In 2016, Top Glove announced its second listing, this time in Singapore, after already being listed in Malaysia. What were the objectives in doing so?
The main objective of the secondary listing in Singapore was to create and add value for our shareholders and stakeholders. Singapore is a good country for us to associate with, develop our business, and learn from. The financial market in Singapore is also larger than in Malaysia. As a business we want to ensure that we invest where we can get a good yield or return. The time and cost involved in this investment will pay off with a higher return. Even with our Singapore listing, we still only need to have just one annual report, AGM, auditor, language, and announcements for our listings on Bursa Malaysia and the Singapore Exchange; therefore, we do not have many extra costs associated. The image and brand we are building by listing in Singapore is positive. We want our customers to see us as an international company. The image created is stronger as the regulatory standards are higher in Singapore than in Malaysia. Listing in Singapore is also a sensible long-term strategy for us should we decide to acquire other companies as the new listing opens up the market for us. There is a greater demand for shares on the Singapore market as well. Therefore, our share price and value should be better.
Top Glove currently has 25% of the world market and you have targeted capturing 30% by 2020. What growth strategies do you have in place?
We are the world's largest rubber glove manufacturer and currently export to 200 countries. It is not easy to be the world's largest producer of any product and maintaining that position is even more challenging. In business, you have to set a direction and target. Our target is to expand our market share to 30% by 2020. To achieve this target, we have to continue to expand. To this end, we have been building two or three new factories a year, but that has not been enough. Therefore, we also look to acquire new companies in order to grow faster. The cost of doing business is increasing every year and we need to grow as a company to keep up.
Are there any particular geographical areas that you want to expand to next?
We look to expand all over the world into numerous countries. The US is the country that contributes the highest percentage of our sales revenue at 28%. We are present in all countries in Europe and that represents 34% of our sales revenue. We have customers in Latin America, including Brazil, which is a major market for us. After the US, Europe, and Japan, Brazil is our fourth largest market. We are able to expand to almost every region around the globe because standards of living and life expectancy are going up.
How is your innovation agenda part of your growth strategy?
Innovation is a must. Without research and innovation, there is no quality or future. We need to continuously improve our products to stay ahead of the competition. Other countries, such as Thailand, India, China, Indonesia, and Vietnam, are also producing rubber gloves. We set up a new R&D center three years ago, where we employ 100 researchers to engage in research on a full-time basis in order to improve our quality.
How is the ecosystem in Malaysia for glove manufacturers, given the country's numerous rubber plantations and the government's drive to develop the medical equipment industry?
Malaysia is ideal for rubber glove manufacturing because we have the raw materials, good technology, and machinery for production. We also have high-quality control in our manufacturing. Malaysia has sound infrastructure in terms of transportation, including seaports and airports, and in communications. The country has a relatively stable government, and it is a safe country to operate in. This stability is important for business. Malaysia is good for global marketing, because we speak many languages here, including English, which is essential for international business. Our staff speaks many languages, which enables us to serve customers across the globe. The level of entrepreneurship in Malaysia is high and the country has a good banking system. Hence, Malaysia has many advantages that help make us competitive.
Can you tell us about your recent product innovations?
We continuously search for new and innovative products and we recently introduced a new type of synthetic glove for people who are allergic to natural rubber, or latex. Also, we have introduced a polymer coating that enables you to don a glove even with wet hands. Every year we introduce about five new or improved glove products. We have also expanded our glove range to serve the food industry. We manufacture color-coded gloves for use in different types of food preparation. We have also expanded into gloves for use in hairdressing salons and households. We are always looking to innovate and expand into whatever colors and features consumers want.
What are the key challenges ahead for your business?
The quality requirements for our gloves differ greatly from country to country in terms of regulations, labeling, and so forth. This can make it more difficult to export to some countries. For example, for Brazil we are required to print certain numbers on our products. Of course, the more requirements there are, the higher the cost to us and to the consumer. The US' FDA is also strict in its quality requirements. Basically, we have to have numerous certifications to meet all the different countries' standards.
What are your ambitions for the next two or three years?
We think five, 10, or 20 years ahead. We have to grow more and grow faster, or make acquisitions to keep up with the escalating costs of doing business. To do this, we need the right people and recruiting the right talent is extremely important. I founded the company 25 years ago and I am still happy to come to work and always on the move—work is my hobby. I never stop learning and improving. I keep fit and we encourage our staff to stay healthy and fit too. We have a gym, which staff may use for free and organize sporting activities every month for our staff. We have established a policy that as long as you are healthy and are making a positive contribution there is no fixed retirement age; you can keep working if you want to. We manage the company on a democratic basis. Anyone can be the head of the company if they are good enough to do the job. The opportunities are open for the best people to run the show. This is the message and philosophy we want to pass down.