KUALA LUMPUR (Oct 1): Top Glove Corp Bhd has cut its selling prices three times in the past three months to pass the cost saving to its customers, according to its chairman Tan Sri Lim Wee Chai.  

Speaking to the media at the official opening ceremony of Top Glove Tower, Lim said that the company has benefitted from the strong US dollar and lower raw material costs. The savings were passed down to customers in the form of 3% to 5% discount on selling prices.

When asked about the outlook for commodity prices such as natural rubber, Lim said that currently the latex concentration is traded between RM4 and RM5 per kilogram, which he believed is reasonable.

He opined that the current price can sustain for the next two to three years.

Lim noted the latex concentration was previously traded at a high of RM11 per kilogram.

Despite the group being in a better position helped by stronger US dollar and lower raw material prices, the group had revised its price three times in the past three months to pass back savings to customers.

Although Top Glove gained from stronger US dollar, Lim commented that the devaluation of the ringgit is not good as a whole for the country.

"To us, we are better off because we earn in US dollar, but we are among the 5% of companies that are benefitting from this, the rest 95% are affected," Lim said.

While focusing on its core glove business, Lim said the Top Glove Tower that officially opened today is the group's diversification into the property sector.

Lim said the 23-storey tower, with 640,000 square feet gross build-up area, has net lettable area of 300,000 sq ft, including office area (250,000 sq ft) and retail area (50,000 sq ft).

Currently, 40% of the total lettable area has been taken up, another 40% is currently in the process of renting out, while the remaining 20% is available for leasing, he added.

However, Lim did not expect the property segment to contribute much to the group's earnings now. He said the group expects better contribution from the tower in another two years.

He said the group currently has enough land bank for factory construction.

"We still have another 200 acres of land. We have good land banks to build more factories," Lim added.

Currently, the group has 27 factories, close to 500 production lines to manufacture five billion pieces of gloves per year. This includes a new factory in Klang, targeted to be completed by Dec 2016, to add another 28 lines to the group.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)