Aspen Group Holding Limited’s subsidiary, Aspen Glove Sdn. Bhd. (AGSB) has entered into a sales and distribution agreement with a distributor, estimated to be worth US$100 million, for the offtake of their 2021 production.
The agreement estimated the production of 1 billion pieces of nitrile medical grade examination gloves and natural rubber medical grade examination gloves from May 1to December 31 this year.
Notably, the agreement has secured AGSB US$100 million in sales value on the assumption of a provisional average selling price (ASP) of US$100 per one thousand pieces of gloves.
The distributor paid AGSB cash deposit amounting to US$ 2 million which is two percent of the value in sales value.
Gloves will be distributed to an original equipment manufacturing (OEM) basis to the Europe (EU) and the United States (US) markets with the licenses being in place for the sale and distribution.
The agreement is for 2021 and will be renewed subject to mutual agreement between the parties.
“This agreement relieves us the need to manage sales and to negotiate with various parties. AGSB will now focus on accelerating the expansion plans to include six more additional lines in phase 1b. Additionally, adding 12 lines for phase 2,”
“Production will commence from Q3 2021 onwards and Q2 2022 beyond, respectively,” M. Murly, President and Group Chief Executive Officer (CEO), said.