25 June 2021 09:30 am
The pace of business growth could moderate at Dipped Products PLC in the medium term after the global glove maker for industrial and medical needs recorded soaring sales fuelled mostly by the pandemic and the shift in sales from a key global supplier, which together pushed the firm’s profits to its highest-ever levels.
The Hayleys group’s subsidiary recorded its best ever sales and profits of Rs.46.4 billon and Rs.5.2 billion respectively for the financial year ended March 31, 2021 up from Rs.30.5 billion and Rs.748.1 million in the previous year. But the company is expecting its sales to moderate in the current financial year and in the medium term, while pressure is expected on prices and margins due to capacity expansion by regional manufacturers and the general increase in commodities prices.
“The outlook for the sector remains positive through 2021 although demand growth is expected to moderate in the medium term,” said Mohan Pandithage, Chairman and Chief Executive Officer of Hayleys PLC.
The company also benefited from the shift in orders after the United States banned imports from two subsidiaries of Top Glove, the world’s largest rubber manufacturing company, on charges of forced labour since July 2020, which expanded into all disposable gloves originating from its factories in Malaysia.
“Capacity expansion by manufacturers in the region will exert pressure on price while commodity price increases will exert pressure on margins,” Pandithage said in his annual operations review.
However, Dipped Products officials believe the demand for the company will remain above pre-pandemic levels due to increased health and safety consciousness post COVID-19.
From the onset of the pandemic, the company saw rising orders for its hand protection solutions for industrial and household needs and medical and non-medical purposes—the latter two of which are manufactured in the group’s factories in Thailand. Dipped Products is one of the leading non-medical rubber glove manufacturers in the world, and accounts for 5 percent global market share. The company’s products now reach 70 countries.
During the year, the company acquired over 36 new customers in both household and industrial segments while retaining the existing accounts.