by BERNAMA / graphic by TMR
INIX Technologies Holdings Bhd is acquiring a 51% stake in distribution company World Gloves International Group Sdn Bhd (WGI), in a move to further support its foray into the lucrative glove market.
ED Siva Kumar Kalugasalam said the move will complement a recent exercise to acquire a 51% equity interest in L&S Gloves Sdn Bhd, together with the existing factory inclusive of two existing rubber glove production lines.
Inix plans to expand the factory’s production up to 14 lines in the next one-year plus. It estimates that the total investment into the expansion will be worth no less than RM50 million.
He said the ACE Market-listed company sees a synergy between WGI and L&S Gloves, allowing it to market and promote its own gloves to become an international glove supplier and not depend on third-party suppliers.
“In that way, whatever supply WGI is doing right now, we expect it to increase by two or three times in the short-term period,” he said after a memorandum of agreement was sealed with WGI yesterday.
WGI currently distributes one million boxes of nitrile and latex gloves to the US, Europe, the Middle East, India, Japan and South Korea.
“This means, we are completing our supply chain already. We’ve got our own factories producing the gloves. Of course, the current factory only produces rubber gloves and all that.
“So, the supply of rubber gloves will come from our factories, whereas all of the other quality gloves, we still have to source from third parties until the expansion plan of our factories for nitrile or other products is executed,” he explained.
In addition, he believes that the new investment in WGI will improve margin for its glove business and make a positive contribution to the group’s future profitability.
Vice-chairman Datuk Tan Choon Hwa said Inix will pay for the acquisition in cash and issuing new shares.
“More details of the acquisition will be announced in the near future,” Tan added.
Meanwhile, newly appointed chairman Tan Sri Syed Mohd Yusof Syed Nasir hopes the marriage between Inix and WGI will be a meaningful investment to the company.
“The Covid-19 pandemic has caused a significant increase in global glove demand. Entering the glove industry can not only create sustained and stable profits for the company, but also help all mankind fight the pandemic,” he said.
Syed Mohd Yusof was appointed chairman yesterday to succeed former IGP Tan Sri Mohamad Fuzi Harun, who resigned from his role as Inix independent and non-executive chairman, five days after his appointment.