2 Key Insights to Learn from Top Glove’s Executive Chairman

Top Glove (SGX: BVA) is among one of the newest stocks in Singapore’s market. The rubber gloves manufacturer was listed in Singapore just last month by way of introduction.

Top Glove is the world’s largest natural rubber gloves manufacturer and has an annual production capacity of 45 billion gloves. It operates 25 manufacturing facilities and exports its products to more than 195 markets worldwide.

Its chief executive, Tan Sri Dr Lim Wee Chai, was recently featured in an interview series.

There might be insights we can glean from Top Glove’s chief executive. Here are two key insights I picked out from the interview:

1. It’s a marathon, not a sprint

During the interview, Dr Lim reflected on the earlier days of Top Glove. He said that the glove manufacturer had started as the smallest player in the sector but had sought continuous improvement. He said:

“It was like running a marathon. Every day, we looked for areas to improve on – from sales and marketing to technical knowledge. That was how we built the company from scratch.”

The effort has paid off thus far. At the moment, Top Glove has a 25% market share in the natural rubber gloves segment.

2. …And the marathon is ongoing

Despite Top Glove’s achievements, Dr Lim is not resting on his laurels. He notes that success will attract competition:

“Any business with strong demand will invite competition, and new players are increasing all the time. When supply outstrips demand, our margins will get hit, so our priority is to control costs and boost production efficiency.”

Top Glove is addressing this by automating its manufacturing processes. There are benefits that come with automation. Dr Lim noted:

“Every year, automation costs are falling, while labour costs are rising. Robotic systems allow us to produce gloves with better and more consistent quality, as well as reduce wastage.”

It is likely that Top Glove will continue to be in the marathon. Dr Lim has set a target for Top Glove to increase its market share to 30%. As a bit of trivia, Dr Lim also wants to live to a hundred, another target that he has set for himself. He is currently 58 years old.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.