By writer BacalahMalaysia.my
Anzo Holdings Bhd is buying a glove manufacturer and not only is the group expected to generate more than RM200 million in profits from this venture, the Bursa-listed firm will eventually get to play a big role in meeting global demand for medical gloves because of the outbreak of the Covid-19.
The world is seeing an unprecedented surge in demand because of the coronavirus pandemic and Anzo wants to be in this business as the potential for growth is long term.
Anzo, a top active stock on the local stock exchange is said to be paying about RM50 million to buy over the company. The sale includes land and assets like factory and machinaries. It is not known where the factory is located.
People who know about this deal said the current production capacity at the factory is about 100 million pieces of nitrile glove or medical gloves per annum. The value for this is said to be over RM400 million a year.
“Anzo will sell at the current market price which is doing as high as USD75 per box of 1,000 pieces.
“That is how we estimate that the profits for Anzo will be over RM200 million a year.
“Should Anzo ramp up the production to 2 billion pieces a year, naturally the profits would also double.
“Anzo is moving into glove manufacturing as the return on investment is great. This is a lucrative business to be in, especially in this current scenario like the Covid-19 pandemic.
“Anzo wants to be apart of the game, which is currently dominated by other big well known players in Malaysia,” said the person with the knowledge.
Across the world, overburdened hospitals have warned about their critical lack of resources as new coronavirus cases skyrocket.
Hospitals are looking for medical glove supply from around the world, especially Malaysia, where the top glove makers are located.
The World Health Organization has warned that one of the most urgent threats to virus containment efforts is the “chronic global shortage of personal protective equipment.” This includes products such as N95 masks, goggles, and gloves.
Meanwhile, Anzo, which recently won a RM1.3 billion contract to supply copper scrap to South Korea, via a company called CSTME Resources Sdn Bhd for a duration of 40 months is being looked at foreign funds.
They have been buying shares in Anzo recently which is why the stock has been trading at high volume.
Anzo closed 16.5 sen today, the highest level in the last three years, giving it a market capitalisation of RRM146 million. Some 54 milion shares were traded.
The stock was up 1 sen or 6.45 per cent over the previous day’s closing. – BACALAHMALAYSIA.MY