KUALA LUMPUR (Oct 31): Supermax Corp Bhd, which has earmarked around RM3.9 billion for the rubber glove maker's expansion, said on Monday (Oct 31) about RM1.3 billion has been set aside for the group’s expansion plans in Malaysia and a further US$550 million (RM2.6 billion) allocated for phase one and phase two of its manufacturing project in the US.
"The group has also been working on building its production capacity to capture greater top-line and bottom-line growth. However, the many versions of movement control orders that had been implemented to stem the worsening of the Covid-19 pandemic had hampered the group’s efforts to fast-track its expansion plans in Malaysia.
"The group will need to relook its plans taking into account the latest developments in the market. As for its expansion plan in the US, it remains on course and if according to plan, the year 2023 will see the group manufacture its first gloves in the US," Supermax said in its latest annual report, which was filed with Bursa Malaysia on Monday (Oct 31).
Supermax said that currently, it has a production capacity of about 26 billion pieces of gloves a year.
The group said it had embarked on an ambitious programme in Malaysia to build five plants (namely plants 13 to 17) simultaneously and about 22 billion pieces of gloves were due to have been progressively added to the glove maker's capacity by 2022 with RM1.3 billion having been allocated for the expansion programme in Malaysia.
"The progress had been hampered during the (Covid-19) pandemic and with the market conditions having taken a turn for the worse, the group has had a re-look at the plans and decided to continue to build the factory buildings and structures while putting on hold the installation of the production lines and ancillary machines," Supermax said.
Supermax said the group will monitor closely the prevailing and expected market conditions before deciding on the next steps for its planned expansion in Malaysia.
In the US, Supermax is building a glove factory within Texas' Brazoria county.
Supermax had initially announced to Bursa its planned US glove factory on Dec 17, 2021.
In a statement attached to the Bursa filing, Supermax said the new manufacturing facility would be build in four phases on a 215-acre (86ha) land and that upon completion of the four phases, the total installed production capacity of the manufacturing facility will be 19.2 billion pieces of gloves a year.
At 5pm on Monday, Supermax's share price closed up 2.5 sen or 2.66% at 96.5 sen for a market value of about RM2.51 billion.
Supermax has around 2.6 billion outstanding shares, according to its annual report.