Nitrile glove manufacturer with operations in Malaysia, VIP Gloves Limited (ASX:VIP), has entered into a Heads of Agreement (HOA) with Julian Foo Kuan Lin, major shareholder of Ammorium Resources Sdn Bhd acquire 100% equity interest in Ammorium.
Ammorium, incorporated in Malaysia in 2015 holds a 10-year tax-exempt status and is fully licensed to commence glove manufacturing operations.
The proposed acquisition of Ammorium, which is subject to due diligence, will allow VIP to oversee the construction of the 60-lines double-former medical examination glove integrated facility on 53 acres of land in Tronoh, Perak, Malaysia.
Each line is expected to have a capacity of 15 million pieces of gloves per month or a total of 900 million pieces per month and an annual production of over 10.8 billion gloves.
If successful, the acquisition of Ammorium will expand glove production to an expected total annual output capacity of 13.46 billion pieces when all lines are fully commissioned; in conjunction with the annual production capacity of 1.6 billion pieces of gloves from current production lines and the proposed eight production lines following construction of a second factory at Semenyih, Selangor, expected to be fully operational in 2023.
Malaysia, which supplies around two-thirds of the world’s rubber gloves, recorded RM 52.7 billion worth of glove exports in 2020.