Karex expands into glove business through Thai subsidiary

PETALING JAYA: Karex Bhd is venturing into the manufacturing and sale of gloves through its wholly owned subsidiary Innolatex (Thailand) Ltd.

The group plans to establish a new manufacturing facility to supplement its existing operations at Innolatex’s plant in Hat Yai, Thailand with an eventual planned capacity of up to 2.5 billion gloves annually.

“Karex intends to manufacture and sell medical gloves that are typically worn by healthcare professionals and workers in the medical field. The medical gloves are intended to be made from nitrile, natural rubber and any other new materials that may be developed by Karex’s research and development efforts,“ Karex said in a stock exchange filing today.

Innolatex currently manufactures condoms, personal lubricants and other rubber products including catheters. The new manufacturing facility for the manufacturing of medical gloves will not affect the current prodcution capacity of Innolatex.

At the initial stage, Karex intends to set up two production lines within 12 months which is estimated to have a yearly production capacity of up to 500 million gloves (Phase 1) with the remaining production lines to be gradually set up over the course of the next 48 months.

The manufacture and sale of gloves is expected to commence commercial production within 12 months.

Karex will require a total estimated capital expenditure of RM40 million in Phase 1 which will be funded through a combination of internally generated funds and/or bank borrowings.

In addition, the manufacture and sale of gloves is expected to offer an additional complimentary line of products within Karex’s existing medical business segment that currently consists of catheters, ultrasonic probe covers, test kits and hand sanitisers.

Karex posted a net profit of RM1.43 million in its fourth quarter ended June 30, compared with a net loss of RM1.01 million a year ago, while revenue rose 3.9% to RM91.09 million from RM87.66 million sustained through an increased contribution from the sexual wellness segment.

For the full year period, its net profit was 11 times lower at RM228,000 from RM2.53 million a year ago, due to higher tax expenses, while revenue rose 4.4% to RM395.07 million from RM378.48 million.

Karex said the ongoing Covid-19 pandemic has presented a unique challenge to the sexual health and medical devices industries causing widespread disruptions to operations and supply chains. Along with the emphasis on social compliance, this has caused consolidation in the industry and a disruption to the supply of condoms globally.

“In spite of this, condoms remain an essential tool for family planning as well as preventing the spread of HIV and other sexually transmitted infections. The group remains confident that we are uniquely poised to overcome the aforementioned operation hurdles in order to take advantage of potential opportunities presented by the renewed global emphasis on hygiene and disease prevention.”

source https://www.thesundaily.my/business/karex-expands-into-glove-business-through-thai-subsidiary-JM3608812