Top Glove reaches for SGX listing

Top Glove reaches for SGX listing

The world's largest rubber glove maker is trying its hand here with plans for a secondary listing on the Singapore Exchange.

Malaysia-listed Top Glove Corp has put in its application, and is expected to issue $20 million of existing shares on the SGX by late June. The listing could give a boost to the bourse, which has been hit by a dearth of initial public offerings.

Mr Lim Cheong Guan, Top Glove executive director, said the company had been approached by SGX for the past five years.

It is taking the plunge now that it "has grown much bigger", he said.

Top Glove, which supplies 25 per cent of the world market for rubber gloves, makes 44.6 billion gloves annually. Last year, it posted record sales of RM2.51 billion (S$881 million).

Mr Lim said the company decided to list in Singapore because of market familiarity and SGX's proactive approach.

The efficiency of the transfer of shares from Malaysia to Singapore was also a key factor.

"If they transfer the shares from Malaysia to Singapore, transaction time is T+1. But between Hong Kong and Malaysia, the transaction time is still between three and five days," he said.

Mr Lim said that the reasons for the listing, which will not raise new capital, were to lift the firm's profile and to improve shareholders' value.

"We wanted to create a profile, and access a different group of investors. We also wanted to enhance our shareholders' value as they can have the flexibility of trading in both countries," Mr Lim said.

With its listing here, the firm is also looking into acquiring manufacturers of medical-related products as "the customer base is the same".

Top Glove is bullish about its growth outlook, as global demand for rubber gloves is growing at between 6 per cent and 8 per cent a year.

Mr Lim said the company sees huge potential for growth in regions outside developed countries like the United States and Europe, which use almost 70 per cent of the world's gloves despite making up just 13 per cent of the population.

Some emerging countries have also not yet regulated glove use for medical professionals, which he believes will come in the future.

To meet growing demand, Top Glove will build three more factories in Malaysia and Thailand, bringing the company's capacity to 52 billion gloves by early 2017.

The company's profitability also increased by 122 per cent year on year from the first half of 2015 to 2016, said Mr Lim, citing its move towards automation and vertical integration in the past year.

Mr Lim said that the company's main challenge was its difficulty in hiring engineers, as Malaysia faces a brain drain.

"Our future growth depends on people. Sad to say, Malaysia has lost a lot of talent to Singapore. That is where more effort has to be done by both the company and Malaysia," he said.

But he remained confident about the company's prospects.

"We started as the same time as the players in the market. We were small then, but we already called ourselves Top Glove. We have lived up to it - our next biggest competitors are half our size," he said.


This article was first published on April 15, 2016.
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