VIP Gloves Limited, a nitrile glove manufacturer with operations in Malaysia and listed on the Australian Securities Exchange, is pleased to announce that the Company has entered into a Heads of Agreement (HOA) with Julian Foo Kuan Lin, major shareholder of Ammorium Resources Sdn Bhd to acquire 100% equity interest in Ammorium.
Ammorium, incorporated in Malaysia in 2015 with a paid-up capital of RM1 million and having a 10-year tax-exempt status, is fully licensed to commence glove manufacturing operations.
The acquisition of Ammorium will allow VIP to oversee the construction of the 60-lines double-former medical examination glove integrated facility on 53 acres of land in Tronoh, Perak, Malaysia.
Each line is expected to have a capacity of 15 million pieces of gloves per month or a total of 900 million pieces per month and an annual production of over 10.8 billion gloves.
Group Managing Director of VIP, Mr. Jimmy Yang, said: “With the acquisition of Ammorium, we will be able to increase our glove production lines and subsequently boost our total output capacity to 13.46 billion pieces per annum when all the lines are fully commissioned, as we are also constructing a second factory with eight production lines and an annual production capacity of 1.6 billion pieces of gloves in Semenyih, Selangor to be fully operational in 2023.
“We have 6 glove production lines in operation while another 2 lines are expected to be commissioned in the next two months, and with the addition of 8 lines from the new Semenyih factory and 60 lines from the Tronoh factories, we can expect the contribution to VIP’s revenue starting from FYE 2023”.
Malaysia, which supplies around two-thirds of the world’s rubber gloves, recorded RM 52.7 billion worth of glove exports in 2020.
“Demand for gloves remain high as data from the Malaysian Rubber Glove Manufacturers Association (MARGMA) shows, and this demand will be sustained beyond the first quarter of 2022. MARGMA expects growth rates averaging between 15% and 20% per annum for rubber glove demand compared to pre-pandemic growth rates of 8% to 10%.
Many remain cautious given the rise of COVID-19 cases stemming from the Omicron variant and this is sustaining demand for PPE such as medical gloves among healthcare workers. Glovemakers are also getting orders from new users such as airlines, restaurants, retail apparel chains, and hotel operators who are looking to protect their workers. We believe this outlook will provide resilient demand for our products”.
