RIVERSTONE: Stretches Limits with Breakthrough Technologies

Riverstone CEO Wong Teek Son at glove production line. Photo: Company

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, laying the foundation for the creation of Singapore-listed glove manufacturer Riverstone Holdings Ltd decades later.

“Chemistry was my favourite subject in school – I enjoyed experimenting with substances to produce chemical reactions and create new compounds,” recalled Wong, 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,” said the 54-year-old.

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 – it’s not just about making and selling gloves,” said Wong, who also holds a Master in Business Administration from Australia’s Monash University.

Customers in the hard disk drive and semiconductor industries were concerned about contamination, electrostatic discharge (ESD), corrosion and particle control. “We were able to provide a great deal of value-add by developing gloves in partnership with customers, according to their specifications,” he added.

“A lot of R&D actually goes into each pair of gloves.”

Margin pressure is a constant in the industry, Wong admitted.

Riverstone will curtail costs by increasing automation, streamlining production processes and improving economies of scale.

“Customers are always seeking discounts. Although we’ve been in cleanroom gloves for more than 20 years, we’re able to maintain margins, thanks to innovation and new products.”

Its new offerings include gloves with lower surface resistance, which enables the electrostatic charge to be dissipated, or transferred slowly to the ground, without damaging sensitive equipment or parts involved in the manufacturing process.

Riverstone also offers nitrile gloves with lower ESD voltage than those available in the market.

“We were able to achieve this by using a proprietary compounding formula in the manufacturing process,” Wong added.

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.

Riverstone has custom-made gloves with reduced chemical content for Japanese customers in the food and beverage sector, as well as gloves that come in left- and right-hand fitted sizes for pharmaceutical clients.

It is also broadening its customer base. With hard disk drives becoming a sunset industry, it is supplying gloves to other segments in the technology sector, such as solar, battery and flat panel display makers.

“We’re seeing strong demand for cleanroom gloves from manufacturers of tablets and mobile devices,” Wong added.

Looking ahead, the Group expects higher sales from its US-based healthcare customers in 2016. “North America will be the market that will enjoy the strongest growth this year,” he noted.

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 is expected to contribute more than 50% of overall revenues, with cleanroom accounting for less than half, compared to a 50:50 split in the financial year ended 31 December 2014.

“Our priority is to allocate production capacity for cleanroom gloves, given their higher selling prices and margins compared to healthcare gloves, and we’re able to do so because our production lines are interchangeable,” Wong said.

Outside of work, Wong enjoys jogging and ferrying his son, 15, and daughter, 16, to and from their tuition classes and extra-curricular activities.

“I always encourage my kids to be more active, to socialise with friends, to participate in sports. This will help them release stress.”

The eldest in a family of four brothers and five sisters, Wong tries to instill the values of optimism and hard work in his children.

“Kids always like to compare their grades with peers. I tell them ‘Don’t follow the crowd, be focused and study hard’. I also advise them not to worry – be optimistic.”

He is unabashed about past failures. “If they come back from school with sour faces because they flunked a test, I tell them about the times I failed my subjects in school, which in some cases, were a lot worse,” he recalled with a laugh.

Wong, who misses the rolling tea plantations and cool weather of Cameron Highlands, returns to his hometown once or twice a year to catch up with childhood pals and basketball team mates.

A number of those team mates are now his colleagues in Riverstone, handling operations ranging from marketing to human resource and production. An MBA classmate also runs Riverstone’s Thai operations.

“I can trust them because we grew up together, studied together, and we know each other’s characters,” he said.

“Having this network of friends to help me run the business makes my life easier – I have fewer worries.”

What does weigh on 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.

With this older generation of colleagues, issues concerning the protection of intellectual property and poaching by competitors hardly ever arise.

“We are now grooming the younger generation, who are in their 20s and 30s, but they may not have the same sense of belonging as we do,” he noted. “The question is: Can the younger generation continue this culture in the company? That is an unknown, and remains to be seen.”

• Accelerated start for phase three of expansion plan to meet increased demand from new and existing customers
• Strong demand for cleanroom gloves from manufacturers of tablets and mobile devices
• Continue to tap on fast-growing market for healthcare gloves
• While seeking growth, the company maintains a prudent approach in addressing industry’s challenges which include competition, fluctuations in raw material prices and foreign currencies