive interview with Sunday Star at his office at Top Glove Tower.
Surprisingly, the 63-year old tycoon harbours no ill-feelings against Hall after his “malicious attacks” on Top Glove last year.
“We are learning. We do not want to create enemies. We want to make friends with everybody, say good things and do good things, ” states the devout Buddhist, a student of Master Cheng Yen of Tzu Chi of Taiwan along with his wife.
Hall’s charges last July spurred Top Glove to allocate funds to improve the living conditions of its foreign workers, subsidise their meals and raise their wages. Last month, the group gave out special bonuses to the workers, says Lim.
In fact, this writer was given a guided tour of the workers’ accommodation before the interview. Both link houses and flats in Shah Alam are installed with facilities to provide a safe and decent living place, and to facilitate workers to repatriate money back to their home countries.
This writer was also shown a short and medium plan of Top Glove to improve the living conditions of its migrant workers further.
Besides Hall, Impactt – an independent consultant specialising in ethical trade, human rights and labour practices – has also been won over.
In a January statement, Impactt opined findings show “forced labour indicators were no longer present among the group’s direct operations”.
The attention given to labour issues by Lim was shown in a letter he penned to its 21,000 staff and workers dated April 19: “As Top Glove’s executive chairman, it is my responsibility to put right the wrongs. I have been personally chairing daily meetings to correct shortfalls relating to workers’ welfare for the last nine months.”
Calling employees “the children and asset” of the company, he stated in the letter: “I am confident that we will continue to live up to the highest of standards with compassion and humility.”
While some believe the industrialist’s problems with the US Customs and Border Protection (CBP) could be due to his perceived pro-China stance amid US-China tension, Lim is not so sure.
When Wuhan became the first epicentre of the Covid-19 pandemic in February last year, the group – with business in China – promptly flew three million gloves to Beijing. The gesture of Top Glove and donors from other Malaysian Chinese groups were highlighted in the media.
The serious-looking billionaire, in a two-hour exclusive interview from office to lunch table, candidly takes questions linked to himself and the company. Below are excerpts:
> You have said you want to live until 120. Why 120?
The human body is designed to live for 120 years or more, but we must know how to take good care of it.
The average lifespan of Malaysians is 80. My original target was to live to 100. But because I am a vegetarian leading a healthy lifestyle, I believe I can live up to 120 to serve society longer.
I adopt the “5 Wells”: “clean well, eat well, work well, exercise well and sleep well”. Hence, in the past 20 years, there has been no chance for me to fall sick. Before that, I did catch a cold (laugh).
I enjoy working. I am able to work seven days a week because I love my work. Due to this, work no longer feels like work, but a hobby.
Top Glove has earned billions. As I am able to create billions for the company and thousands of jobs for the country, I hope to live longer to serve society. This year, we are creating over 9,000 jobs.
I control 34% of Top Glove. I cannot afford to die early. I need to live longer to contribute more and give back more to society.
> You are listed as one of the richest men in Malaysia by Forbes. Is the estimate of your personal wealth at US$3.8bil accurate?
I have worked very hard to build my glove business and it is personally satisfying to see our business do well and receive recognition.
Forbes’ estimate was made without the writer coming to meet me.
I believe the estimate was based on my holdings in public listed companies. My cash and private holdings were not taken into account.
(Among others, Lim privately owns a major hotel-under-construction and several properties in Kuala Lumpur).
> Are you going to write a book to talk about your life and your success?
I am already working on my biography with a professional writer. It is expected to be completed within this year.
In my book, I will share about my life thus far, my entrepreneurial journey and philosophies. Knowledge must be shared. We must be generous enough to teach and guide others.
My book will impart valuable knowledge and insight to its readers, in line with Top Glove’s motto “must know, must do, must teach”.
> You have adopted a no-corruption policy in business dealings. Has this brought some “inconvenience” to Top Glove in our society?
Practising good business ethics, upholding honesty, integrity and transparency is the cornerstone of our business and is important for continued success.
I believe integrity is key for long-term business growth and sustainability. Lack of integrity can cause the collapse of a person, a company and even a country.
If you cheat, you may gain in the short term, but not in the long term. Eventually, you will also be found out.
At Top Glove, we take good business ethics very seriously. For more than 10 years now, every single employee has to wear an anti-corruption badge. And everyone doing business with Top Glove is required to sign a declaration they will always be honest and transparent in their dealings with us.
(This writer had to wear an anti-corruption badge before entering Top Glove Tower.)
> What is the latest guidance on Top Glove’s financial results in the current quarter and in this financial year?
We expect good quarters ahead as glove demand remains strong. Demand has been very robust following the emergence of Covid-19 in early 2020. And as mentioned in our outlook released after Q1 results, demand will continue to be strong.
(Global demand for rubber gloves will continue to outstrip supply until 2022, said the Malaysian Rubber Gloves Association on March 15,2021).
> What is next for you? Will you expand your business to include other sectors?
Top Glove is still growing. It is a dynamic company and we are always asking ourselves ‘what’s next?’.
This year, Top Glove celebrates its 30th anniversary. It has had many successes so far, but we have many more milestones to achieve.
We will continue to expand our glove business to meet the rising global glove demand. To grow efficiently, our expansion strategy involves both organic growth and inorganic growth via mergers and acquisitions (M&A), as well as joint ventures.
Our priority will be M&A to complement our existing business and contribute positively to our earnings immediately.
We will continue to expand our product portfolio within the healthcare segment, which include condoms, dental dams, facemasks, household, and personal care products.
We will also continue to grow our land bank for the purpose of building new glove factories.
In business and life, we must set targets. I have set a personal life target of living to 120. Top Glove’s targets include listing on the Hong Kong Exchange by this year and becoming a Fortune Global 500 company by 2030.
It is important to set big goals. Even if you do not achieve them fully, you will get close to your targets by working hard. In the longer term, we aim to get listing in New York
> Is there a succession plan for your business? Are your children in Top Glove?
Succession planning is important for all businesses. The basic guiding principle is simple: the best man runs the show.
We practice meritocracy and ensure hard work, commitment and contribution are rewarded accordingly.
Everyone working in Top Glove has an equal chance in advancing their careers here. There is always room at the top for qualified talents, even for chairmanship.
My daughter is not with the company. My son (35- year-old Lim Jin Feng) has been working for Top Glove for 10-11 years. He climbed from the bottom, not rising up via a helicopter. I did not promote him to be deputy general manager of marketing. His supervisor assessed him.
Many family businesses could not grow because their owners fill top positions with their children with no proven record. Top Glove is different.
> Theoretically, Top Glove can give up the American market, given that global demand is very strong. Can Top Glove afford to do that?
As the world’s largest manufacturer of gloves, we are privileged to supply our life-saving gloves to some 195 countries globally.
There is no reason to give up on the US market as we believe we are well on our way to resolve issues they complain of. (At press time, the US CBP has not lifted the ban on Top Glove’s gloves).
We will continue to upgrade ourselves to be on par with international best practices.
Top Glove aims to be a leading responsible company in Malaysia and worldwide. We are putting a lot of focus on environmental, social and governance (ESG) practices. ESG is the direction forward for our group.
> Last year, you declared Top Glove would overtake Malayan Banking Bhd to be the largest company by market capitalisation on Bursa. But it never did. Any regret for saying this?
After stating that, there was backlash.
But by right, we deserved to be the number one, given that our revenue and profitability had jumped so much, and more than Maybank last year. We also give out high dividends.
However profit-taking, labour issues, activism, market volatility/situation, as well as our factories being hit by Covid-19 virus, contributed to the slide of our share price from its peak.
I have no regret over my statement last year. It’s a fact. Look at our financial results.
However, the consolation is: we were number two last year. In business, we have to accept this: sometimes we win and sometimes we lose.
However for this year, I will not repeat similar statement.
(As of last Wednesday market close, Maybank’s market capitalisation stood at RM94.2bil and Top Glove at RM46.5bil)