Top Glove sees strong growth ahead, Covid-19 sparks global demand surge

Staff work at the Top Glove factory research and development lab in Shah Alam on the outskirts of Kuala Lumpur on August 26, 2020.

MOHD RASFAN | AFP via Getty Images

SINGAPORE — Malaysia’s Top Glove, the world’s largest medical glove maker, sees “very strong” growth ahead, according to the company’s managing director, Lee Kim Meow.

“We’re very optimistic of our future,” Lee told CNBC’s “Street Signs Asia” on Friday.

His comments came after Top Glove on Thursday reported that its fiscal 2020 post-tax profit spiked 417% from last year. The company said the “tremendous growth stemmed from a global surge in demand for gloves on the back of the COVID-19 pandemic.”

“2020 if you look at it, the effect only (kicked) in around the middle of this year,” said Lee.

Looking ahead, he said the company expects at least 20% to 30% additional growth for next year and at least 15% to 20% for 2022.

The Covid-19 pandemic has pushed gloves and face masks to the forefront.

Lee Kim Meow

Managing Director, Top Glove

Lee said the coronavirus pandemic has had a “rather profound” impact on glove manufacturers.

“The Covid-19 pandemic has pushed gloves and face masks to the forefront,” he said.

When asked about demand and possible effects of stockpiling, Lee said goods are sold out for their distributors and customers “even before the container has arrived in their warehouse.”

“It’s not a case like they’re buying the gloves to stockpile, to get ready, and to keep two or three months stock,” Lee said. “In our conversations with many of our customers, they have told us that they have no stock at all at their warehouse and they’re still trying very desperately to get their hands on as many gloves as possible.”

Hong Kong listing?

Shares of Top Glove listed in Singapore and Malaysia have seen multi-fold gains so far in 2020, boosted by the record demand for medical gloves.

Top Glove is also planning a third listing in Hong Kong within six to nine months, according to Reuters. The company’s managing director told CNBC a third listing would be a “very natural progression.”

“We want to create a bigger platform whereby our investors will have more opportunities to invest in the Top Glove group and at the same time also it has to do with corporate image,” Lee said.

“Essentially, we look at it as the possibility to raise funds to look at the strategic M&As and even the purchase of companies that play a very synergistic part in our bigger picture to grow from a glove manufacturer and to move into other strategic business,” he said.

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