Top Glove expects to maintain average profit margin of 10%

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KUALA LUMPUR (March 20): Top Glove Corp Bhd is confident of maintaining an average profit margin of 10%, backed by global growth in the gloves market and an increase in the group's capacity.

The group also expects to maintain its compounded annual growth rate of some 20% for revenue annually, especially on the back of an expected 33% growth in capacity for its gloves over the next two years, said Top Glove founder and executive chairman Tan Sri Lim Wee Chai.

"The industry is growing at about 10% a year, and (in) the next 10 years (it) also will grow at about the same rate," he told reporters at the Invest Malaysia 2019 forum today.

He added that new demand is coming from all over the world, as the increases in life expectancy, standard of living and standard of hygiene will boost demand in the medical, and food and beverage industries.

On the subject of latex prices, Lim said a price of between RM4.80 and RM5 is "reasonable".

"We hope the raw material price (remains) in the medium range. It cannot be too low, like below RM4 last year. It is not sustainable," he said.

Separately, Lim said the group intends to secure the certification for its condom factory and production by next month, which will enable the group to begin commercial sales immediately after.

The group began production for its own condom range in July 2018.

At 2.38pm, Top Glove was up 0.44% or 2 sen to RM4.52 with 2.3 million shares traded.