Top Glove plans to make condoms

SHAH ALAM: Top Glove Corp Bhd, the world’s largest rubber glove manufacturer, is looking to diversify into condom manufacturing with an initial capital injection of RM30 million by next year.
Executive chairman Tan Sri Dr Lim Wee Chai said production is slated to start within a year and it targets to produce one billion pieces a year to cater to international market.
The initial investment is to establish a factory in Klang, Selangor, with about 20 production lines, he said.
“We need to diversify into other latex-related products and condoms are similar to rubber gloves and many of our customers also buy gloves and condoms,” he told reporters after announcing the company’s third-quarter results for financial year 2017 (FY17).
In order to continue and expand the business, Lim said, the company needs to diversify. “Glove production is still our main product which we will continue to expand with the establishment of one or two factories every year.”
Lim said Top Glove has the confidence and the capability although the initial investment is not that big.
On capital expenditure (capex), Lim said RM50 million to RM100 million more might be spent, making total capex of between RM350 million and RM400 million for FY17.
Lim said the RM30 million capital injection is part of the RM300 million capex that has been used in the first nine months.
“It is for building the factory and machinery but does not include land acquisition,” he added.
On the potential of facing strong competition with leading condom manufacturer, Karex Bhd, Lim said business is expanding and industry players should handle it positively and build healthy competition, as for the glove competitors.
“The market is already there, technology for gloves and condoms are almost the same and so are the suppliers,” said Lim, adding that its new product would be marketed in Top Glove’s existing market in 195 countries with some 3,000 clients.
“The condom manufacturing segment is estimated to contribute some 5% to the group’s revenue for FY18. – Bernama