by TMR/ pic by MUHD AMIN NAHARUL
GPA Holdings Bhd intends to make and sell rubber gloves as part of a diversification plan amid the high demand for such products due to the Covid-19 pandemic.
The company, in an exchange filing yesterday, stated it intends to buy, instal and commission up to 12 double former automated glove-dipping lines and other related facilities in stages over 24 months to manufacture rubber gloves.
“The proposed diversification allows the group to capitalise on the burgeoning demand for rubber gloves while making the most out of the opportunities created by the Covid-19 pandemic,” GPA stated in its filing yesterday.
These 12 glove-dipping lines are expected to cost about RM150 million and will be set up at its existing facility in Meru, Klang, Selangor. The installed capacity can produce up to 3.6 billion pieces of gloves per annum.
Once installed, the production is expected to commence by the second half of 2021, the automotive battery and related components maker noted in its exchange filing yesterday.
The company targets to export its production to markets like the US.
To fund the new venture, GPA has proposed a private placement of 294.15 million new ordinary shares, representing 30% of the total number of issued GPA shares to Datuk Ong Choo Meng, Ang Lin Chu, Lim Poh Yit and Datuk Tee Tiam Hock at an issue price of 17.56 sen per placement share for a total sum of RM51.65 million.
GPA will also establish an employees’ share options scheme (ESOS) involving up to 15% of the total number of issued shares for eligible directors and employees of the group, it stated. The price of the ESOS shares and usage will be determined later.
GPA proposed plan is among the similar investments into rubber glove-making business announced by companies like AT Systematization Bhd, CE Technology Bhd and Inix Technologies Bhd over the past month or so.
GPA shares closed 4.5 sen or 21% higher at 25.5 sen yesterday, giving it a market capitalisation of RM250 million.