How the COVID-19 pandemic created 2 new Malaysian billionaires

Malaysia produces about 65% of the world’s supply for rubber gloves and now counts at least four billionaires whose fortunes were made in the industry, including two new ones in 2020 alone.

Thai Kim Sim of Supermax Corp was the latest to claim the billionaire title, with a net worth estimated at about US$1 billion (RM4.2 billion) at the stock high earlier this month, according to the Bloomberg Billionaires Index.

A spike in demand due to the COVID-19 outbreak has propelled shares of companies making protective gear, suddenly turning the country into a hotspot for creating ultra-wealthy individuals within the sector.

Top Glove Corp, the world’s biggest maker of the product, Hartalega Holdings Bhd and Kossan Rubber Industries Bhd have all benefited. But with a fivefold jump, Supermax’s ascent has been particularly notable this year.

Thai founded Supermax with his wife in 1987, starting it as a business trading latex gloves before venturing into manufacturing in 1989. It became the first manufacturer to come up with its own glove label, Supermax, in response to the government’s call to brand Malaysian products.

The company now exports to more than 160 countries and meets 12% of the global demand for latex examination gloves, according to its website.

Just like social distancing and temperature checks, wearing protective equipment has become the norm with the virus pandemic that has already killed more than 440,000 people worldwide.

Global demand for rubber gloves could grow 11% to 330 billion pieces this year, two-thirds of which is likely to come from Malaysia, the Malaysian Rubber Glove Manufacturers Association (MARGMA) estimates.

Glove Powerhouse

Malaysia became a glove powerhouse in the 1980s, when demand began to surge with the AIDS epidemic. Thanks to low labour costs, Malaysian entrepreneurs were able to set up shop.

The country’s plantations of rubber trees – British colonists introduced the plants originally from Brazil in the 1870s – and its large oil industry help provide local manufacturers supplies to make the protective equipment.

Top Glove has more than tripled this year, lifting the net worth of its founder, Lim Wee Chai, to US$2.5 billion, according to Bloomberg calculations excluding the value of his pledged shares.

The company reported a 366% surge in net income to a record US$81 million for the three months through May, with sales also reaching an all-time high.

Local rivals Hartalega and Kossan Rubber have seen their stock double in 2020. That’s pushed the value of the Hartalega stake held by founder Kuan Kam Hon and his family to US$4.8 billion, including shares indirectly owned through holding companies.

Kossan Rubber’s Lim Kuang Sia, who’s now worth US$1.1 billion, also became a new billionaire in 2020.

Exponential Surge

With a 394% stock surge in 2020 through Monday, Supermax’s ascent is unparalleled.

The company reported a 24% increase in revenue to RM447 million for the three months through March, party-driven by an “exponential surge in demand due to the COVID-19 pandemic,” it said in its quarterly release.

The company churns out 24 billion gloves annually and is looking to expand that to 44 billion by 2024, according to its 2019 annual report. It bought additional land to increase manufacturing capacity this month which signifies the company’s commitment toward future growth.