Lim Cheong Guan, Executive Director of Top Glove Corp, comments on the world's biggest rubber-glove maker's expansion plans, higher latex costs and earnings outlook.

Lim was responding to questions from Bloomberg by e-mail.

On capacity expansion:

'Our expansion plan involves the construction of three new factories in Malaysia as well as putting up 88 additional production lines in our existing plants in Malaysia and Thailand. This will raise our annual production capacity by 25 percent to 41.25 billion pieces of gloves by May 2011, from a total of 20 factories with 459 lines.'

On higher latex costs:

'Our customers are aware of the cyclical nature of rubber prices. Due to our established business relationship with them, we are able to pass on the majority of the rising cost of raw materials to our customers. Similarly, when latex prices go down, customers will enjoy lower glove prices.

'There is a time lag of about two months in passing on the higher or lower costs of raw materials to our customers. Nevertheless, the ability to pass on higher costs hinges mainly on demand.

'When demand for gloves is strong, we can pass close to 90 percent of the higher cost to our customers whereas in the current situation where demand is normalizing, we can only pass on about 70 per cent to 80 per cent of the higher cost as customers expect us to share the burden.' - Bloomberg