(Bloomberg) – Malaysia has long been a place where large rows have accumulated over time. The Kuoks, Tehs and Queks are supervisors of palm oil, possessions and banking empires dating back decades.
That was until Covid-19, when the country’s low-key rubber industry – or rather, glove-making – became one of the toughest on the planet.
Wong Teek Son, who owns Riverstone Holdings Ltd. co-founded in the 1980s after working as a research chemist, last month became the fifth billionaire in the country to make gloves. It is now worth $ 1.2 billion, as shares of its company increased almost sixfold from a low in March, thanks to the growing demand for protective products during the coronavirus pandemic.
A Riverstone spokesman declined to comment on Wong’s net worth.
The speed and strength of the glove boom has been extraordinary, but there are signs that the rapid rise could reverse, especially as research into a Covid-19 treatment and advances in vaccines.
Handcuffs were hammered last week when the president of Russia said his nation had wiped out the first Covid-19 vaccine in the world for use, while Moderna Inc. and Johnson & Johnson are among those dealing with governments to provide their photos. Riverstone fell 13% in its worst week since March and slipped another 2.2% Monday through 9:25 a.m. in Singapore.
Even though a vaccine may not lead to lower demand for gloves, investors may sell their shares in anticipation that it will reduce the number of cases, RHB Research Institute analyst Alan Lim noted in an August 13 report.
King of Malaysia
When it comes to making gloves, Malaysia is king: It produces about 65% of the world supply of rubber gloves, and the Plantation Industries and Commodities Ministry estimates that exports will climb 45% this year.
Riverstone peers Top Glove Corp. and Hartaleg Holdings Bhd. Are now among the five most valuable companies on Malaysia’s benchmark index. Their shares have jumped more than 192% this year, lifting the net worth of their billionaire founders, according to the Bloomberg Billionaires Index.
Fortunes in the country are booming even as the economy has grown the most since the Asian financial crisis. This exacerbates the already widespread inequality. Knight Frank estimates that wealth creation is the 10th fastest in the world – while the average income last year was 7,901 ringgit ($ 1,882). The company’s wealth report from 2020 projected that the number of Malaysians with more than $ 30 million between 2019 and 2024 will swell by 35%, compared to 2% between 2018 and 2019.
The rise of the gloves industry to global dominance has created an enormous need for foreign workers, leading to controversy over its treatment. The U.S. last month imported the products from two Top Glove units because of “reasonable evidence of forced labor.”
The world’s largest glove maker said last week that although it continues to hold talks with the US, demand is picking up in many other countries where the outbreak has resumed.
List of Singapore
Unlike its rivals, when Riverstone decided to go public in 2006, neighboring Singapore took over. That is because Malaysia had strict currency controls and the funds raised in the city-state were more easily transferable to China and Thailand, where the company expanded, according to its spokesman.
Riverstone has an annual production capacity of about 9 billion gloves, according to its latest annual report. Profits more than doubled to 137.5 million ringgit in the first half of the year.
Wong co-founder in 1989 the maker of nitrile gloves after working as a research and development chemist in a company that supplied cleanroom products. He had no plans to build his own business.
“The opportunity presented itself only because the company where I worked for shutdown, and we were able to use their production lines,” he said in an interview with the Singapore Exchange in 2016. With the competition being fiercer , had to close many peers in Malaysia. “We realized we needed to provide a service to our customers.”
(Move updates with share in sixth paragraph)
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