Supermax bolsters US presence

To strengthen business operations in the US, Supermax Corp. Bhd announced that it has allocated US$8.5 million to start phase one of its national distribution headquarters in Chicago.
According to Executive Chairman and Managing Director Datuk Seir Stanley Thai, this new distribution facility would help the company expand its presense in North America. Phase one would be operational between March and May 2013 and it comprises the east building of the national distribution headquarters. He adds that once the facility is complete it will have about 20,900 squre metres space, providing enough room for future expansions in the next 5 to ten years.
In other news, starting July 1, Supermax Canada Inc. would be become Supermax Healthcare Canada Inc. (SHCI) and would be 67%-owned by the group, Thai said. This translates that SHCI’s financial results would be consolidated into the group’s result starting Q3 2012
As of December 2011, Supermax Canada was among the top three largest glove providers in the healthcare industry in the country.
In the meantime, he said the company would explore production opportunities in North Africa including Libya, Algeria, Egypt and Morocco.

Thai added that he expects nitrile gloves profit margins to decline in H2 2012 due to a price war among glove makers especially from China. Going forward, he said the profit margines of nitrile gloves would be between 11% to 13%.
“The nitrile glove price will decrease in line with the market caused by an oversupply situation,” he said, adding China glove makers are pushing down the nitrile gloves margin. “Although their production cost is slightly higher, they still manage to sell at lower prices because they enjoy value added tax export rebates,” Thai said.