Supermax confirms diversification into contact lens biz

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KUALA LUMPUR (April 24): The world's second largest rubber glove maker by volume Supermax Corp Bhd announced today that it is diversifying into the manufacturing of contact lenses, confirming an earlier report by The Edge Financial Daily on March 16.

Supermax'(fundamental: 1; valuation: 0.8) chief executive Datuk Seri Stanley Thai said the group is also venturing into the production of eye care and lense care products.

As for its contact lenses, Thai said those will be sold to markets in the US, UK, Germany, Canada and Brazil via the firm's distribution centres overseas.

"Our existing glove customers will be ready to take our products for onward distribution in their countries. It will just be adding a new product into their supply chain," he told a press briefing on the second day of the Invest Malaysia 2015 conference.

The Edge Financial Daily had reported, quoting sources, that the company was getting is production line to manufacture contact lenses ready for commissioning in June or July this year.

According to Thai today, the company initiated the new venture in July last year and the move is expected to need a capital expenditure of some RM65 million by June or July this year.

The factory that manufactures contact lenses, he said, will be located in Selangor. It will be highly automated and not labour intensive, he added.

Thai, however, did not reveal the financial contribution from the new venture, nor when production is to commence, saying instead he will announce more in an upcoming launch.

Thai assured its stakeholders the diversification into contact lenses would not see less focus on glove manufacturing, as it will complement Supermax's core business.

Meanwhile, Thai expects raw material prices to experience less volatility this year, though he foresees the foreign exchange rate (forex) to likely portray more fluctuation.

"Rubber and nitrile prices are likely to stay at their current levels. Forex will see volatility, whether it is the strengthening of the US dollar or the weakening of the ringgit," he said.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)