Top Glove Corporation Berhad Expansion

reach mitt Corporation Berhad Expansion1. macrocosmTop manus Corporation Berhad founded by the husband and wife squad of Tan Sri Dr. Lim Wee-Chai, as a company chairman and Puan Sri Tong Siew Bee, executive director. realize in Malaysia in 1991, Top baseball baseball glove operated with only one manufactory with three minute-hand payoff lines. Nowadays, it is known as the world largest synthetic rubber manus manufacturer. Top glove embarked an impressive amplification plan with the following locateWorld Largest Rubber baseball mitt ManufacturerExisting(As at celestial latitude 2010)1. routine of Factories202. Number of Production Lines3793. Total pieces of Gloves Produced (per grade)33.75 billion4. Number of Employees10,9005. Countries of Export1806. Number of Customers900Top Glove was listed on Bursa Saham Kuala Lumpurs second board in 2001 and has been success safey promoted to the Main Market of the Kuala Lumpur Stock supplant on May 16, 2002. Top Glove has over 15 eld of experience in production of latex examination gloves (HWANGDBS Vickers Research, 2008). It has also alter overseas and set up four factories in Thailand and two in China, in addition to the 12 facilities it has in Malaysia (CIMB Research Report, 2007).1.2 Companys Core line of productsTop Gloves nature activities argon manufacturing and trading rubber gloves, synthetic gloves and running(a) gloves which are mostly used in medical, industrial and food operate industries. With an approximated 80% of their product is in the form of natural rubber gloves and the stick 20% are synthetic gloves (CIMB Research Report, 2007). Top Glove acts as a one-stop glove centre by offering a full range of services, from manufacturing glove products to packaging, branding, sales as well as scattering of finished glove products through its three primary sales offices in Klang, Malaysia Azusa, California and Duisburg, Germany (HWANGDBS Vickers Research, 2008). About 95% of the compa ny sales are for the export market.1.3 Financial PerformanceAccording to annual report 2009, Top Glove has successfully achieved the company process by presentation the affix in terminal profit for the pecuniary year. The remarkable growth of 54% of net profit in the year 2009 as compare to the year 2008 showing that Top Glove fully utilizes the advantage of its listing as existence company to generate growth that is beneficial to the shareholders.2. sales ANALYSIS2.1 sales ingathering RatesTotal sales or total receipts is the first line on any company income statement. This figure is the add up of money that company receives during the specific time of period. Total gross is rattling important to turn in money into a profit. In the gone 5 years (2005 2009), Top Glove has been profitable. The sales growth for its products showing the maturation in receipts for the every financial year.Top Gloves taxation for the past 5 yearsYearTotal tax income (RMmil)2004418.120 05641.82006992.620071228.820081377.920091529.1 showtime Top Glove Annual Report 2010The sales growth grade (%) from year to year bequeath be calculate as downstairscurrent sales previous sales________________________ x 100 introductory salesYearSales emergence Rates (%)From year to yearSales Growth Rates (%) From year 20052004200553.50200654.6654.66200723.8091.46200812.13114.69200910.97138.25 exponential functions can be applied in growth processes. The most widely accepted method acting in academics to calculate total growth can be equal by the functionsy = a(1 + r)Xwhich a = initial core in the beginning measuring stick growthr = growth rate (often a percent)x = chassis of time intervals that have passedThe exponential function in computing growth grade for Top Gloves are presented as below1. Year 2005Growth rates (%) 53.50 (0.5350)Revenue amount before measuring growth (RM000) 418.1Exponential Growth Functions y = a(1+r)xy = 418.1(1+0.5350)1y = 641.82. Year 2006Growth r ates (%) 54.66 (0.5466)Revenue amount before measuring growth (RM000) 641.8Exponential Growth Functions y = a(1+r)xy = 641.8(1+0.5466)1y = 992.63. Year 2007Growth rates (%) 23.80 (0.2380)Revenue amount before measuring growth (RM000) 992.6Exponential Growth Functions y = a(1+r)xy = 992.6(1+0.2380)1y = 1228.84. Year 2008Growth rates (%) 12.13 (0.1213)Revenue amount before measuring growth (RM000) 1228.8Exponential Growth Functions y = a(1+r)xy = 1228.8(1+0.1213)1y = 1377.95. Year 2009Growth rates (%) 10.97 (0.1097)Revenue amount before measuring growth (RM000) 1377.9Exponential Growth Functions y = a(1+r)xy = 1377.9(1+0.1097)1y = 1529.12.2 Growth Rates Analysis53.5% growth in 2005, Top Glove and the glove industry facing an exciting and challenging year when un bided hike in the prices of crude oil and raw material. Top Gloves has managed to retained company performance by continue its aggressive capacity expansion to capture a bigger share of the world glove market.54.66% in 2006, the sting of increase oil and fuel prices continues to vibrate throughout the glove and healthcare industry. These two industries feel the most pressure in deciding how to react in this feature. This is because production cost would be driven up by the increased oil and fuel prices which will impacts on the potential to deliver the products. Top Gloves still continues to stand in progressing by find over its operation costs and learned to manage the increase in the cost of oil and fuel prices. Each manufacturer can association these costs by their own way, however price increases are inevitable (Jeannie and Dana, 2006).By the year 2007, Top Glove achieved a remarkable revenue growth of 23.8% to RM1,228.8 million. The growth was principally due to the continued increased in customer base planetaryly and a extravagantlyer volume of sales attributed to the increased capacity so that the company succeeds to face on the increase in operating costs.In year 2008, the growth slows to 12.13% caused by global economy. It was tough for the glove producer to continue the business due to the miffed margin and only glove manufacturers with sizable economies of scale can fail (Malaysian Rubber Board, 2008). Top Glove definitely cannot be escaped from this phenomenon. However, Top Glove had experienced to face the current world financial crisis and continues companys big businessman to grow over the years.Year 2009 shows that the slower growth rate goes to 10.97% achieved by Top Glove. The company started the year with aware about a steadfast global demand of gloves especially in healthcare industry worked up by the global economic recovery. Furthermore, the H1N1 pandemic caused the demand of gloves contributed in brachydactylous return to all rubber glove manufacturers including Top Glove. Top Glove had adapted well in current economic environment by which its earning was boosted by higher sales and higher costs efficiency (OSK, 2010).3. SALES TRENDSales trend analysis is a review of sales during a specified period of time. It is could be increase, decrease or remain unchanged. The utilization of sales trend analysis is to monitoring performance and to predict future performance.Top Gloves sales trend increased year by year. It is showed that the company very focused on their nature business and will struggle to curb companys mission as a world elucidate glove manufacturer by providing best quality product as well as to toughen their position as the worlds largest rubber glove manufacturer.Top Gloves sales trend illustrated with a graph below ground on the graph above, it is showed that Top Glove sales trend growing over the years. The growth might be supported by the high demanded from their customer. The surge of demand for rubber gloves used for medical and protection purpose forced glove industry to raise the selling price. Similarly, Top Glove also raised its products selling price to equalize the higher production costs. Howeve r, the demand for rubber gloves remained and was in fast growing even though the selling price was high.For the 5 years, Top Glove continued achieved a remarkable profit. The global phenomena such as H1N1 and SARS pandemic, hike in the price of oil and raw material, weather, war or world financial crisis which result in boost in the demand of rubber glove. Additionally, increase in health awareness worldwide also increases the demand of rubber glove. Top Glove succeed to adapt all the difficult situation year by year by their good planning of manufacturing processes and providing a high quality of product.4. CONCLUSIONAs a conclusion, Top Glove Corporation Berhad continued achieved a remarkable profit by increasing their revenue and sales growth rate from year to year. The companys show inexpugnable sales performance was endorsed to high demand for gloves especially form healthcare industry and emerging market which demand for gloves is expected to growing for a double digit every year. Even though there are more challenges to overcome, Top Glove positive to increase their remarkable revenue and sales growth rates for every year and believe to maintain its leadership in the global market by continue providing a top quality of product.