Top Glove Bhd and Karex Bhd share a common history - their initial years were tough but they persevered, triumphed over challenges, built solid reputations and emerged as global leaders in their trade.
Today, as the world’s largest glove manufacturer and among the world’s largest condom makers, respectively, they are not resting on their laurels but continue to strive towards performance excellence, welcoming challenges and competition as a means of propelling themselves to greater heights.
The underlying reason behind their success is a strong culture of innovation and quality, and passionate leaders.
Top Glove is cognisant that getting to No. 1 spot does not guarantee that it will stay at No. 1. “We have to continue to work hard, innovate, stay relevant, surprise our customers, and continuously value-add in all our business relationships,” said its managing director Lee Kim Meow.
“The basis of our innovation or improvement is to always be industry-driven and customer-oriented. As a result, our gloves are accepted in many countries. Each country has its own standard. When doing business on a global scale, you must be able to meet all standards – that’s the first prerequisite,” said Lee.
He believes that many companies failed to make it big globally because they did not pay enough emphasis on quality. “When you are competing on a global basis, quality is key,” he stressed.
Karex, likewise, believes strongly in innovation. CEO Goh Miah Kiat said: “Without innovation, we would have been stuck where we were in the 90s.” With the change in consumer behaviour, brand owners started looking for condoms with colours, textures and even flavours. Karex was flexible enough to accommodate their requests “and I suppose that’s where our business grew quite a bit”.
Today, Karex produces 300 types of condoms of various colours, textures and flavours. “We have very innovative customers who are always pushing the boundaries. One client wanted glow-in-the-dark condoms. That’s very challenging because it’s not just about making the product glow in the dark. The condom is a medical device; it has to be safe; it has to protect. Another customer wanted 95 sizes of condoms so that anyone could go online and get a condom of the right size, just like how a woman could buy a bra in the right size.”
According to Lee, the glove industry records a healthy growth of 5% to 8% every year, largely due to the fact that disposable gloves have no substitute and are essential items. About 70% of the world’s gloves are used by 10% of the population, mainly in North America and Europe. “Imagine the potential! Glove usage is still at a very elementary stage in many parts of the world, primarily in China, India and other emerging countries.”
Lee is confident Malaysia will continue to be the No. 1 glove producer in the world. “I understand that out of 195 countries Malaysia exports to, our gloves are No. 1 in 120 of them.”
Malaysia, he said, has the advantage of raw materials, especially in latex. Moreover, Malaysians have strong entrepreneurial spirit. “The industry is driven by true-blue entrepreneurs; they have taken the industry to higher levels with various innovative approaches and techniques, and improvements in technology and HR management.”
Lee also underlined the importance of close cooperation between the private sector and the government. The Malaysia External Trade Development Corporation (Matrade), in particular, had extended great help to exporters. “At the early stage of our growth, we relied heavily on Matrade and they encouraged us to venture abroad. It’s important that if you have a successful business in Malaysia, you should expand overseas. When you go overseas, you diversify not only your country risk, but also your customer risk. Because of this close cooperation with the government, we were able to compete globally.”
While the local rubber glove industry is matured, it is far from being a sunset industry, stressed Lee. “It still has a lot of potential and value-add in terms of revenue generated per employee, which is RM200,000 per year on average. That brings a lot of foreign exchange to the country.”
Meanwhile, the local condom industry is young, with the populace still rather coy about condoms. Up to a few years ago, the perception of the industry was so negative that parents would forbid their children from working in Karex’s factories, said Goh.
But the public perception turned more positive last year as Karex underwent an initial public offering exercise and was listed in November. “The listing has elevated our profile; and there’s now more pride among our staff,” said Goh.
Since its inception, Karex had focused on OEM, with only about 4% of its 2013 revenue derived from its own brands. Moving forward, it aims to build up its own brands. “Condom is a consumer item and consumers pay heed to brands. The value of a company in this industry is in the brand. Today, we’re only selling US$0.03 a condom on average, about 10 sen. Condoms sold in the retail outlets are easily RM2 per piece.”
Karex has recently kickstarted this process with the acquisition of a US company owning a very interesting brand, ONE. “In the past 26 years, we’ve perfected the cost control measures, in producing the most cost-efficient products. The next level for us is to gather the knowledge in branding,” said Goh.
Given such visionary leaders, Top Glove Bhd and Karex Bhd can only go from strength to strength in the years ahead, while continue to do Malaysia proud throughout the world.