Supermax in talks to capture Japanese contact lens market

The company aims to be among the top 5 contact lens producers in the world

By ALIFAH ZAINUDDIN / Pic By ISMAIL CHE RUS

SUPERMAX Corp Bhd is currently in talks to acquire three Japanese companies to penetrate the contact lens market in the country.

Group MD Datuk Seri Stanley Thai Kim Sim (picture) said the company’s expansion is expected to spur its contact lens brand to be a dominant player in the Japanese market.

“We have acquired one and we are eyeing a few more. The company we’ve bought sells lenses to professional groups like doctors. The other parties we are in talks with sell contact lenses at optical shops and on online platform, so we have different segments covered.

“That way, we can jumpstart into the Japanese market very quickly,” Thai told reporters after Supermax’s AGM in Subang Jaya yesterday.

Thai said the company is expected to complete all the acquisitions after it receives the medical licence from Japan’s Health, Labour and Welfare Ministry in the fourth quarter of 2018 (4Q18).

“We expect to make inroad into the Japanese market as soon as we get our licence in 4Q18. By 2019, we will see a substantial contribution from this market,” he said, adding that further details on the acquisition will be revealed after an announcement is made on Bursa Malaysia.

Supermax, the country’s second-biggest producer of rubber gloves by volume, diversified into the contact lens business in 2014.

The company has since exported its optical products to 30 countries and is targeting more export destinations including Japan, the US, China and Europe.

Thai said the company aims to be among the top five contact lens producers in the world, with a production capacity of at least one billion within the next eight to 10 years.

“We are building our headquarters for the contact lens business three years from now, and it looks promising.

“The contact lens business is US$2.5 billion (RM10.4 billion) higher than the glove industry globally,” he said.

Supermax has allocated a capital expenditure of RM100 million for the construction of the premise.

Thai expects the contact lens segment to contribute positively to the group by the second half of 2019.

“The net contribution (for contact lens) right now is negative because we are spending money on product registration, clinical tests, market development costs, advertising and promotion, among others,” he said.

On Supermax’s primary gloves making business, Thai said the company is in the process of upgrading its production line and rebuilding its old facilities.

Such ongoing efforts are expected to boost production efficiency by the financial year 2019, with total gloves production expected to increase to 25.7 billion units from the current capacity of 23.34 billion units.

“We’ve seen improved margins in the 1Q of the current financial year. It is continually improving as efficiency heightens.

We expect our Ebidta (earnings before interest, tax, depreciation and amortisation) margins to improve every quarter from here.

“Going forward, I don’t think we will encounter any obstacles in terms of infrastructural needs,” Thai said.

Supermax’s shares ended two sen, or 0.98%, higher yesterday at RM 2.06, with 9.9 million shares changing hands. It has a market capitalisation of RM1.35 billion.