Supermax to strengthen operations in the US

PETALING JAYA: Supermax Corp Bhd has allocated US$8.5mil to build phase one of its national distribution headquarters in Chicago to strengthen business operations in the United States.

Phase one, comprising the East Building of the national distribution headquarters, would be operational between March and May next year, its executive chairman and group managing director Datuk Seri Stanley Thai said.

“The entire headquarters complex, when fully completed, will have about 20,900 sq m and give us room to grow further for the next five to 10 years,” he told reporters after the company’s AGM here today.

This new distribution facility would also help Supermax to enlarge its presence in North America.

Meanwhile, effective from July 1, Supermax Canada Inc would become Supermax Healthcare Canada Inc (SHCI) and would be 67%-owned by the group, Thai said.

“Therefore, starting from the third quarter this year, SHCI’s financial results would be consolidated into the group’s result,” he said.

As at December 2011, Supermax Canada was among the top three largest glove providers in the healthcare industry in the country.

In the meantime, he said, the company would probably enter the North Africa market including Libya, Algeria, Egypt and Morocco.

Thai said he expected the nitrile gloves profit margins to decline in the second half of this year due to a price war among glove makers especially from China.

Going forward, he said the profit margins for nitrile gloves would be between 11% to 13% .

“The nitrile gloves price will decrease in line with the market caused by an oversupply situation,” he said, adding China glove makers are pushing down the nitrile gloves margin. “Although their production cost is slightly higher, they still manage to sell at lower prices because they enjoy value added tax export rebates,” Thai said. – Bernama