KUALA LUMPUR (Dec 17): Top Glove Corp Bhd (KL:TOPGLOV) said on Wednesday it plans to recommence operations at its four previously idle glove factories, as recovering demand helped sustain profits for its fifth consecutive quarter.
The world’s largest natural rubber glove maker by capacity said the reactivation will add about six billion pieces to its annual production capacity.
Executive chairman Tan Sri Dr Lim Wee Chai said demand has strengthened meaningfully as customers work through excess inventories accumulated during the Covid-19 pandemic.
The additional capacity can be absorbed by the market amid the exiting of weaker players, he said.
“During 2021, customers stocked up heavily on gloves. Over time, these inventories have either been used up or expired ... now, about five years after the pandemic peak, customers are replenishing stocks, and we can clearly see demand increasing,” he said during a virtual results briefing.
Top Glove currently operates 51 factories globally, comprising 45 in Malaysia, five in Thailand and one in Vietnam, alongside supporting facilities such as latex concentrate plants, chemical factories, a gamma sterilisation facility and packaging material plants.
The group is eyeing pre-pandemic performance by 2027, assuming no major external shocks, as higher utilisation of existing assets improves margins and profitability.
For the three months ended Nov 30, 2025 (1QFY2026), Top Glove posted a net profit of RM38.58 million, up sharply from RM5.47 million a year earlier, according to a Bursa Malaysia filing. Quarterly revenue, meanwhile edged slightly lower to RM883.58 million from RM885.89 million previously, mainly due to lower average selling prices (ASPs).
No dividend was declared for the quarter.
The group said its slightly lower revenue was affected by declining ASPs in line with lower raw material costs, as well as the impact of a stronger ringgit against the US dollar. However, higher plant utilisation lifted cost efficiency and improved economies of scale.
Production costs have been reduced by about 20% over the past two years, Top Glove said, narrowing its cost gap with Chinese glove manufacturers and enabling it to compete on pricing strategy while maintaining profit margins.
Cost savings were achieved across multiple areas, including labour, chemicals, energy, electricity, water, packaging materials and operational efficiency, according to Lim.
“We reduced costs in all areas. Two to three years ago, our glove prices were about 20% higher than China players. Today, our selling prices are about the same, because we have significantly lowered our cost base,” Lim said, adding that there remains room for a further 5% improvement over the next quarters.
Regionally, Top Glove reported a strong growth in the US market, with sales volume surging about 117% year-on-year, supported by demand recovery and tighter industry supply.
Its weekly order book has risen to about 1.4 billion pieces, compared with roughly one billion pieces several months ago, while delivery lead times have lengthened to 60 days from 30 days previously.
Currently, the group is operating at about 70-80% utilisation across its active factories, with a running capacity of about 65 billion pieces against an installed capacity of 95 billion pieces.
Top Glove said its reactivation exercise will require capital expenditure of RM20 million, or approximately RM5 million per factory, mainly to refurbish production lines and reinstall previously mothballed equipment.
The management is targeting to raise running capacity to around 70 billion pieces by the financial year end with more lines being brought back online.