Businessman Wong Teek Son has always been fascinated by the interactions between atoms that produce different states of matter and chemical compounds.
His love for this branch of natural science spurred him to become a chemist and laid the foundation for the creation of Singapore-listed glove manufacturer Riverstone Holdings decades later.
"Chemistry was my favourite subject in school - I enjoyed experimenting with substances to produce chemical reactions and create new compounds," said Mr Wong, 54, who was born in Malaysia's Cameron Highlands hill station.
The Bachelor of Science with honours graduate from the University of Malaya worked as a research and development chemist in a company supplying cleanroom products before setting up his own business in the late 1980s.
His sole proprietorship - based in Selangor, Malaysia - provided glove chlorination, laundry and packaging services to glove makers. In 1990, together with partner Lee Wai Keong, he formed Riverstone Resources to focus on the manufacture of cleanroom natural rubber and nitrile gloves using advanced production techniques.
"I never planned to go into business. The opportunity presented itself only because the company I worked for shut down, and we were able to use their production lines," he said.
Competition in the industry, however, was intense. There were at least 300 glove factories in Malaysia. Most found it tough to survive and many closed down. "We realised we needed to provide a service to our customers," said Mr Wong, who also holds a master's degree in business administration from Monash University.
Since 1994, Riverstone Resources has pioneered the manufacture of gloves using nitrile latex in Malaysia, introduced online glove chlorination technology and developed nitrile finger cots using its own proprietary production technique.
"Nitrile generates a very low static charge and has good dissipative properties, but plastic, which is an insulator, has high static discharge. So, customers began asking for nitrile gloves," he said.
Nitrile, a synthetic rubber, is safe for those allergic to latex and is resistant to a wide range of chemicals. Nitrile disposable gloves are the most durable on the market.
For Mr Wong, formulating the chlorination process - treating newly formed gloves with chlorine to prevent adhesion on the production line - was another milestone.
This culture of constant innovation is the linchpin of Riverstone, which boasts a 20-strong R&D and technical team and an annual output of 5.2 billion gloves. It has two factories in Malaysia, one in Thailand and a fourth in Wuxi, China, with a total of 40 production lines.
It has embarked on a five-stage capacity expansion strategy on its 12ha site in Taiping, in Perak state, between 2014 and 2018.
Under the third phase, total annual output is expected to rise to 6.2 billion gloves by the end of the September quarter. It aims to boost total output by one billion gloves at the end of each phase.It expects to complete the fifth stage of its Taiping expansion plan by 2018.
To insulate revenues, Riverstone diversified into healthcare gloves. While cleanroom gloves command better margins, demand for healthcare gloves is more resilient. Pharmacies, hospitals and clinics continue to use gloves even in a downturn, said Mr Wong.
Riverstone, which listed on the main board of Singapore Exchange in 2006, has a market capitalisation of about $780 million. It was the best performer among the 29 component stocks in the SGX All Healthcare Index last year, chalking up a total return of 151 per cent last year and 472 per cent over the last three years. This compares with the average total return of 9.9 per cent for the 29 index constituents in the past year.
CAPPING COSTS, BOOSTING MARGINS
Margin pressure is a constant in the industry, Mr Wong said. Riverstone will curtail costs by increasing automation, streamlining production processes and improving economies of scale.
Its new offerings include gloves with lower surface resistance, which enables the electrostatic charge to be dissipated without damaging sensitive equipment or parts involved in the manufacturing process. Riverstone also offers nitrile gloves with a lower electrostatic discharge voltage than those available in the market.
Customisation is another strategy. "Given our flexible machinery and extensive experience, we're able to provide bespoke products to meet customer needs in the shortest possible time," he said.
The firm is also broadening its customer base. With hard disk drives becoming a sunset industry, it is supplying gloves to other sectors in the technology sector, such as solar, battery and flat-panel display makers.
Looking ahead, the group expects higher sales from its US-based healthcare customers this year. "North America will be the market that will enjoy the strongest growth this year," he said.
The proportion of sales from healthcare gloves is rising as demand from the pharmaceutical and medical sectors outpaces that of the electronics industry.
Healthcare gloves are expected to contribute more than 50 per cent of overall revenues, with cleanroom accounting for less than half, compared with a 50:50 split in the financial year ended Dec 31, 2014.
Mr Wong said: "Our priority is to allocate production capacity for cleanroom gloves, given their higher selling prices and margins compared with healthcare gloves, and we're able to do so because our production lines are interchangeable."
DON'T WORRY, BE OPTIMISTIC
Outside of work, Mr Wong enjoys jogging and ferrying his son, 15, and daughter, 16, to and from their tuition classes and extra-curricular activities.The eldest in a family of four brothers and five sisters, he tries to instil the values of optimism and hard work in his children.
Mr Wong, who misses the rolling tea plantations and cool weather of Cameron Highlands, returns to his home town once or twice a year to catch up with childhood pals and basketball teammates. A number of those teammates are now his colleagues in Riverstone, handling operations ranging from marketing to human resources and production. An MBA classmate also runs Riverstone's Thai operations.
What weighs on Mr Wong's mind, however, is Riverstone's succession plan. "Most of the management and senior positions are held by friends - they have a very strong sense of loyalty and commitment to the company, and are in the older age group of 40 to 50 years old," he said.
"The question is: Can the younger generation continue this culture in the company? That is an unknown, and remains to be seen."
- This interview is an excerpt from the Singapore Exchange's Kopi-C: The Company Brew column that features C-level executives of firms listed on SGX. A longer version can be found on SGX's My Gateway website, www.sgx.com/mygateway