SYDNEY: VIP Gloves Limited planned to construct a new production facility to increase its glove production operations. VIP Gloves plans to build up to ten double-former lines with annual production capacity of estimated 2.5 billion pieces of gloves per annum.
The new facility will be built on land owned by the Company’s 100% subsidiary KLE Products Sdn Bhd. The land is located adjacent to the current glove manufacturing operations at Beranang Industrial Park, on the outskirt of Kuala Lumpur.
The Company has initiated soil and land survey investigations and construction is expected to commence early 2021.
Initial estimates put total development costs at circa A$25 to A$30 million, to be funded by proceeds from the disposal of the existing land and building and internally generated funds. VIP Gloves will consider additional funding options if necessary.
VIP’s existing factory currently holds 2 double-former lines and 2 single-former lines with a total capacity of 620 million pieces p.a.
As reported on 30 October 2020, a further four single-former lines are being installed progressively by mid-2021 and will increase production capacity to an estimated 1 billion pieces of gloves per annum when all lines are operating at full capacity.
Together with the proposed new production facility on the adjacent land, VIP’s total annual capacity would rise to 3.5 billion pieces.
Commenting on the upcoming expansion plans, Executive Director Mr WM Chen said; “We are very excited to begin the next phase of the company’s journey. The expansion of the new factory will increase our production numbers significantly to meet growing demand for VIP’s product. With the market for nitrile gloves staying buoyant, we envisage strong and continued revenue growth.”
VIP Gloves Limited (VIP) is an Australian public company whose securities are listed for quotation on the Australian Securities Exchange (ASX code: VIP). VIP’s Malaysian subsidiary companies manufacture nitrile disposable gloves from a plant located in Selangor, Malaysia. Nitrile gloves can be used in the medical, health, dental and numerous other industrial and commercial sectors. VIP currently produces and supplies gloves on an original equipment manufacturer (OEM) basis.