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KUALA LUMPUR: The 2021 budget has proposed that the country’s four major rubber glove manufacturers will contribute a total of RM400,000 to efforts to combat the Covid-19 pandemic.
The four firms comprise Top Glove Corp Bhd
, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan Rubber Industries Bhd.
In presenting the 2021 Budget, Finance Minister Tengku Zafrul Abdul Aziz said the companies have pledged to help cover some of the costs, which include the costs of vaccines and medical equipment.
“The government appreciates the commitment of the private sector, NGOs and people who contribute during this difficult period,” he said.
In the run-up to the Budget presentation, there was talk in the market about a potential windfall tax imposed on rubber glove companies in light of the windfall profits achieved during this period.
The top four glove manufacturers saw revenue and profits hit record highs as demand for rubber gloves increased and average selling prices (ASP) increased together.
Top Glove, the world’s largest manufacturer of rubber gloves, posted a 412% year-on-year increase in net profit to RM1.87 billion in its recently ended financial year, while revenue grew 50.72% to RM7, 24 billion.
Strengthened by rising valuations, the company has since become the second largest by market capitalization in Bursa Malaysia, followed by Hartalega in third place.
The outlook for the glove sector remains bright as analysts forecast that demand for rubber gloves will remain high over the next few months and ASPs will continue to rise.
“We highlight that the industry ASP during the months of September to December is increasing monthly between 10% and 30%, indicating that the supply shortage has further boosted the ASP,” said Raymond Choo, analyst at Kenanga Resarch, in an October note.
At the end of today’s market trading, Top Glove rose 20 sen to RM8.50 per share, Hartalega gained 20 sen to RM18.20 per share, Supermax rose 52 sen to RM9.78 per share and Kossan gained 29 sen to RM7 . 49 per share.
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