KUALA LUMPUR (May 9): The world's largest glovemaker Top Glove Corp Bhd said it will "make adjustments" to its capacity and workforce as needed.

The group's comment was in response to The Edge's query after its peer Hartalega Holdings Bhd announced that it was decommissioning its Bestari Jaya production facility by year end, in light of a challenging oversupply of gloves on the market.

“We continue to review our operations to ensure that we remain competitive and efficient.

"As part of our ongoing improvement efforts, we may make adjustments to our production capacity and workforce as necessary.

Nevertheless, any decisions will be made with the utmost consideration for the welfare of our employees and long term sustainability of the business," a spokesperson for Top Glove said.

According to a PublicInvest Research note on April 20, Top Glove was operating at a utilisation rate of 30%

"In order to break even, it would need to raise ASP further by about 10%, in addition to running at a utilisation rate of at least 60," wrote its analyst Thye May Ting.

For the second quarter ended Feb 28, 2023 (2QFY2023), the glovemaker reported a third consecutive net loss, of RM164.67 million or 2.06 sen per share for 2QFY2023, compared to a net profit of RM87.55 million or 1.09 sen a year ago.

Its continued losses were due to an existing surplus of gloves and moderation of average selling prices, which were worsened by rising production costs.

Meanwhile, revenue fell by more than half to RM618 million from RM1.48 billion.

At the noon break, Top Glove slipped half a sen or 0.53% to 94 sen, for a market capitalisation of RM7.72 billion.