Top Glove aims to join Fortune 500 by 2040
World's largest rubber glove maker sees growth in health care and food industry
JUSTINA LEE, Nikkei staff writer
SINGAPORE -- Top Glove, the world's largest rubber glove maker by capacity, aims to become a Fortune 500 company by 2040 by pursuing a bigger share of the international glove market.
As part of its merger and acquisition plans, the company recently acquired Malaysian medical glove maker Aspion for 1.37 billion ringgit (about $350 million) in cash and shares. It is also making plans to enter the Vietnamese market that should be finalized this year.
The Nikkei Asian Review spoke to founder and Executive Chairman Lim Wee Chai about the company's business strategy and growth plans.
Q: What challenges do Malaysian glove companies face in competing globally?
A: Glove demand is growing every year, with higher standards of living, and standards of hygiene increasing in hospitals, clinics and the food industry. Malaysia captures about 60% of the world's market.
Business nowadays is very competitive, especially in the international market, where it is like the Olympic Games. It's survival of the fittest. For example in Malaysia, we have had 250 glove companies for the past 20-30 years. But now, 80% have closed because they couldn't compete. Only 20% could compete and survive. To compete, we need good quality products at low-cost production.
Q: You mentioned that Top Glove aims to grow its market share to 30% in 2020 from 25% currently. How do you intend to achieve this?
A: At the moment, we have 25% of the rubber glove business in the world. We have factories mainly in Malaysia, Thailand and China. We have marketing offices in the U.S. and Germany.
Short and medium term, we want to capture 30% of the glove market. Longer term, by 2040, in another 22 years, we plan to be a global Fortune 500 company. So this is our bigger goal. In order to achieve that, we need to grow 40 times to achieve revenue of $40 billion. In the past 16 years, we have grown 40 times. So for the next 22 years, we hope we can grow another 40 times.
We need to have a long term plan and strategy. We need to acquire and build our own factories through organic methods and M&As to grow.
We also need to use technology and digitization, such as computerizing the manufacturing process for the whole company, automating our production and manufacturing facilities.
Q: Other than Malaysia, what countries is Top Glove looking to invest in?
A: We are interested in Thai companies. We want to grow at a faster pace, so we have to open our doors to M&As and joint ventures. If the business is good and has a good future, why not? If there is any health business that can contribute to shareholders, stakeholders, to society, we will invest.
The next manufacturing base we would like to invest in is Vietnam, and of course we will continue to expand in Malaysia and Thailand. Vietnam's cost of operations and labor is cheaper. Customers want better quality at lower costs and lower prices. We must use technology, the right people, the right place and country. That is very important.
Q: How important is automation and the use of new technologies to your glove production?
A: Manufacturing products like gloves at good quality at a lower cost is important. That is what the customer wants. But to achieve this, we need technology, research and innovation. Then the business can grow. We must do what the customer wants.
In our glove manufacturing business 20 to 30 years ago, one production line produced about 5,000 gloves per hour. Now it can produce more than 30,000 gloves an hour -- six times faster. Without technological improvements, we cannot improve so much.
We need to change and transform from traditional methods of doing business to make a better quality product. Then we can compete in the international market.
Lim Wee Chai is honorary president of the Associated Chinese Chambers of Commerce and Industry of Malaysia. He earned a bachelor's in physics from the University of Malaya and an MBA from Sul Ross State University, Texas.