AE Multi eyes business turnaround through the glove route

AE Multi Holdings Bhd (AEM) is confident of achieving an accelerated business turnaround in 2021 as its new engineering, procurement, construction and commissioning (EPCC) business banks on providing turnkey solutions to the growing number of new entrants into glove manufacturing.

The EPCC segment is expected to deliver a significant order book in FY2021, thus allowing AE Multi to leap back into profitability following losses for the last three financial years since 2017.

With global demand for gloves expected to remain robust throughout 2021-2022 amid the increasing COVID-19 vaccination programmes globally, many companies have been venturing into glove manufacturing to meet the shortage in glove supply.

AEM via its wholly-owned subsidiary AE Multi Industries Sdn Bhd is capitalising on this new business opportunity by working with the new glove makers to set up their production facilities.

A filing with Bursa Malaysia today shows that AEM has won a contract from PNE PCB Bhd. This follows another contract secured by the group on Dec 2 from Fintec Global Bhd’s wholly-owned subsidiary Fintec Glove Sdn Bhd.

For perspective, AE Multi Industries was awarded a contract to design, build and deliver on a turnkey basis a glove-manufacturing factory of up to 10,000 sq metre with the capacity to house up to 14 glove-dipping lines for the manufacturing of medical grade nitrile gloves.

“Our immediate target markets are Malaysia and Thailand which are the two major markets for glove production,” AE Multi group executive director Choong Lee Aun pointed out.

“The first two contracts announced by AE Multi are just the beginning and we are in talks with other potential customers.”

Choong added the EPCC business is a strategic move by AE Multi to diversify its income stream and to enter a viable business segment that sees high demand.

“Instead of competing with the new glove manufacturers, AE Multi has decided that the EPCC business would still benefit from the global glove demand without facing much competition in the market,” he opined.

“In the future, our expertise in the EPCC business could potentially be replicated in other relevant industries.”

AE Multi began its business turnaround strategy in 2020 as it sought to strengthen its existing core business of manufacturing and selling printed circuit board and other related products while at the same time venture into new viable and value-accretive businesses.

Ultimately, the group aims to position itself as a credible dividend-play company in the future. At today’s market close, AE Multi was up 2 sen or 19.05% at 12.5 sen with 131.49 million shares traded, thus valuing the company at RM64 mil. – Jan 13, 2021

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