Supermax sees 20% growth this year

KUALA LUMPUR: Rubber gloves manufacturer Supermax Corporation Bhd expects to rake in an earnings growth of between 15 to 20% for the financial year 2011, supported by its planned capacity growth and varying of product mix, in line with market demand.

To support the growing demand globally, Supermax said it will fast track the construction of a new plant in Meru, while rebuilding its Sg Buloh plant into a full surgical glove production facility.

Once completed, the Sg Buloh plant will increase its surgical glove capacity by more than 10-fold, it said in a statement today.

Supermax said it may also switch more of its production lines to produce nitrile gloves as increasingly, buyers are purchasing it, compared to the powder free natural rubber ones.

The company, has so far switched 30% of its current line to nitrile gloves production from 24 per cent previously.

“Should the demand for nitrile gloves continue to rise, the group is well placed to meet the market demand, as up to 70% of the group's production lines are built to be inter-swithcable between natural and nitrile rubber,” it highlighted.

The company recorded a pre-tax profit of RM177.4mil in the financial year ended Dec 31, 2010 compared to RM151.5mil in the previous year.

Revenue was higher at RM923.3mil from RM803.6mil previously, reflecting the result of the implementation of its capacity expansion plans, close monitoring and management of major costs elements as well as efficiency initiatives taken during the year.

Pre-tax profit for the fourth quarter, was however, down to RM32.8mil from RM50.3mil previously, while revenue was higher at RM232.7mil from RM196.4mil.

The company said it has taken steps to adjust glove prices on a more regular basis to pass through the cost increases, due to rising latex prices to record levels and the weakening US dollar.

“Despite the rubber glove industry continuing to face strong challenges at present, it remains resilient as shown over the years.

“We believe the dollar will not see a significant fall this year as it did in 2010, while the latex price will correct itself to more reasonable levels, as more supply comes into the market and the wintering season at the end of the first quarter 2011,” it added. - BERNAMA