The two factories, known as factory 20 and 21 (F20 and F21) in Klang, Selangor, come at a time when global demand for disposable rubber gloves are expected to rise due to the global outbreak of A(H1N1) influenza.

"We estimate global demand growth will probably be more than 10% in the next two months (due to swine flu). (Top Glove's) long-term strategy is more important than short term," Top Glove chairman Tan Sri Dr Lim Wee-Chai told reporters on the sidelines of Invest Malaysia today.

Construction of F20 is completed and its production lines are expected to be finalised by February 2010. F21 is expected to be ready in July 2010. Top Glove will use its internal funds to finance the capex.

Including the two factories, Top Glove will have 18 glove production facilities across Malaysia, Thailand and China. The world's largest glove-maker also owns two latex plants in Thailand and plans to acquire rubber plantations as a safeguard against fluctuating latex prices.

Global glove demand stands at some 140 billion pieces a year, and Malaysia meets more than 60% of that. Top Glove itself commands a world market share of 22%.

Lim said should the ringgit strengthen to 3.2 against the US dollar, the company would increase the prices of its products.

A weaker ringgit versus the US dollar essentially translates into higher earnings for glove producers when their foreign currency-denominated exports are converted into the ringgit. Costlier latex, which accounts for more than half of glove manufacturers' cost structure, could stifle profit margin.

Changes in global weather is another factor to watch. Anticipation of dry weather in Southeast Asia and Australia between June and August this year, due to the possible onset of El Nino, is expected to curb the output of commodities like palm oil and natural rubber, hence pushing up their prices.

"Like other commodities, rubber also depends a lot on weather conditions," Lim said.

But it is also worth noting that a substantial chunk of global demand for natural rubber comes from tyre manufacturers whose fortunes are linked to the health of the automotive sector. The car manufacturing industry had seen poorer sales in recent months as a weaker global economy curbs consumer demand for big-ticket items like cars and real estate.

Top Glove's financials improved in the third quarter ended May 2009. Net profit rose 61.6% to RM42.17 million from RM26.09 million a year earlier as the company sold more gloves, and improved its cost efficiency. The glove producer also benefited from a weaker ringgit during the quarter.

Revenue grew by an annual pace of 4.4% to RM371.97 million from RM356.14 million.