Malaysia's Top Glove posts 5% drop in Q3 revenue
CK TAN, Nikkei staff writer
KUALA LUMPUR -- Malaysia's Top Glove, the world's biggest rubber glove maker, said Tuesday that its revenue decreased 5% year-on-year to 574 million ringgit ($180 million) for the quarter ended May 31. Lower average selling prices were to blame, but its net profit was up 5% to 42.4 million ringgit. It was assisted by falling raw material prices, as two main components -- natural and synthetic rubber -- declined by 22.2% and 7.6%, respectively.
Malaysian rubber glove makers control 55% of the world market, and Top Glove leads the natural rubber glove market. However, all players have been grappling with higher energy costs since the beginning of the year, as well as competition among themselves.
To mitigate higher production costs, Top Glove has sold its loss-making factory in China and beefed up automation at its manufacturing facilities. It is also increasing production of synthetic or nitrile gloves, which give better profit margin than latex gloves.
"Recently, we are managing to make some leeway in selling more (nitrile) gloves in Japan. We are able to suit the stringent requirements there," said Managing Director KM Lee during a conference call.
Top Glove exports to more than 195 countries worldwide, and more than half of its production goes to North America and Europe. Sales in Asia have gradually stepped up, to 16% for the quarter.