AT Systematization Bhd (ATS) has signed a Letter of Intent to acquire Pearl Glove (Malaysia) Sdn Bhd. and intends to DOUBLE UP the glove production from 500 million pieces to over 1 billion!!!
That is really a mass production!
Pearl Glove will manufacture 500 million pieces of gloves over 1 year at their plant in Kedah with the contract value is RM100 million and these gloves will be sold worldwide due to demand because of the global pandemic: Covid-19.
The acquisition process has been a success, subject to due diligence, regulatory and shareholder approval.
For the information, Pearl Glove is a pioneer status Malaysian company located in Sungai Petani, Kedah. The company primarily designs, develops and manufactures industrial gloves.
Its specialty is bespoke OEM and ODM products and has been trusted by global partners for their quality, design and eco-friendly manufacturing procedures.
ATS see this move as a logical expansion in the current environment of burgeoning demand for gloves and will seek to inject further capital and expertise to manufacture medical examination nitrile gloves to boost Pearl Glove’s capacity and product suite, post its acquisition.
Accordingly, Global Market Insights have reported that industrial safety gloves alone account for a global USD5 billion market and is expected to witness a Compound Annual Growth Rate (CAGR) of seven per cent all the way to 2025, as occupational health and safety trends move towards preventive and protective measures.
Meanwhile, a recent Bloomberg commentary expects Malaysia to churn out in excess of 240 billion units of gloves this calendar year, with demand already pushing production lines to maximum capacity up till mid-2021, compared to 182 billion glove pieces in 2019. Lead times for delivery of orders have climbed from 30 days to 150 days and the demand is seemingly incessant.
The global viral pandemic, Covid-19 that has spread quickly has required immediate resources be deployed to the safety of front liners, and medical examination gloves are of paramount need. The pandemic is expected to experience a second wave as the winter months hit the northern hemisphere.
Therefore, ATS feels that by investing in a turnkey glove company and adjusting for timing to adopt new machine lines and expertise, they will be ready to supplement the requirement of continuous growth for gloves by year end 2020. Should the rise in demand be consistent, ATS will be able to participate as an OEM manufacturer of existing producers, while investing in R&D to develop its own branding and products.
With Malaysia accounting for 67% of the global market’s glove business, this acquisition will make ATS a contributory to the unprecedented boom, bringing the company to a new level.
The Board of Directors of ATS are also convinced this is the right step forward that will benefit the loyal shareholders of the Company.
Well not only the Company, it will also benefit the global gloves users too!