ACE Market-listed AT Systematization Bhd (ATS), an integrated designer and manufacturer of industrial automation systems and precision engineering solutions provider, has signed a Share Sale Agreement (SSA) to acquire 100 percent of Pearl Glove Sdn Bhd (PGSB), for an amount of RM22 million.
The acquisition will propel ATS immediately into the glove industry, by virtue of acquiring a turnkey glove operator, that manufactures industrial and safety gloves. The immediate outlook for Pearl Glove’s existing business, as a trusted and tested OEM/ODM manufacturer of safety gloves is extremely positive as the demand for the industrial safety gloves increases proportionately with improving workplace health and safety practices globally.
However, ATS acquisition of PGSB also includes an expansion plan which looks to leverage on the current unprecedented demand for medical grade nitrile examination gloves.
ATS will leverage on PGSB’s existing expertise and network in gloves manufacturing to capitalise on the demand created by the Covid 19 pandemic, by planning expansionary ventures to turn PGSB into a full-fledged medical grade nitrile examination gloves manufacturer, capable for producing up to 3 billion pieces of gloves, within 36 months.
The current market conditions are extremely favorable for turnkey operators to begin new production lines to take advantage of spot prices of gloves. Excess demand provides new players with opportunities, with the top 4 producers’ supply lines booked solid into 2021.
With ATS’s existing engineering facilities already primed for industrial automation systems, the synergies of the acquisition are manifold. ATS will be able to leverage its existing capabilities to simultaneously venture into glove engineering technology, to significantly take advantage of an amalgamation of PGSB’s glove industry expertise, and ATS’s engineering capabilities.
Increased health standards, workplace health and safety standards and a shift to more automated and precision style engineering for manufacturers will allow ATS to be fully exposed as a full-fledged participant.
The global medical examination market is expected to grow at a double-digit rate annually throughout till 2026, in line with global consumption per capita. With 67 percent of the world’s gloves being exported from Malaysia, ATS expects this venture to immediately have a positive impact on its growth potential.