Vizione ventures into gloves with SSN Medical stake buy

by AFIQ AZIZ / pic credit: vizione.com.my

VIZIONE Holdings Bhd’s wholly owned subsidiary VIP Index Sdn Bhd (VISB) has acquired a 51% stake in SSN Medical Products Sdn Bhd (SMP) for RM5 million cash as part of its diversification into the healthcare sector.

Vizione MD Datuk Ng Aun Hooi said with the acquisition, the group is expected to triple the glove production volume from the current 500 million pieces to 1.6 billion pieces per annum within the next 18 months.

He is optimistic that the acquisition is timely to cater to the huge demand for medical gloves due to the Covid-19 pandemic.

The group is aiming to market its glove products mainly in the US and the European markets.

“This is because SMP is an established entity and has been in operation since 1997. It has a stable global client base and solid supply chain network,” Ng said at the signing of a share sale agreement between VISB and vendors of SMP held virtually yesterday.

Some 80% of SMP’s current production is exported overseas, mainly to the US, Germany, Chinaand other European countries.

“We are excited by the prospect of SMP and believe we can unlock its full potential by leveraging experienced business management, strong funding capability and strategic growth plan,” Ng said.

He said shareholders can be rest assured that the acquisition is a wise business decision and will ensure earnings for the group.

“This was done after rigorous study has been made and this would be a value-added move for the group,” he added.

According to Ng, SMP vendors have provided a pretax profit guarantee of RM15 million for the financial year ending Dec 31, 2021.

Vizione believes even with the availability of Covid-19 vaccines in the market, demand for gloves will remain robust and grow due to widespread health awareness globally.

Ng highlighted that SMP’s gloves have obtained certifications to export to markets like Europe, US, China and South Africa.

In terms of procurement agreements, the current customers will account for about half of SMP’s current and future production, with the balance reserved for spot orders which carry higher profit margins.

This way, Ng said Vizione strikes a balance between having stable orders and maximising profits for shareholders.

SMP has also successfully created a niche market by producing specialty gloves such as elbow-length latex medical gloves, gloves for gynaecology use and gloves for chemotherapy use.

Apart from serving as an original equipment manufacturer, SMP also has its own brand called Hanser.

Vizione shares closed up 0.5 sen at 43 sen yesterday, valuing the company at RM339 million.