Thursday 28 Mar 2024
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KUALA LUMPUR (Jan 29): Apparel manufacturer and fashion retailer Jerasia Capital Bhd plans to raise up to RM261.3 million by way of a rights issue with free warrants, as part of its efforts to venture into glove manufacturing.  

Jerasia, which operates Mango retail outlets in Malaysia, said it plans to install up to 10 glove dipping lines in stages over the course of 12 months to manufacture latex and nitrile gloves. These 10 lines are expected to yield a production capacity of 8.4 million pieces of gloves per day. 

The estimated capital expenditure required to construct and commission all 10 glove dipping lines, as well as its related facilities, is RM146.0 million, the group said in a statement today.

Part of the plan includes acquiring a three-acre freehold land in Negeri Sembilan, in which it aims to construct a double-story factory consisting of an office, warehouse, laboratory and production space. 

Jerasia group managing director Pronob Sen Gupta said the expansion is synergistic for the group, which had last year expanded its product portfolio into producing personal protection equipment (PPE).

"Since the outbreak of the Covid-19 pandemic, the demand for PPE to curb the pandemic has boosted the demand for gloves. On the other hand, our wholesaling, retailing and manufacturing and exporting of fashion apparels and accessories had been affected by the movement control order (MCO). 

“The glove business venture will allow us to take advantage of favourable long-term prospects of the glove industry and capitalise on the burgeoning demand for gloves, while making the most out of the opportunities created by the Covid-19 pandemic," he said.  

With the corporate exercise, the group will enter into a conditional offtake agreement with Golden Global Trading & Healthcare Sdn Bhd for the supply of gloves.  

Under the offtake agreement, Jerasia said it will supply a minimum 72 million boxes of latex and nitrile examination gloves within three years, with a monthly minimum volume commitment of two million boxes throughout the three years period. 

Subject to the completion of the factory, the first glove dipping lines is expected to be commissioned by the second half of 2021. 

Shares of Jerasia today fell 2.5 sen or 5.38% to close at 44 sen, with a market capitalisation of RM 36.10 million. 

Edited ByS Kanagaraju
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