Top Glove to invest RM200m in FY16 for organic growth

by **Cals** Wed 21 Oct 2015, 04:12

Top Glove to invest RM200m in FY16 for organic growth

By Supriya Surendran / theedgemarkets.com | October 20, 2015 : 3:10 PM MYT

KUALA LUMPUR (Oct 20): Top [size=16]Glove Corp Bhd ([You must be registered and logged in to see this image.] Valuation: 1.10, Fundamental: 2.50) will set aside RM200 million for its financial year ending Aug 31, 2016 (FY16) for organic growth, according to its chairman Tan Sri Lim Wee Chai.

"We have plans to grow organically, therefore we have allocated RM200 million for expansion of our factories," he told reporters after the group's fourth financial quarter ended Aug 31, 2015 (4QFY15) and FY15 financial results briefing today.

The group's blueprint for expansion includes its factories F27 in Lukut, Port Dickson; F6 in Phuket, Thailand; and F30 in Klang, Selangor. The three factories are expected to churn out 7.8 billion glove pieces per annum by February 2017.

Top Glove currently has 25 glove factories running 484 production lines producing 44.6 billion glove pieces per annum, and by February 2017 the group targets to have 26 factories running 540 production lines producing 52.4 billion pieces per annum.

On mergers and acquisition activities, Lim said the group has a target to acquire one company per year.

"Our acquisition targets are companies with businesses related to our industry, our target is one company per year, and seeing that our balance sheet is quite healthy, we may set aside up to RM1 billion for mergers and acquisition activities," said Lim.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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