Supermax eyes efficiency with glove plant consolidations

KLANG, Malaysia—Supermax Corp. Bhd. is consolidating its latex glove manufacturing facilities in preparation for "inevitable" market recovery after post-pandemic consolidation.

The Malaysian group said it had shut down four plants over the past 18 months while decommissioning "some older less efficient production (lines)" at other facilities.

Meanwhile, Supermax said it is putting up the building structures for six new production units that have been built between 2020 and 2023.

According to the manufacturer, the production lines are being installed "slowly and gradually with an eye on the overall glove market."

These include a facility with the capacity of 7.92 billion pieces per year currently ready for commercial production, said Supermax in its third quarter report May 18.

Another 2.4-billion-piece capacity facility is currently "under various stages of installation," while another with 6.48 billion capacity has been put on hold, although infrastructure has been completed.

Supermax said it will redeploy workers from closed plants to its other factories, including its flagship manufacturing complex at Meru, in the Klang district, Selangor.

With the "newer high-capacity, high-efficiency lines," Supermax said it expects to see "productivity increase, per unit costs drop and overall competitiveness and profitability improve."

Meanwhile, the gloves maker said the construction of its $550 million plant in Texas is nearing completion, with production expected to start there by the final quarter of 2023.

For the three months to end of March, Supermax reported a loss before tax of $16 million, down from a profit of $4 million the year before.

Sales for the third quarter of fiscal 23 fell 56 percent to $38 million, the company said.

Despite the weak results, Supermax noted quarter-on-quarter improvements in both sales and earnings, as average selling prices "stabilized and started to gradually move up."

In addition, the group increased capacity utilization rate as demand "started to improve."

Demand, said Supermax, rose as the overstocking during the pandemic "started to deplete appreciably and some re-stocking is taking place again."

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