VIP Gloves Ltd (ASX:VIP) is planning to construct a new production facility in the outskirts of Kuala Lumpur in Malaysia to increase the production of gloves.
The company proposes to build up to ten double-former lines with an annual production capacity of about 2.5 billion pieces of gloves.
The new factory will have a total 8,000 square meters of space including manufacturing space, warehouse, storage facilities and other amenities.
“Excited to begin the next phase”
VIP executive director WM Chen said: “We are very excited to begin the next phase of the company’s journey.
“The expansion of the new factory will increase our production numbers significantly to meet the growing demand for VIP’s product.
“With the market for nitrile gloves staying buoyant, we envisage strong and continued revenue growth.”
The proposed plant
The new facility will be built on 3.26 acres of land and owned by the company’s 100% subsidiary KLE Products Sdn Bhd.
The land is adjacent to the current glove manufacturing operations at Beranang Industrial Park, on the outskirt of Kuala Lumpur.
VIP has initiated soil and land survey investigations and construction is expected to begin in early 2021.
As per initial estimates, the cost of setting up of the factory is about $25 to $30million, to be funded by proceeds from the disposal of the existing land and building and internally generated funds.
Doubling capacity
VIP’s existing factory currently holds 2 double-former lines and 2 single-former lines with a total capacity of 620 million pieces per annum.
A further four single-former lines are being installed progressively by mid-2021 and will increase production capacity to an estimated 1 billion pieces of gloves per annum when all lines are operating at full capacity.
Together with the proposed new production facility on the adjacent land, VIP’s total annual capacity would rise to 3.5 billion pieces.