Impact Of West Asia Conflict Manageable Despite Supply Chain Pressures - Top Glove

KUALA LUMPUR, March 18 (Bernama) -- The conflict in West Asia is affecting the glove sector but the overall impact on operations remains manageable, said Top Glove Corporation Bhd executive chairman Tan Sri Lim Wee Chai.

He said the group’s direct sales exposure to the affected region is relatively small, accounting for about four per cent of total sales, with shipment disruptions estimated at only one to two per cent.

However, the conflict has created broader ripple effects across the supply chain, with some customers reporting lower inventory levels in recent weeks, partly due to precautionary or panic buying.

“There has been some increase in demand overall. There is also an impact on nitrile raw materials and prices. Nitrile latex prices have risen significantly, largely due to supply and demand factors.

“Demand has remained relatively stable, but supply is constrained. For now, the shortage is estimated to affect about 30 per cent,” said Lim during a virtual media briefing on the company’s financial results for the second quarter ended Feb 28, 2026 (2Q FY2026) today.

While prices were largely maintained in the first three weeks of March, Lim said incremental increases were introduced in the final week, with further hikes expected in April and May to reflect rising input costs.

Despite the challenges, he said the current environment also presents opportunities for well-managed manufacturers to strengthen their market position, emphasising the importance of coordination across the supply chain during periods of disruption.

Top Glove announced in a Bursa Malaysia filing today that its net profit rose to RM30.76 million in the second quarter of FY2026 from RM30.28 million in the same quarter last year, while revenue increased 14 per cent to RM1.0 billion from RM883.65 million, driven by stronger sales orders across most regions.

Touching on the group’s strong quarter-on-quarter (q-o-q) growth, marketing director Lim Jin Feng said maintaining current sales volume would support a solid performance for the financial year.

“We expect to maintain our third quarter volume to be similar to our second quarter,” he said.

Meanwhile, managing director Lim Cheong Guan said the raw material, natural rubber supply, remains stable as it is sourced from Thailand, although prices may fluctuate in line with broader commodity trends.

He said that while overall demand is expected to remain stable, the shortage of nitrile raw materials could reduce nitrile glove supply, prompting some customers to switch to natural rubber gloves.

Lim added that capacity expansion in Malaysia has been constrained by power supply issues, which have slowed the growth of glove production.

He said that the world’s largest glove maker’s ability to switch production lines between nitrile and natural rubber gloves offers a competitive advantage in managing the volatility of raw material supply.

“Array selling prices are expected to adjust in line with the anticipated raw material cost increases and the weaker US dollar. 

“The group continues to closely monitor raw material prices and geopolitical development to ensure competitive and effective pricing to customers, while maintaining a disciplined hedging policy to mitigate the impact of currency fluctuations and support stability and financial performance,” he added.

-- BERNAMA