An employee monitors latex gloves on hand-shaped molds moving along an automated production line at a Top Glove Corp. factory in Setia Alam, Selangor, Malaysia. - Bloomberg AMIDST the heady excitement over their stock prices, glove companies are charting expansion plans in the belief that globally, the industry has long-term growth potential. One such company is Top Glove which has been hogging the limelight as average selling prices (ASPs) of gloves keep surging. While revisions in ASPs are made in line with market prices, its long-term plan is to expand the number of factories every year; it has a target to reach 500 factories to achieve Fortune Global 500 status by 2040. With its investments in technology and artificial intelligence (AI), of about RM100mil per year, it may get there with less number of factories. The retention of its gloves by the US Customs is seen as a temporary setback, and will not change its expansion plans. With 2,000 customers across 195 countries, sales to the United States account for 24% of its glove sales as at the nine months of financial year (FY) 2020. Overall, it aims to increase its market share for gloves worldwide from 26% to 30% by year end. While still keen on acquisitions with good valuations; it will review future cases with greater caution, following its purchase of Aspion at a high price, for which it later claimed back some money. Against its debt of RM2.3bil, it has a net cash position of RM284mil arising from strong profits delivered in the third quarter. Following a rise in monthly sales orders by about 180%, the lead time for delivery has increased from 40 to at least 400 days till around September 2021. Top Glove is also venturing into new products such as condoms, dental dams, exercise bands and recently, face masks, household products and plastic aprons. If an effective vaccine against the coronavirus is found, urgent buying of gloves will likely reduce. But pre-Covid 19, global demand for gloves was already growing between 8% and 10%, driven by strong fundamentals and across geographies.,
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