SHAH ALAM: Top Glove Corp Bhd is investing an initial RM100 million in Vietnam to set up a new plant to produce vinyl gloves.
The allocation will also be used towards the land cost, machinery and raw materials, said Top Glove executive chairman Tan Sri Dr Lim Wee Chai.
"It is basically to expand our vinyl glove production, instead of in China, as the cost of operation in China is getting higher. Also, we also see potential to expand our latex glove production there.
"Normally we will start the operation with 10 production lines. The plant will be built on an industrial plot in Vietnam, measuring more than 20 acres," he told reporters here after Top Glove's signing ceremony of US$310 million syndicated loan agreement with eight banks.
The consortium of eight banks is led by Citibank Bhd while the other seven participating lenders are Bank of Tokyp-Mitsubishi UFJ (Malaysia) Bhd, Hong Leong Bank, Mizuho Bank (Malaysia) Bhd, Sumitomo Mitsui Banking Corp Malaysia Bhd, BNP Paribas, Bangkok Bank Bhd and Bank of China.
The US$310 million package comprises of US$155 million 2-year term loan and US$155 million 5-year murabaha.
Lim said the money borrowed from the banks will fund the Aspion Sdn Bhd acquisition, one of the world’s largest surgical glove producers, for RM1.37 billion.
The Aspion acquisition is set to complete early next month and would contribute positively towards Top Glove’s earnings in the quarters ahead.
When asked on Top Glove’s diversification into condom manufacturing and exports, Lim replied the plant is expected to start operations from mid-2018.
All this while, he explained some of Top Glove’s existing customers also procure condoms, which is also classified as a medical device.
“We will produce the condoms on the basis of original equipment manufacturing. Toward the end of 2018, we plan to launch our own condoms under the brandname ‘Top Feel’,” Lim said.