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SUPERMAX Corp Bhd (7106), the world’s second largest rubber glove maker, expects to rake in an additional RM300 million in revenue this year, to surpass the RM1 billion mark.

Executive chairman and group managing director Datuk Seri Stanley Thai Kim Sim said the company hopes to register an annual growth of up to 33 per cent, both in terms of profit and revenue this year and 2011 due to the strong demand for its products.

“We are experiencing strong demand today. For this year, we are bullish, outperforming our earnings guidance,” he said after International Trade and Industry Minister Datuk Seri Mustapa Mohamed’s visit to Supermax plant in Sungai Buloh, Selangor, yesterday.

The company’s order backlog stood at four to five months as at December last year.

Demand at organic growth alone stands at between 8 and 10 per cent per year. “Thus, if you can see the organic growth itself, this year’s demand and consumption of our products should increase by an additional 10 billion gloves a year.

“So demand will still be stronger than the additional supply put in the market and we don’t see any supply glut for the industry in the next two years,” Thai said.

Last year, Supermax posted RM814.8 million revenue, up from RM811.8 million in the previous year. It chalked a significant jump in net profit to RM129.8 million against RM46.9 million a year ago.

Thai said Supermax is confident of achieving better first-quarter results for this year, which it will release on Monday.

On its expansion plan, he said 16 production lines will be built at its new plant in Meru, Klang, which has the capacity of producing 2.3 billion pieces of gloves.

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CIMB Investment Bank Bhd said in an announcement on behalf of Supermax that the proposed bonus issue would entail the issuance of 71.4 million shares of 50 sen each to shareholders on a date to be determined by the board of directors.

It said the rationale behind the bonus issue was to increase the capital base of the company to a level which would better reflect the current scale of operations as well as enable shareholders to have increased equity participation through greater number of shares.

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Supermax Corp Bhd, the world’s second largest rubber gloves manufacturer, does not plan to make acquisitions this year and will instead focus on organic growth, said group managing director Datuk Seri Stanley Thai.

The company prefers to conserve cash and repay loans under the current downbeat economic conditions, he said.

“It makes no economic sense to expand at this time,” he told a media briefing yesterday.

He said the company would also defer, to 2010, initial plans to install 12 new lines in its Meru plant that were valued at RM24mil.

However, the company would continue to upgrade and expand its current production output, he said.

“We hope to increase its total installed capacity to 16,204 million by 2010 from 14,476 million last year,” Thai said.

With the introduction of a 8% export rebate by the Chinese government in last year, Supermax plans to lower its nitrile gloves production this year due to the highly competitive business environment.

However, it will increase production of natural and latex rubber gloves due to an anticipated rise in demand for these type of gloves.

Thai said the Malaysian government should consider introducing a similar tax rebate of 7.5% to 8% in line with China’s move.

On profit growth this year, Thai said Supermax “hopes to maintain growth at last year’s” level.

Meanwhile, the company expects average monthly savings of RM1.7mil from the recent electricity tariff cut, of which 20% to 30% will be passed on to consumers.

Supermax had also decided to stop further investments in 14.09% associate APL Industries Bhd that had caused equity losses to Supermax since 2005, he added.

For the long term, the company hoped to execute a project called Glove City that will see the integration of its plants in one central location.

“We plan to start our Glove City in 2011 and expect to complete it within 10 years,” Thai said, adding that its total installed production capacity would double upon the project’s completion.

On concerns over funding for its projects due to its high gearing ratio, he said Supermax would make loan repayments of RM30mil every year and expected to complete payment of its last tranche of bonds in 2012. – The Star

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