Su­per­max aims to main­tain profit mar­gin

> Higher con­tri­bu­tions from dis­tri­bu­tion hubs, im­proved man­u­fac­tur­ing ef­fi­cien­cies will help

The Sun (Malaysia) - - SUNBIZ - BY LEE WENG KHUEN

KUALA LUMPUR: Glove man­u­fac­turer Su­per­max Corp Bhd is look­ing to main­tain its profit mar­gin at 9% to 11%, which is in line with the in­dus­try’s av­er­age de­spite the ma­tur­ing glove mar­ket.

“Go­ing for­ward, the con­tri­bu­tion from the dis­tri­bu­tion cen­tres will be higher and it will play a role in con­tribut­ing to our bot­tom line. This is in ad­di­tion to the up­grade of older plants to im­prove man­u­fac­tur­ing ef­fi­ciency,” man­ag­ing di­rec­tor Datuk Seri Stan­ley Thai ( pix) told a press con­fer­ence af­ter the group’s AGM here yes­ter­day.

Su­per­max’s net profit fell 72.6% to RM6.79 mil­lion for the three months ended June 30, 2016 com­pared with RM24.74 mil­lion pre­vi­ously, mainly due to a one-off tax in­curred in re­spect of prior year as­sess­ments. Its 18-month net profit came in at RM153.39 mil­lion.

While a weaker ring­git could help boost earn­ings of ex­port-ori­ented firms like Su­per­max, Thai said, fun­da­men­tal to its sus­tained profit mar­gins plan will be ris­ing mar­ket de­mand and im­proved op­er­a­tional ef­fi­ciency.

“Our prod­ucts are med­i­cal gloves, and the de­mand is in­creas­ing.The cur­rency is just one fac­tor. We’ve to be com­pet­i­tive. We look in­ter­nally and up­grade the old plants and tech­nol­ogy.

“We’re not in the busi­ness of cur­rency hedg­ing but we mon­i­tor very closely what goes on in the cur­rency mar­ket be­cause our re­ceiv­ables are in for­eign cur­ren­cies. But we would like to see a sta­ble cur­rency sit­u­a­tion in the long term to strate­gi­cally plan for the long term,” he said.

Cur­rently, Su­per­max has 11 glove man­u­fac­tur­ing plants in Malaysia. Its cash and cash equiv­a­lent stood at RM116.14 mil­lion as at June 30, 2016.

On the group’s ven­ture into the con­tact lens man­u­fac­tur­ing busi­ness, Thai fore­sees big­ger con­tri­bu­tion from markets like Ja­pan and the US.

Su­per­max has started sell­ing its con­tact lens prod­ucts in North Asia through its of­fice in Hong Kong, with plans to in­tro­duce them to Malaysia only in 2018 as it is not seen as a pri­or­ity mar­ket for the group.

“We’re ap­ply­ing for Med­i­cal De­vice Au­thor­ity ap­proval in Malaysia; we should be able to get it in the next two to three months,” Thai said.

Malaysia’s con­tact lens busi­ness is worth some RM350 mil­lion at the whole­sale level, ac­cord­ing to

Thai. Mean­while, Thai be­lieves the in­com­ing Trump pres­i­dency, which vows to cut cor­po­rate taxes, will bode well for Su­per­max if it sets up a con­tact lens plant in the US. “We’re pre­pared to en­ter the US mar­ket. If they im­ple­ment what they had pledged dur­ing the elec­tion cam­paign, that is, re­duc­ing the cor­po­rate tax from 39% to 15%, then it will ben­e­fit us as a for­eign in­vestor,” he said.

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