How is Top Glove moving toward adopting Industry 4.0?
In the past two years, we have improved significantly. Our sales revenue increased by more than 20% and our profit by almost 30%. The main driving force behind this was the manufacturing improvements we implemented through digitalization. We have invested in automation, computerization, and the IoT, which resulted in higher quality while saving on the cost of more than 1,000 workers per year. We expanded our R&D department from 20, when the department first started in 2015, to 160 staff in January 2019, recruiting engineers, chemists, and scientists. We employ 19 PhD graduates and more than 20 with masters. Innovation and the adoption of Industry 4.0 have been extremely important to us. We have increased our capacity through organic growth by adding new factories and acquisition. To reach 30% of the global market by 2020, we need to continue to grow both organically and through M&A or joint ventures. In the new factories, we use new machinery that will incorporate more digital aspects such as automated packing machines, automated warehouse management systems, and temperature sensors that control the content of the chemicals. We have real-time insight on the speed and production of the machinery, and we use cameras to detect glove defects faster than a human eye. We aim to build around two new factories each year with new machinery of higher quality and cost efficiency.
In addition to glove manufacturers, what businesses could offer interesting M&A opportunities for Top Glove?
Recently, we acquired our supplier of inner box packaging material and a company that supplies and markets dental dams and exercise bands. We also invested in a chemical dispersion plant and a factory to produce molds for glove dipping. In addition, we invested in a condom plant, as that market is growing. Other products related to gloves, healthcare, or rubber production are also on our radar. We are always on the lookout for interesting businesses, though our main focus will remain rubber gloves.
What are some of the most prominent recent innovations you have commercialized?
R&D is extremely important. We need to innovate through R&D to give customers new and better products. Research creates tremendous value, and without it a company has no future. What was good yesterday will be outdated tomorrow, and we need to look for areas to improve every day and do this together. Our target is to commercialize six new products a year. One of our recent innovations has been wet donning, which enables users to put on gloves easily, even if their hands are wet. We have also developed a new biogreen biodegradable Nitrile glove that biodegrades when it comes into contact with the soil. This comes in addition to another glove made from synthetic rubber we recently introduced that is extremely flexible and resilient. Each year, we continue to develop new and unique products for adults and children. One of these is the HydraPlus Moisturizing Nitrile glove, which protects skin while improving hydration.
What is your forecast for the glove market in 2019?
The market for Nitrile gloves could grow by 10-15% per year, with demand mainly from the US, Europe, Japan, Singapore, South Korea, and Taiwan. We also see high demand for natural rubber gloves from Latin America, Africa, China, and India.