KUALA LUMPUR (Sept 1): Crude palm kernel oil producer Green Ocean Corp Bhd is jumping on the rubber glove bandwagon as it hopes to capitalise on the burgeoning demand for gloves while making the most out of the opportunities created by the Covid-19 pandemic.
The group said it intends to commission up to 12 double former glove-dipping lines in stages over the course of 36 months, of which 12 lines are expected to yield a combined production capacity of up to two billion pieces of gloves per annum.
The venture into the glove business, via wholly-owned unit G Rubber Sdn Bhd, will provide an alternative source of income to the group's current core business, Green Ocean said in a statement.
As a start, the group intends to acquire and commission six double former glove-dipping lines, which are expected to yield a combined production capacity of up to one billion pieces of gloves per annum.
"The group intends to refurbish part of its existing factory buildings to a glove-dipping facility in order to facilitate the venture into the glove business," said Green Ocean, adding that upon completion of the refurbishment, the facility will be able to house up to 12 glove-dipping lines.
Subject to the lead time of purchase orders for the raw materials and machinery as well as the completion of the refurbished facility, the production of medical gloves is expected to commence by the first half of 2021, said Green Ocean.
As the glove business is anticipated to contribute to 25% or more of the group's net profit and net assets, the group is seeking its shareholders' approval for the diversification of its business activities to include the glove business.
Green Ocean is also proposing a private placement exercise and a renounceable rights issue with free detachable warrants exercise to fund the proposed glove business.
Shares in Green Ocean closed three sen or 8.7% higher at 37.5 sen today, valuing the group at RM119.51 million. Over the past five years, the counter has been trading below the 20 sen level, and first breached that level on July 24 to reach a peak of 43.5 sen last month.
Edited by S Kanagaraju