KUALA LUMPUR (Sept 6): Supermax Corp Bhd has earmarked RM1.13 billion in capital expenditure (capex) to double its production capacity by mid-2024.

The glove maker aims to raise its production to 44.06 billion pieces per year, from 21.75 billion pieces as at end Dec 31, 2018.

The capex will be used to upgrade, rebuild and replace old lines and fund the construction of new plants.

Supermax founder Datuk Seri Stanley Thai said the group expects to be a major beneficiary of the US’ plans to impose a 10% tariff on medical gloves from China starting Sept 1.

"As far as Supermax is concerned, we will see [an increase] in export volume to the US [by] at least an additional 10% from the current 30% of our total production capacity, as a result of the imposition of a 10% tariff by the US on medical gloves made in China," he told a media briefing to announce the group's financial results for the fourth financial quarter ended June 30, 2019 today.

Thai also expects prices of raw materials such as natural rubber to decline as a result of the trade diversions in tandem with the anticipated fall in demand for natural rubber.

"Currently, the natural rubber price stands at US$1,100 per tonne and there is room for it to fall to US$900 per tonne as the US-China trade war will slow down demand for car tyres in China. Thus, this will depress the (natural rubber) price further."

At noon break, Supermax's share price was up one sen or 0.67% at RM1.50, with 2.14 million shares traded, bringing a market capitalisation of RM1.93 billion. Meanwhile, rubber prices were trading up 2 sen to RM4.40 per kg as at 12.04pm.