Iconic Worldwide to start glove production in October 2021

by RAHIMI YUNUS / pic credit: ANNUAL REPORT

ICONIC Worldwide Bhd is projected to roll out its first glove production by October next year as it makes inroads into the glove-making industry.

The tourism and property developer group ED James Tan said the construction of a new manufacturing facility has started and is expected to be completed by June 2021.

He said machinery is planned for installation by October 2021, before the first phase of production comprising six assembly lines could begin.

“The first batch of gloves will be out by October 2021. The first phase is six double-former lines producing around 1.6 billion gloves from October onwards. Then, we will start the second phase, which ultimately gives a full production of 3.1 billion gloves by March 2022,” Tan said in an interview broadcast by Savwee Investment on Facebook last week.

He said the company is targeted to attain the US FDA and European Union’s CE certifications approvals for gloves before production starts in the next 12 months.

With the 3.1 billion annual production forecast, Tan said Iconic Worldwide (formerly known as Sanbumi Holdings Bhd) is expected to capture around 1% of the global market demand.

Global glove demand in 2020 is projected to be about 330 billion pieces, according to the Malaysian Rubber Glove Manufacturers Association data as presented during the interview. Of that, 64% or 211 billion gloves are being supplied by Malaysian glove companies.

In 2021, global glove demand is estimated to grow to 396 billion against the production capacity of Malaysian glove companies of 280 billion.

The world’s glove demand is expected to further expand to 475 billion in 2022 against the projected production capacity of Malaysian glovemakers of 363 billion.

Before the Covid-19 pandemic, Tan said the average selling prices of gloves were between US$3 (RM12.36) and US$4 per box or US$40 per carton. At present, he said the prices have gone up to between US$7 and US$8 for manufacturers and US$10 for retail.

He said the company has set a price target of between US$6 and US$7, and expects to achieve between a 30% and 40% net margin.

Iconic Worldwide is diversifying into the manufacturing and trading of personal protective equipment, including gloves and disposable face masks with a total investment of RM155.51 million.

Tan said the group raised about RM50 million from a private placement on the market. Meanwhile, another RM50 million would come from internally generated funds and the remaining would be through bank loans. Currently, the company can produce over 30 million face masks per annum.

Besides Iconic Worldwide, other local companies that have jumped on the bandwagon of the glove-making segment include Mah Sing Group Bhd, GPA Holdings Bhd, Salcon Bhd and AT Systematization Bhd.

Malaysia’s biggest glove companies are Top Glove Corp Bhd, with a capacity of 87 billion pieces in 2020, Hartalega Holdings Bhd (41 billion), Supermax Corp Bhd (26 billion) and Kossan Rubber Industries Bhd (32 billion).