Estimated RM150 million to RM200 million profit on RM400 million revenue for Anzo Holdings Bhd from new glove business?
This is what is expected from Anzo's latest venture, which is to manufacture 1.2 billion pieces of medical and/or nitrile gloves a year.
But what happens if Anzo doubles the production capacity? Those numbers will change to much higher estimates.
Anzo is paying RM55 million to buy a factory that produces the medical and/or nitrile gloves in Manjung, Perak. The factory has been running for 18 years.
The group today entered into a term sheet with Wintrade World Sdn Bhd to acquire the company's assets, including land and the factory with machineries and equipment in Manjung.
Anzo today told Bursa Malaysia that the assets and its capacity is expected to generate substantial profits for the group.
So why did Anzo agree to buy Wintrade?
Very simple! The glove business is a booming business and with the Covid-19 pandemic, the demand for gloves will continue to increase. As it is, there is a shortage of gloves around the world and many hospitals and other medical healthcare centres are looking at Malaysia to supply the gloves. Even with Anzo in the glove business, demand will still exceed supply.
Anzo has the potential to double up the production lines at the factory, which is currently operating nine production lines to churn 1.2 billion pieces of the medical gloves a year.
Let's say it adds another 6 production lines, it will be able to make more than 2 billion pieces a year and subsequently its net profit and revenue will increase.
Maybe that is why there is a lot of talk in the market now that a new substantial shareholder may emerge in Anzo soon.
If you notice, Anzo shares have been trading in high volume for several weeks now. At 4pm today, some 300 million shares were traded and the stock was hovering around the 18 sen to 20 sen range, indicating that the stock is going to power up soon.
Interestingly, early this year the stock was trading below 5 sen. The strong movement shows something is really happening in Anzo and that has created a lot of interest in the stock.
Sources said there is an investor either from China or Hong Kong who has been buying up shares in Anzo in recent weeks.
Anzo should be making an announcement on this soon, that it will have a new substantial shareholder.
I wonder what plan the new substantial shareholder has for Anzo!
Anzo as it is, is already a big group on its own. Besides venturing into glove manufacturing, the timber and property group is selling copper to South Korea.
Last week Anzo secured a RM1.3 billion contract to supply millberry/candy copper scrap over 40 months indirectly to a steelmaker in South Korea.
This deal is expected to further improve its net profit and revenue.
Read Article Related: ANZO HOLDING DIVE INTO GLOVES MANUFACTURING INDUSTRY, CAPABLE PRODUCE OVER 1B PIECES