The company is expanding its production capacity and market base to generate more income, it said. Among its plans are a new latex plant in Hat Yai, in southern Thailand.

Top Glove is targeting a net profit of 81 million ringgit (Bt840 million) from a revenue of 900 million ringgit.

It is seeking an earnings per share of 43 sen for its financial year ending on August 31, despite having to face numerous challenges.

For its second quarter that ended February 28, Top Glove recorded a net profit of 20 million ringgit from a revenue of 229 million ringgit, showing growth rates of 43 per cent and 54 per cent, respectively against the same quarter in the previous year.

For the financial year ending last August 31, the company's earnings per share was 31 sen.

Executive chairman and CEO, Dr Lim Wee-Chai said the company was anticipating strong double-digit profit growth yearly in the next three to five years and could cope with the challenges by being "well prepared".

"In line with the increase in the latex price, we have taken the necessary steps to increase the selling price of our gloves," executive director KM Lee said at a press briefing yesterday.

"Last year, we increased the price three times. This year, we are expecting to increase it about four times," he said. Asked if customers were affected by the price increase, Lee said: "Not really, they seem to order more."

He said the prices were still very affordable and if customers found latex gloves too expensive, they could opt for the company's vinyl gloves, which were cheaper.

He said the price of latex seemed to have stabilised during the past two weeks.

Elaborating on the company's expansion plans, Lee said Top Glove was looking to set up a 40-million-ringgit latex plant in Hat Yai, targeted to be completed by October.

"This plant will be used to process raw latex acquired from third-party plantations. The processed latex would then be distributed to our factories," he said.

"This is the company's first upstream activity," he added.

Lee also said the company expected to start producing polyethylene aprons within the next two months.

Top Glove currently has 12 factories, of which nine are in Malaysia, one in China and two in Thailand.

On glove production, Lee said the company plans to produce 22 billion pieces this year and 30 billion in the next financial year.

He said Top Glove had a global market share of 18 per cent and it was aiming to obtain a 25-per-cent share by the end of 2007.

According to Lee, China and India form major markets for the company over the next five years.

"Both these countries are about 10-15 years behind the US in terms of glove consumption. As their economies prosper, the importance of safeguarding hygiene would also increase, leading to higher demand for gloves," he said.

The Star

Asia News Network

KUALA LUMPUR