COMFORT Gloves Bhd is not expected to face severe production cut after its wholly owned subsidiary Comfort Rubber Gloves Industries Sdn Bhd has to halt operations at its plants in Matang and Simpang (Perak) which have been placed under the enhanced movement control order (EMCO) for a two-week period beginning today (Aug 6).
In a media statement yesterday, the company’s group CEO Lau Joo Yong said the glove maker will utilise its inventory buffer, which is sufficient for at least one month, to cushion the impact from the temporary disruption to operations.
“This inventory buffer is part of our business continuity and sustainability, and is also part of our strategy to prepare for disruptive events like this,” he pointed out.
Beyond that, it is noteworthy to know that Comfort Gloves has taken its own initiative to streamline its operations with the goal of raising productivity and output in view of the anticipated demand for personal protective equipment (PPE), particularly medical gloves.
As a result, it has managed to increase its production output by circa 30% as of its financial year ended Jan 31, 2021.
“The group plans to dismantle 20 dipping lines and rebuilding 22 new dipping lines,” noted Comfort Globes in its Annual Report 2021. “The new dipping lines are capable to produce 3.9 billion gloves per annum, a 57% increase from the group’s existing capacity of 6.8 billion gloves.”
After this, the group plans to build a production facility in Bemban (in Batu Gajah, Perak). Comfort Gloves expects the completed production facility to be capable of producing up to 14.5 billion gloves per annum.
“Upon completion of the two expansion plans, the group’s total production capacity is expected to grow from 6.8 billion gloves per annum to 25.2 billion gloves per annum, a 270% increase of its current production capacity,” projected the glove maker.
Capacity aside, Comfort Glove has also found itself in a comfortable financial position – thanks to the glove stock rally during much of 2020 – even amid concerns of a decline in future average selling prices (ASP).
For its 1Q FY1/2022, Comfort Glove’s net profit jumped 1,240% year-on-year to RM219.13 mil (1Q FY1/2021: RM16.34 mil) on the back of 254% spike in revenue to RM541.24 mil (1Q FY1/2021: RM152.91 mil).
For its entire FY1/2021, Comfort Glove posted a stellar earnings of RM287.34 mil (FY1/2020: RM33.18 mil) from a revenue of RM946.45 mil (FY1/2020: RM510.74 mil).
At 3.45pm Comfort Gloves was down 4 sen or 2.16% with 3.28 million shares traded, thus valuing the company at RM1.05 bil. – Aug 6, 2021
