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https://klse.i3investor.com/blogs/gloveharicut/blidx.jsp

I am reproducing TOP GLOVE EGM minutes shared in a Telegram group to my blog.

590 Days Nitrile

460 days Latex

100% Utilization

Sept – 20 – 40% depending on types of glove

Deposit: 10 – 20% confirm order

Spot orders: 30%

Vaccine impact to TG:

• Post covid demand growth 15%, pre-covid 8%.
• Increase of usage
• Non-medical segment also using gloves

US CBP withhold status:

• Actively engaging CBP
• Working with consultant
• Remediation fees 53 millions ( 4.4 million disbursed)
• Target to resolve end of Aug 2020
• No impact to company

Expansion plan

• Expanding capacity every year consistently for global demand
• 116b Aug 2022
• Newcomers venture in Glove business (same situation seen in the past pandemic but not able to survive when demand normalize)
• 250 gloves manufacturers 30 years ago, and 40 players left now.
• Invest in glove company instead of manufacturing line

Planning stage

• Tan Sri Lim: Is important and good, to produce nitrile latex for self-consumption. 20,000 tonnes nitrile latex per month, 250 MT a year.
• Allocated 20 acres of land located at banting and submitted local authority to produce synthetic nitrile latex

• Time taken to expand and build machines and factories is totally different now. Machines are sophiscated (take at least 9 – 12 -15 months) to have sizeable production line
• Movement control in travelling, not easy to get contractors and suppliers from Malaysia, there will be some delay
• In China, there are more opportunities, they will move in other business ventures instead of glove.
• Cost advantage: Malaysia is cheaper
• Difficulty in recruiting domestic work in China
• Malaysia will still maintain the edge in terms of costing, technology, raw materials
• Strong supplier (synthomer)

Tan Sri Lim: I also like to explain the shortage of nitrile glove and nitrile latex, cause nitrile latex price to increase. Pre-covid: Nitrile latex (80-90% capacity), Nitrile latex shortage is not critical and supplier is increasing the capacity to 100%. More demand > supply, the nitrile latex price increase 10-30% from Jan to current. Gloves increase 40 to 70%.

Tan Sri Lim: Continuously to look out for other business. Glove is main focus core business. Now also venturing in Face masks (7 mil per month 3 machines).

4^th QR: 17 Sept 2020

Analyst projection – working strongly to achieve, demand continue to be strong. Works toward achieving good QR.

• Deputy finance minister, gov not make any windfall tax.
• Task force to illegal cigarettes.
• Windfall tax is on commodity products and not manufacturing
• Glove exporters paying excess 0.2% FOB tax.

Tan sri Lim: Working very well with CBP and communicating daily, hopefully resolve by end of Aug 2020. Remediation cost (old recruitment fees).