Construction player Vizione confident of glove venture

VIZIONE Holdings Bhd’s intention to venture into glove making has raised concerns that the integrated construction engineering group may be going into an increasingly crowded industry. With glove makers bumping up annual production and over a dozen new players coming onstream, the question is whether Vizione would stand a chance in the highly saturated and competitive glove market.

“I don’t foresee an oversupply situation for the next two years. New ventures going into gloves may need time to build their lines. The difference is that Vizione is acquiring an existing and operating glove factory in a time where demand will stay high for the next two years. We have to catch this wave while it lasts as it wouldn’t be the same by 2024 or 2025,” Vizione managing director Datuk Ng Aun Hooi tells The Edge.

In a Sept 2 filing with Bursa Malaysia, Vizione’s wholly-owned VIP Index Sdn Bhd inked a heads of agreement to purchase a 51% stake in SSN Medical Products Sdn Bhd for RM5 million cash. SSN manufactures both latex and nitrile medical gloves, latex condoms, as well as specialty gloves such as elbow length medical gloves. About 80% of its products are exported to China, the US and Europe.

Besides Vizione, other new players going into the glove business include Inix Technologies Holdings Bhd, AT Systematization Bhd, MSCM Holdings Bhd and Karex Bhd.

Ng explains that the acquisition, which is expected to be concluded within 90 days from Sept 2, is part of the group’s strategy to beef up its recurring income as part of its expansion plans instead of concentrating on construction projects where there is no further income once the works are completed.

SSN, on the other hand, had been targeting to list within the next two years.

With an operating capacity of 500 million gloves per annum, SSN has available space to add two more lines to produce 750 million pieces per annum but needed the necessary capital expenditure (capex) and property for its expansion plans.

“The parallels between Vizione and SSN make the tie-up beneficial for both parties,” Ng says.