NST Business
KUALA LUMPUR: AT Systematization Bhd plans to spend RM180 million on expanding the capacity of its newly-acquired glove manufacturer Pearl Glove (Malaysia) Sdn Bhd.
AT Systemization announced that it had signed a share sale agreement to buy a 100 per cent stake in Pearl Glove for RM22 million.
The acquisition instantly thrusts AT Systemization into the glove industry, as the latter seeks to leverage on the current unprecedented demand for medical grade nitrile examination gloves.
Pearl Glove is a turnkey glove operator that manufactures industrial and safety gloves.
AT Systemization said it wanted to turn Pearl Glove into a full-fledged medical grade nitrile examination gloves manufacturer with the planned RM180 million investment.
This will allow Pearl Glove to produce up to three billion pieces of gloves within 36 months.
"The immediate outlook for Pearl Glove's existing business, as a trusted and tested OEM/ODM manufacturer of safety gloves, is extremely positive.
"The demand for the industrial safety gloves increases proportionately with improving workplace health and safety practices globally," it added.
AT Systemization said the current market conditions were extremely favourable 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 four producers' supply lines booked solid into 2021.
"With AT Systemization's existing engineering facilities already primed for industrial automation systems, the synergies of the acquisition are manifold."
Increased health standards, workplace health and safety standards and a shift to more automated and precision style engineering for manufacturers will allow AT Systemization to be fully exposed as a full fledged participant, it added.
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 per cent of the world's gloves being exported from Malaysia, AT Systemization expects the venture to immediately have a positive impact on its growth potential.