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Nikkei Markets

UPDATE: Malaysia Top Glove Aims 2 More Acquisitions This FY After Aspion Purchase

By Jason Ng and Gho Chee Yuan
Nikkei Markets
adds more comments from company officials, recasts lead, adds closing share level
KUALA LUMPUR (Jan 12) -- Malaysia's Top Glove Corporation, the world's largest rubber glove company by capacity, may buy another two companies this fiscal year following a planned acquisition of a medical glove maker, its chairman said Friday.

The upcoming acquisitions will be "smaller" in value than Aspion that the company agreed to purchase for 1.37 billion ringgit ($345.09 million) in cash and shares, Lim Wee Chai said at an earnings briefing. Potential targets are in the rubber and plastic sectors, he said.

"We are always talking and looking for merger and acquisition," said Lim. "This year, we plan to have three acquisitions and we (already) have a big one."

Top Glove's aggressive expansion comes at a time of surging profits and resilient demand for its products used in households and industries ranging from medical to food. In addition to acquisitions, Top Glove is also building new factories in an ambitious bid to capture 30% global market share.

Apart from the Aspion acquisition, the company announced in October the acquisition of Eastern Press, a packaging material firm, to improve its supply chain. By December 2018, Top Glove aims to operate 31 factories manufacturing up to 59.7 billion pieces of gloves a year.

Top Glove is also planning to build a factory in Vietnam that could cost the company about 50 million ringgit, Executive Director Lim Cheong Guan said at the same briefing. The plant is expected to be completed within two years and produce up to three billion pieces of gloves a year, he said.

"We are now looking for land in Vietnam to build a factory," he said. "The plant will be producing PVC gloves."

For its last fiscal quarter ended Nov. 30, net profit climbed 44% to 105.45 million ringgit ($25.88 million) when compared with the same period last year, Top Glove said. Quarterly revenue meanwhile increased 19% year-on-year to 938.12 million ringgit.

Shares of Top Glove closed 3.5% higher at 9.00 ringgit apiece, while the benchmark FTSE Bursa Malaysia KLCI ended 0.3% higher.
- By Jason Ng and Gho Chee Yuan;; +60320267363
- Edited by Abhrajit Gangopadhyay
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- Copyright (c) 2018 Nikkei NewsRise Asia Pte Ltd.

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