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Orders are expected to flow back to Malaysia, Top Glove: Increase utilization rate at the end of the year.
With the United States imposing higher tariffs on China, glove orders are expected to flow back to Malaysia. $TOPGLOV (7113.MY)$ They claimed to have received more inquiries and are expected to further increase the utilization rate by the end of the year.
$TOPGLOV (7113.MY)$ Director and Managing Director Lin Jiangyuan pointed out in an interview today. $TOPGLOV (7113.MY)$ Currently, the operating factory has a capacity utilization rate of 65% to 70%, and it is expected to further increase by the end of the year.
Because the increase in tariffs was recently announced and the news has just come out, there are no orders flowing in at the moment, but we have indeed received more inquiries. Therefore, production will indeed increase to meet these demands.
Last week, the United States significantly increased tariffs on Chinese goods, with the tariff rate for gloves set to increase to 50% from 2025, and further increase to 100% in 2026, compared to the previously proposed 25% tariff increase in 2026.
At the same time, he also holds an optimistic view on the future of the glove industry.
Gradual recovery starting this year.
Since the beginning of this year, we have seen a recovery in global glove demand, mainly because panic buying during the pandemic has gradually been absorbed, and now these stocks have been cleared, and customers from multiple countries are starting to reorder.
At the same time, he also admitted that geopolitical factors have played a role in providing opportunities for Malaysian glove manufacturers to increase their utilization rates.
There is speculation that due to the increased tariffs imposed by the United States, Chinese glove manufacturers may set up factories in ASEAN. When asked if he is worried about the competitive pressure this may bring, he believes that this can put local glove manufacturers in a more fair competitive environment.
For Chinese glove merchants, this competitive environment is different. Because in China, these companies enjoy more incentives, but these measures are unlikely to appear in other countries.
In addition, he also mentioned that regarding US tariffs, whether it will be determined based on ownership in the future.
I am not sure if there will be such a change. The current standard is based on the country, and whether it will be determined based on the ownership of the enterprise in the future is still unknown.
The first to obtain zero discharge permit.
The Selangor government is implementing the Zero Discharge of Sewerage Policy (ZDP), $TOPGLOV (7113.MY)$ actively responding and becoming the first factory to complete the ZDP licensing process.
Lin Jiangyuan said that the company has been adopting wastewater reuse since 2017, and now 70% of the factory's water comes from treated water.
He added that the company's entire wastewater treatment system has now invested 41 million ringgit, and the current wastewater treatment plant can handle approximately 4 million cubic meters of water.
Our goal is to increase the processing capacity to 6 million cubic meters of water by 2025.
Jamalia, the executive council member in charge of health affairs in Selangor, and LUAS (Selangor Water Management Institution) Harunayz, issued a license to Top Glove's Banting factory at the top glove wastewater treatment plant in Klang today, witnessed by Lin Jiangyuan, who accepted it on behalf of Top Glove, and Huang Yongren, Top Glove's Chief Operating Officer.
215 business owners have submitted applications.
Jamalia stated at the event that the state government is committed to managing and regulating the quantity and quality of environmental water sources, and encourages companies and factories to reduce the amount of wastewater discharged through wastewater reuse and recycling methods, using ZDP.
She pointed out that so far, a total of 215 business owners have submitted applications, and Top Glove is the first to receive a permit.
She stated that this policy, which came into effect in June, has not been enforced yet, but she urged relevant factories or business owners in the state to apply for ZDP permits as soon as possible. Once the one-year grace period ends, the authorities will take enforcement action against factories without permits.
The Selangor state government officially announced the Zero Discharge Policy (ZDP) through LUAS on June 20, making it the first state in Malaysia to implement the policy.
This new policy applies to 13 sectors related to water sources in Selangor, including aquaculture zones, water development projects, poultry and livestock farming, sand mining, animal slaughterhouses, industries, leisure activities, wastewater treatment, and solid waste management services, involving 0.03 million factories.
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【Interviewer】Yang Huiping
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Source of information: Nanyang Siang Pau.
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