Introduction To Top Glove Corporation Berhad Essay

top glove locoweed was Started In 1991 In the Beginning Top manus familiarity had just 1 Factory 3 Production lines and 100 Staff, that Now it Has Become the Most Successful and Largest synthetic base hit Glove manufacture resulting in 25 factories which they had just 1 iodin when they started and instantaneously has 470 Production lines and a capacity to produce 41.1 Billion Gloves per Annum. Top Glove Corpo dimensionn has more than 10 Branches Not In Malaysia but has as well Spread In China and Thailand The Main Activities of Top Glove argon Investment holdings and readiness of Management services. Top Glove atomic number 18 one of the orotundst latex gloves, nitrile, surgical, ho aimhold, Cleanroom,Vinyl and more types of glove Producer and meets High Quality Products and meets the Increasing expectations of the International Top Glove Corpo proportionalityn was Listed 2nd In Malaysian Bourse and within a year It was promoted to the Capital city of Malaysia Kuala Lu mpur Stock Exchange (Bursa Saham) .It consists Sh atomic number 18holder fund worth 1.28Billion with an yearly disorder which is almost 2.31Billion as at financial year ended 31 August 2012.Tan Sri Lim the Founder of Top Glove Achievements has A Huge reference for Companys Success Not Only Tan sri Lim But the Highly Committed and Motivation of Board of film directors Together with 11000 Strong Work Force. Customers ar the Important Factor for Top Glove Company their motive is to Provide High Quality Products with affordable comprise and To Provide them the best customer service. The Company is looking forward To Invest IN R&D IT and Automation to make sure to Improve The Quality and Production Efficiency. Looking At the progressing Top Gloves Objective is to Capture 30% of the Global Market sh are by 2015, (Top Glove, 2013) (EMIS, 2013)1.1 TOP GLOVE CORPORATION VISION AND foreign missionWe Strive to be the Worlds Leading Manufacture with Excellent Quality Glove Products an d Service enrich and Protect Human Lives CORPORATE agency To Be World Class Glove Manufacturer by providing top Quality products withExcellent services through continuous Improvements and Innovation (Top Glove, 2013) 1.2 KEY EXECUTIVES defecate Chai Lim ChairmanKim Meow LeeManaging DirectorCheong Guan LimExecutive DirectorSiew Bee TongExecutive DirectorArshad Bin AyubIndependent Non-Executive Director (Company)1.3 CHAIRMAN LIM WEE CHAI PROFILE(Top Glove Corporation Berhad, 2012)Lim Wee chai is a Malaysian citizen aged 54 He was graduated in Bachelor of Science degree in physics from University Malaya and completed his master degree in parentage administration Sul Ross State University in Texas, United States. Lim wee chai was appointed as a chairman at top glove corporation on quaternate September 2000. Top glove Corporation Berhad was started with only 3 production lines under the Chairman lim wee chai Leadership and visions top glove have draw worlds largest rubber glove produ cers and has captured 25% of the world market share. The company now has more than 23 factories and 457 production lines in Malaysia and on the late(prenominal) counties which are china and Thailand. The Production capacity is to produce 40 billion pieces of gloves per annum, everyplace thousands of customers demand in more than 185 Countries. He has certain 10 awards for his achievements success and contribution towards the Glove Industry (Top Glove Corporation Berhad, 2012)2.0 INTRODUCTION TO HARTALEGA HOLDINGS BERHAD(Hartalega, 2013)Hartalega Berhad Manufacture and sell latex and Nitrile gloves.The companys latex and Nitrile gloves consists of examination and Surgical, Laboratory, Clean room gloves, atomic power plant etc.It also deals in retail and wholesale of gloves, Property leasing research and development of mechanisation systems. Hartalega was established in 1988 with the vision to produce gloves to protect the important thing which is Life, Hartalega Used to beOne lin e operation in the beginning but now it is one of the most largest Company with 53 Production lines, and a capability to produce 12 Billion gloves Per Year. Since the Start, Hartalega every single operation is been consecrate to Tradition of Excellence, they are delivering the best quality through state of the art equipment, high quality system and dedicated workers their products are high recognized completely over the world Hartalega Success isBecause of their loyal customers and Consistent improvements in quality of products, reliable service with efficiency by the culture of open and honest approach to commerce. Hartalega has Huge Market only over the world which are in North America, atomic number 63, Asia, Australia Malaysia Hartalega is the company which has produced a lot types of products compare of its competitors and they are origin one who has produced it which are Polymer Coated Powder-Free Examination Gloves, Low Protein Latex Examination Gloves, Robotic glove str ipping system which helps to strip gloves off from the production lines, first one to produce high-stress relaxation NBR Examination and Surgical gloves, first industry to use oil Palm Empty fruit bunches as biomass fuel to produce mania for production process and Many More products which had produce 1st the Industry. Hartalega has earned a lot of Awards Because of their hard work, dedication and motivation. (Hartalega, 2013) (Businessweek, 2013)2.1 BOARD OF DIRECTORS1. Kuan Kam HonExecutive Chairman and Managing Director2. Chuah Phaik SimIndependent Non-Executive Director3. Dato Mohamed ZakIndependent Non-Executive Director4. Kuan Mun KengNon-Independent Executive Director5. Kuan Mun LeongNon-Independent Executive Director6. Liew Ben PohNon-Independent Non-Executive Director (Haralega, 2012)(Hartalega Holding Berhad, 2012)2.2 HARTALEGA CHAIRMAN PROFILE(Hartalega Holding Berhad, 2012)Kuan Kam Hon aged 65, Is the Executive chairman and Managing Director atHartalega, he was appointed on May 7, 2007. Kuan Kam Hon is responsible for all business strategic plannings and whole operations in the group including research and development, He started his vocation in the construction company named kuan Yuen & Sons Company which was a well-known construction company in 1970s, in 1981 he formed Hartalega Sdn Bhd Under his leadership Hartalega has now become a reputable producers of latex gloves in the industry in Malaysia and is public listed in bursa Malaysia. He has created a set of Management with Higher standards and encourages creativity and innovation to produce highly-skilled personnel. (Hartalega Holding Berhad, 2012)3.0 RUBBER GLOVE INDSUTRY ANALYSISThe rubber demand has been increase rapidly high after the H1N1 Pandemic in 2010. Rubber glove industry is going to witness Lower demand as there is no Huge Disease found in Humans, Plants or Animals since live year, Rubber Glove Industry totally depends on its usage on medical sector, Industry has been facing rece ssion time to time. Malaysia is the largest Producer and exporter of Rubber gloves at present, Malaysian industry of rubber gloves has high Demand all over the world, Top Producers of Rubber gloves are, Top Glove, Supermax, Kossan rubber industry and Hartalega. Malaysian Industry exports to the US, Europe, Latin America, China and India, Us is the largest Importer of Rubber Gloves as their expenditure on health Care has gone high as percentage of GDP Since 2000. UK and European Countries are following the same trend of using more hygienic products.And is expected for early(a) countries as well Demand for Rubber gloves Have change magnitude in Countries like India, China and Brazil in the recent years as they are more concerned to their healthcare and wants to use hygienic Products, Demand for lower-end pulverize latex gloves is high in developing countries who are more cost conscious which is cheaper than powder-free latex and nitrile gloves, The developed countries such as US and Europe prefer to use Powder-free latex and Nitrile gloves. (Koncept Analysis, 2012)4.0 FUTURE OUTLOOK OF RUBBER GLOVE INDUSTRIES4.1 HIGH DEMAND OF GLOVESRubber Glove Industry exit be having long preconditioninusdemand for their products from the highly developed Countries. Emerging economies may possibly drive high future demand as their population is increasing, they are more aware of the importance of hygienic products in medical sectors as will be having high demand of High quality of Healthcare products and services. Health Care Expenditures is increasing for most developed Countries, which has increase demand for gloves, which may affect increase in cost but still ignore be manageable. Gas and Labor cost are expected to be increase In 2013, but no sure if that can make a big impact of Glove market (lee, 2012)4.2 STABLE MARKET SHARE, CAPACITY TO INCREASETop 4 Glove Producers may not become M &A Targets. Kossan Rubber industry may have a chance of being such a target if w e pick among the four Largest Producers. The Rubber Glove Companies are increasing their production capacity to remain in the competition. Annual Capacity growth is expected to be about 18% or 14.2BN pieces in 2013 (lee, 2012)4.3 RISKS INVOVLED IN RUBBER GLOVE INDUSTRIESRubber Glove Industries can face various kinds of risks which are as follows 1. Competitors in this Industry have aggressively expended their capacity plans this can result in an oversupply 2. Sharp instability in latex costs and foreign currencies resulting in near term margin squeeze 3. policy-making Risk, domestic and regional, Glove manufactures source 50% of their raw material from Thailand. Risk is low production of NR latex and lower supply at glove manufacturers 4. Infrastructural bottle necks and Labor Shortages Supply of Malaysias Natural Gas is reached its maximum point to the Glove industries and new allocations are expected to come, any delay in new allocation will become a huge problem for Glove Indu stries for that they have to use alternative fuel for production with higher cost (Michelle Foong, 2012)5.0 fiscal ANALYSIS5.1 FINANCIAL ANALYSIS FOR TOP GLOVE CORPORATION BERHARD5.3 PROFITABLITYProfitability ratios shows that profit earning capacity of a business for the sake of clear understanding advantageousness ratios classified into two categories general profitability ratios and overall profitability ratios, The gross profit margin ratio (or gross margin ratio) provides clues to the companys pricing, cost structure and production efficiency. A low profit margin ratio indicates that low amount of earnings, required to pay fixed costs and profits are generated from revenues. (Thukaram, 2007). Top Glove Corporation gross profit margin has been increased as compare with the profit ratio in 2011 and 2012, 2011 it was 11.44% in 2012 its 16.63 same goes for final profit margin, but with less expenses. Top glove Corporation profit earning capacity has been increased impressivelyPro fitability20122011Gross profit margin lowest profit MarginExpenses margin16,63 9,87 = 6.76%11,44 6,57 = 4.87%5.4 LIQUIDITYLiquidity ratios provides information on the time structure of debt and the firms ability to meet its short term obligation Current ratio is balance-sheet financial performance measure of company liquidity. Current ratio indicates a companys ability to meet short-run debt obligations. The current ratio measures whether or not a firm has enough resources to pay its debts over the next 12 months. Quick ratio is viewed as a sign of a companys financial strength or weakness it gives information about a companys short term liquidity. The ratio tells creditors how much of the companys short term debt can be met by selling all the companys liquid assets at very short notice. (Emilio Colombo, 2006).Liquidity ratios shows ability of the company to pay back its debts which top glove has improvedfrom 3.121 to 2.951 in 2012LIQUIDITY20122011Current ratioQuick Ratio5.5 EFFI CIENCYEfficiency ratios measure how efficiently a firm uses its resources. The average collection flow rate shows the average number of days it takes your business to collect hire for sales to customers on credit, The accounts payable turnover ratio shows how quickly your business pays its bills and how often payables turn over during the year. Trends in the accounts payable turnover ratio demonstrates how your business handles its outgoing payments and can help you assess the cash situation of your business. This efficiency ratios shows that top glove fixed asset turnover has been increased from 2.9 in 2011 to 2.93% in 2012 debtors collection time has also slight more efficient compared to 2011 it was 47 days in 2012 it is 46 days meanwhile creditor payment is facing more delays compared to previous year which was 39days in 2011 turn into 44days in 2012 (Emilio Colombo, 2006)EFFICIENCY20122011Fixed asset turnoverDebtors collectionCreditor paymentStock disturbance5.6 CAPITAL STRU CTURECapital Structure is a mix of a companys long term debt, specific short-term debt, and common rightfulness and preferred equity. The capital Structure is how afirm finances its overall operations and growth by using different sources of funds. The interest coverage ratio indicates the extent of which earnings are gettable to meet interest payments. A interest cover ratio means less earnings are available to meet interest payments and that the business is more vulnerable to increases in interest rates.Capital Structure20122011Interest CoverGearing ratioINVESTORSFinancial ratios are used to analyze company performance, Return of equities investors is much greater than that applied to debentures may be because this investment class have a huge risk, and run-of-the-mill shareholder are the best group of investors for an organizations. The Price earning ratio for an organization is used to compare the financial position of a company compare to other organizations, this means the better financial position of a company is according to PE Ratios the lower risks is for its investors and shareholders. Organizations which want to expand their dividends will seek to over a large amount of their earnings whereas organizations which have high cash holdings are able to pay higher dividends if they wish to, the relation between dividends and earnings are calculated by dividend cover (Woods, 1999).Investors2012RM0002011RM000ROCEROEEPS0,32770,1829Earning YieldDividend PayoutDividend Retention1 0,478 = 0,521 0,59 = 0,416.0 FINANCIAL ANALYSIS FOR HARTALEGA HOLDINGS BERHAD6.1 PROFITABLITYThese figures shows that Hartalegas gross profit margin was 37.15% In 2011and it is fall in 2012 to 31.85%, Net profit margin is also decreased in 27.9% 2012 which was 33.4% in 2011 it tell that company is underperforming compared to last years performance. But expenses are decreased from 4.75% to 3.95%Profitability20122011Gross profitNet Profit MarginExpenses Margin31,85 27,9 = 3.95% 37,15 32.4 = 4.75%6.2 LIQUIDITYThis Table shows Liquidity of Hartalega Company their ability to pay their debts is Increased compared to 2011 which was 3.631 Now increased to 4.421 in current ratio. If we measure that in quick ratio it also shows anIncrease from 2.811 to 328Liquidity20122011Current RatioQuick Ratio6.3 EFFICIENCYThis table shows The Figures how Efficiently hartalega corporation is using their resources in 2011 their fixed asset turnover was 2.11 which is increased to 2.45% it tells us that and debtors collection halt is decreased from 50 days to 46 days so they are collecting their debts earlier compared to previous year and creditor period in also decreased from 45 days to 35 days they are able to pay back their Creditors earlier than 2011 and stock turnover is also increased from 51 days to 56 days. This table tells us that hartalega is using their resources very efficientlyEfficiency20122011Fixed asset turnoverDebtors collection periodCreditor paymentStock turno ver6.4 CAPITAL STRUCTURECapital Structure20122011Interest CoverGearing RatioINVESTORSInvestors20122011ROCEROEEPS0,2765 pence0,2618 penceEarning YieldDividend PayoutDividend Retention1 0,43 = 0,571 0,29 = 0,717.0 RECOMMENDATIONS AND CONCLUSIONSRubber Glove industry has huge demand in market and in future it will be demanded even more Developed Countries and developing countries are very concerned to use Hygenic products in their medical sectors and so their medical care expenditures will be increasing the demand for Gloves will also be increasing. As For Under developed Countries If there is a hope for them to Increase their Economy and they will also be concerned to use hygienic products like other Developed Countries demand for the Rubber Gloves will go even higher. Malaysia has dominated the Rubber Glove Industry and Is the King of rubber gloves. Top Rubber and latex gloves manufacturing companies are In Malaysia So there is a lot more competition with in Malaysia on this Busine ss and all the companies are trying to improve their capacity top Glove Manufacturing companies In Malaysia are Top Glove and Hartalega which are performing extremely well in this business and their products are demanding all over the world.Malaysian Organizations are the largest world exports of rubber gloves industry where as other countries like Thailand have no aspiration with Malaysian Industries the Biggest Strength of Malaysian industries are their labor production each worker in the rubber glove industry are three propagation more productive than Thailand and Indonesian workers. So there is Nothing to worry about at the moment that some Country Might take over their Market. There are few things Which has to be considered are political relations with other countries, Thailand supplies 50% of Raw Material to make gloves to Malaysia. Any Political append can cause a lot of problems to the Rubber Glove manufactures.BibliographyBusinessweek, 2013. http//investing.businessweek. com. Online Available at http//investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=HARTMK Accessed 7 July 2013. Emilio Colombo, L.S., 2006. Contribution to economics. In M.B. Werner A Muller, ed. Financial Market Imperfections and Corporate Decisions. bare-assed york Physica-Verlag. p.174. EMIS, 2013. http//www.securities.com. Online Available at http//www.securities.com/Public/company-profile/MY/Top_Glove_Corporation_Bhd_en_1663501.html Accessed 7 July 2013. Haralega, 2012. Unlocking Potential. Annual Report. Kuala Lumpur Haralega Holdings Berhad. Hartalega Holding Berhad, 2012. Unlocking Potential. Annual report. Kuala Lumpur Hartalega Holdings Hartalega Holdings. Hartalega, 2013. Hartalega.com. Online Available at http//hartalega.com.my. Accessed 7 July 2013. Koncept Analysis, 2012. http//www.researchandmarkets.com/reports/2097332/global_rubber_gloves_market_an_analysis_2012. Online Koncept Analsysis Available at http//www.researchandmarkets.com/reports/20973 32/global_rubber_gloves_market_an_analysis_2012 Accessed 8 July 2013. lee, J., 2012. Malaysia Equity. Investment research daily, 1, p.23. Michelle Foong, 2012. Rubber Gloves Gloving the world. Research. Global Market Research Companies. Thukaram, R.M., 2007. Management Accounting. In Management Accounting. 1st ed. New Delhi New Age International(P) Limited Publishers. p.588. Top Glove