KUALA LUMPUR, March 26 -- Top Glove Corporation Bhd expects its profit margin to increase by between 20 per cent and 40 per cent in the second half of 2020, following the higher demand for rubber gloves amidst the COVID-19 pandemic.
Executive chairman Tan Sri Dr Lim Wee Chai said the company is confident of meeting the demand for rubber gloves, especially following the completion of its two factories—factory 5A in Ipoh and factory 2B in Meru, Klang.
“With the ongoing expansion, we will be able to supply additional rubber gloves, bringing our total production capacity to 91.1 billion pieces by end-2021 from 81.6 billion expected by end-2020,” he told reporters via a conference call today after announcing the group’s second quarter (Q2 2020) results.
Currently, the company's production is at 73.4 billion pieces.
The company's net profit jumped 9.3 per cent year-on-year (y-o-y) to RM115.68 million in Q2 ended Feb 28, 2020 from RM105.79 million in Q2 2019.
Sales revenue for the quarter rose to RM1.23 billion -- six per cent higher y-o-y -- with orders coming mainly from China, Hong Kong, Singapore and South Korea.
Meanwhile, Lim said the movement control order (MCO) announced by the government had not affected the company as it could still operate at almost 100 per cent capacity.
However, he said that the company did face some difficulties in the previous week which disrupted the supply chain.
“Through our discussion with the Ministry of International Trade and Industry (MITI), we managed to resume work especially at the production department, whereby half of the employees are working at the office in two groups (alternate days at home and at the office),” he said.
Managing director Datuk Lee K M said although sales had surged during this period, the company is dismayed that COVID-19 continues to cause great upheavals and suffering on a global scale.
“We will continue to work safely and perform our duties to produce life-saving medical gloves for the frontline healthcare workers and the many others who need it.
“We stand in solidarity with all who are helping to combat this pandemic in one way or another, and share the common hope that it will come to an end soon,” he said.
Top Glove has committed to donate 2.5 million pieces of medical gloves to various parties, such as the Ministry of Health, Royal Malaysia Police, Malaysian Rubber Glove Manufacturers Association and many other non-governmental organisations and charity organisations, as well as RM500,000 in cash to the Health Ministry to aid in the fight against COVID-19.
Yesterday, the Malaysian Rubber Glove Manufacturers Association said that it is seeking the government’s approval to allow its members to operate at 100 per cent capacity to meet urgent local and global demand in the fight against COVID-19.
According to its president, Denis Low, if the matter is not addressed urgently, it might lead to a chronic shortage of medical gloves.
Malaysia is expected to deliver about 225 billion pieces this year, which is about 65 per cent of the total global requirement of about 330 billion pieces.
At lunch break, Top Glove shares slipped 0.32 per cent to RM6.18.
Malaysia National News Agency
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