This article first appeared in The Edge Financial Daily on November 22, 2017

KUALA LUMPUR: Supermax Corp Bhd saw its first-quarter net profit jump 42.8% year-on-year on improved efficiency and productivity after refurbishing its older production lines and streamlining of work processes.

Its net profit rose to RM27.9 million in the three months ended Sept 30, 2017 (1QFY18) from RM19.54 million a year ago. Earnings per share grew to 4.19 sen from 2.89 sen. Quarterly revenue rose 16% to RM312.02 million from RM269 million in 1QFY17.

In a filing with Bursa Malaysia yesterday, Supermax attributed the higher quarterly revenue to a higher average selling price of its products in response to increased raw material prices, as well as a stronger US dollar versus the ringgit.

Moving forward, Supermax said global demand for natural rubber and nitrile gloves remains strong with awareness in healthcare continuing to rise, increasing regulation of the healthcare sector and higher healthcare spending in the public and private sectors driving growth in demand. These positive factors continue to augur well for its business and the industry as a whole, it added.

“The Chinese government’s concerted efforts to clamp down on the vinyl glove industry in China [have] also proven to be a boon for natural rubber and nitrile glove producers as demand has shifted to them. The clampdown is due to highly polluting vinyl glove plants which do not comply with China’s environmental regulations,” it said.

“In line with our continuous improvements, we are refurbishing, rebuilding and modernising our older manufacturing plants to gain maximum efficiency in our production capabilities,” Supermax added.