Latexx bounces back

Saturday May 23, 2009
Latexx bounces back
By C.S. TAN


TAIPING-based Latexx Partners Bhd was the first rubber glove manufacturer to be listed on Bursa Malaysia, but it had to muddle through several years of heavy losses that resulted in it being overtaken by rivals that were listed later.

It was held back by losses for five years, between 2000 and 2004 by which time, its net tangible assets had shrunk to just 19 sen a share.

Small wonder that investors still remember the company for its difficult years even though it has erased the accumulated losses. The years of losses coincided with the time when Low Bok Tek, who was managing director for 14 years between 1987 and 2001, left the company.

Low would not say why he left. At that time, there were eight brothers, including Low, in the company, and it was probably difficult for so many to agree on any matter. This might have been difficult for Low who, as the CEO, was not the eldest. He is number six among the brothers.

Latexx’s losses between 2000 and 2004 were sizeable, from RM41.5mil in 2000, about RM20mil each in 2001 and 2002, RM13mil in 2003 and RM700,000 in 2004.

Cumulatively, these losses bled Latexx which was then still a small company.

Resulting from the losses, Latexx lacked working capital to do business. Hence, Latexx was operating at only about 20% of its plant capacity when Low returned to the company in 2004 after working out an agreement with his brothers that he would take over.

Low then set about to improve manufacturing operations, and put some money into company. He then talked to the banks about credit lines, and to restructure the heavy borrowings. “Otherwise, we won’t be able to expand,” he told StarBizWeek.

A debt restructuring exercise, after some initial difficulties, was eventually worked out with creditor bankers. Stemming from that, RM51mil of debts were converted into new Latexx shares with free warrants.

Following that, Citibank Bhd owned 15.4% of Latexx, as well as warrants in 2007 when it took the stocks in settlement of debts. It ceased to be a substantial shareholder a month later.

Low said he bought a substantial position in Latexx from his brothers and the creditor banks. He currently owns direct and deemed interests of 30.3% in the company.

Over time, he managed to persuade glove buyers, suppliers and former management staffers to return. “They came back after they saw our finances improving,” he said. Bankers also returned, agreeing to credit facilities.

“Now, I have cash,” he said, adding that the company is operating comfortably with RM20.5mil cash, against borrowings of RM48.8mil.

That’s a net debt-to-equity ratio of just 22%, one of the lowest in the industry.

With the company back in the black, cashflow generated and borrowings will enable Latexx to reclaim a position higher up the industry ranks in terms of size and profitability. The company earned a net profit of RM15.6mil last year, and RM9.1mil in the first quarter (Q1) this year. It could potentially earn RM36mil, annualising from Q1, or more this year.

Low said the current plant capacity of 4.4 billion pieces of gloves a year would progressively increase to six billion pieces by the end of the year. “Every month the production increases, I see my unit costs coming down,” he added.

The unknown factors in the industry are US dollar weakness and higher latex prices which cut into profit margins if they move too sharply.

All of Latexx’s five plants are located on a single piece of land in Taiping, and a sixth plant being built on adjacent land will increase total plant capacity to 7.5 billion pieces next year and nine billion in 2010.

One of the biggest employers in Taiping, Latexx’s recovery is an asset to the local community and its shareholders.


http://biz.thestar.com.my/news/story.asp?file=/2009/5/23/business/3959883&sec=business


-----

Latexx’s 1Q profit up, to install 8 new lines
Written by Yantoultra Ngui Yichen
Thursday, 07 May 2009 14:35

KUALA LUMPUR: Latexx Partners Bhd’s net profit for its first quarter ended March 31, 2009 (1Q09) surged to RM9.14 million from RM1.13 million a year earlier, mainly due to better margins from a change in product mix with sales of more premium gloves.

In notes accompanying its financial statement yesterday, the rubber glove maker also attributed the stronger performance to an improvement in overall cost savings from economies of scale, lower latex and crude oil prices, and favourable US dollar exchange rate.

Revenue rose 47% to RM70.3 million in 1QFY09 from RM47.8 million a year earlier, while earnings per share jumped to 4.7 sen from 0.58 sen. No dividend was declared.

Moving forward, Latexx said it targeted to install eight new double formers glove production lines and continue to upgrade its existing glove production to meet market demand.

“The eight new double formers glove production lines are targeted to be completed in 2009,” it said. “With the additional lines, the group projected total annual output to increase from four billion pieces to six billion pieces.”The company expected strong demand from the healthcare sector despite the current economic slowdown.

Latexx also expected to benefit from lower prices of latex concentrate and crude oil, and favourable exchange rate.



This article appeared in The Edge Financial Daily, May 7, 2009.


----

Friday February 27, 2009
Latexx to raise glove output
By DAVID TAN

KAMUNTING: Latexx Partners Bhd is allocating RM70mil next year to increase its production of latex and nitrile gloves to nine billion in 2011.

Group managing director Low Bok Tek told StarBiz that although the global economy had entered a recession, demand for the group’s medical gloves was still strong.

“Sales of our powder-free latex and nitrile gloves in January had also improved significantly over the previous corresponding period.

“This is why we expect the first quarter ending March 31 to chart better performance than the comparable quarter last year,” he said.

For this year, the group will install 16 more production lines, which would increase its production to six billion gloves a year from four billion currently.

“Next year, we will spend another RM70mil for our sixth facility in the Kamunting Industrial Estate (in Taiping).

“The plant is scheduled for completion in 2011 and will raise our annual production to nine billion pieces a year. It will also create over 2,000 jobs in Kamunting,” he said.

Low said the global economic crisis had affected the group’s sales to the food and beverage sector. “However, sales from the food and beverage, and general industry segments are less than 10% (of total revenue),” he said.

Low said the stronger US currency was favourable to the group’s financial position as it traded in US dollars.

Listed on Bursa Malaysia second board in 1996, Latexx Partners operates from a 20ha site in Kamunting Industrial Estate.

For the year ended Dec 31, the group posted a pre-tax profit of RM15.5mil on revenue of RM223mil compared with RM4.9mil and RM150mil respectively in 2007.


----


24th Sept 2008

Latexx set for better quarter
By DAVID TAN

New facility will contribute to revenue in third quarter

GEORGE TOWN: Glove maker Latexx Partners Bhd expects a strong performance in its third quarter ending Sept 30, due to contribution from its latest facility in the Kamunting Industrial Estate.

Group chairman Low Bok Tek said the quarter should perform better than the previous corresponding period because the new plant, which started operations in July, had started contributing to the group’s turnover.

“We invested about RM70mil in the new facility, which is equipped with 26 production lines. The new plant is expected to gradually raise the annual production of our group to 6 billion pieces of gloves by the end of next year from the current annual output of 3.3 billion,” he told StarBiz.

Low said the group had also received orders from customers in new markets such as China and South America.

By 2012, the group planned to increase its total annual output to 12 billion pieces of latex gloves.

“We will achieve this figure after we have installed two more production plants in the Kamunting Industrial Estate between 2010 and 2012. This will make us a leading latex glove producer in the country and the region.

“We will be able to achieve economies of scale, as all our production facilities are concentrated in one single location,” he said, adding that this would give Latexx a key competitive edge as it would be able to cut cost on transportation and administration costs.

The global consumption of latex gloves was estimated at 130 billion pieces this year, he said.

“Next year, the growth in consumption is expected at 10% to 12%. Malaysia is among the world’s largest exporter of latex gloves. It supplies 60% to the world market.”

----

Monday October 8, 2007

Glove maker will not relocate to China

LATEXX Partners Bhd, one of the top five glove makers in the country, will not relocate to China, as its cost of production in Kamunting Industrial Estate is lower.

“Costs such as labour, transportation and utilities are lower here than in China. In fact, the cost of labour in China is no longer competitive,” group chairman Low Bok Tek said.

He said Latexx found that focusing its manufacturing activities at one site helped reduce operating and production costs.

“Prior to the Asian financial crisis, we used to have manufacturing operations in Thailand and Indonesia. We had to shut them at the peak of the crisis.

“We then learned that it was more cost effective to operate in one location, as that enabled us to control the quality of our products better,” Low said.

He noted that in Kamunting, the company was also closer to its source of raw material, natural rubber, which comes from Southern Thailand.

Low said the latex glove business was a volume game.

“Enlarging the capacity of production reduces production costs and increases profit margin. This is why we want to be consolidated in one location – so that we can increase output more effectively,” he added.

Low said Latexx was now designing a new range of latex gloves.

“We are designing surgical and high-risk gloves for use in public safety units such as the fire and rescue department and we hope to introduce them in 2008,” he said, adding that previously, the company concentrated only on producing examination gloves.

Low said the selling price of latex gloves fluctuated in tandem with the price of rubber. “If the price of natural rubber increases, we will pass the cost hike to our customers. If the price of natural rubber drops, the selling price of latex gloves drops correspondingly,” he said.

The price of natural rubber is about RM5 per kg, compared with about RM6.80 per kg last year.

“At RM5 per kg, the price is still on the high side. We expect it to come down a little,” he said.

Originally known as Sin Super Holdings Sdn Bhd in 1982, the company changed its name in 1989 to Taiping Super Holdings Sdn Bhd. It became known as Latexx Partners Bhd when it was listed on the second board in 1996.

The company specialises in producing latex-powdered examination gloves, latex powder-free examination gloves and nitrile powder-free examination gloves.

Latexx Partners is the original equipment manufacturer for international brands such as Cardinal Health, Ansell and Kimberly-Clark.

It also manufactures latex gloves under its own brands of Medtexx, Black Dragon and Palmflex.

-----

Monday October 8, 2007

Latexx seeks bigger presence globally

By DAVID TAN

LATEXX Partners Bhd aims to increase its share in the global latex glove market to 7% over the next three to five years from the present 2.5%.

Group chairman and chief executive officer Low Bok Tek told StarBiz that the company would need to penetrate China and South America to achieve this target.

“To prepare ourselves for these markets, we are investing RM100mil to build two more plants on our 20ha site in Kamunting Industrial Estate, Taiping.

“These plants, scheduled to begin operations in 2010, will increase the group's annual production capacity to eight billion pieces of latex gloves from the present three billion,” he said.

The existing four plants in Kamunting Industrial Estate employ some 1,000 workers. The group's workforce is expected to rise to about 4,000 when the new plants are ready in 2010. The number of production lines will also increase to 68 from the present 32.

“Beyond 2010, we have plans to build two more manufacturing facilities to boost the annual capacity from eight billion pieces to 12 billion,” he added.

Loh said Latexx's strategy was to participate in exhibitions such as the China International Medical Equipment Fair; HOSPITALAR International Fair of Products, Equipment, Services, and Technology for Health Clinics and Laboratories in Brazil; and Medica World Forum for Medicine International Trade Fair Congress in Dusseldorf.

“The global consumption of latex gloves is around 120 billion pieces per annum. The annual growth globally is between 10% and 12%,” he said.

According to him, the growth in demand comes from the consumption of powder-free medical gloves in the US and Europe.

“The contribution of Asia-Pacific sales to the group's revenue is about 10% presently, and we aim to increase this to 20% over the next three years,” he added.

Low said Latexx's sales were strongest in the US, which contributed about 60% of its revenue. The European market accounts for 16% and South America 7%.

In 2006, the company made a net profit of RM3.9mil on the back of RM141mil in revenue, compared with RM4.2mil and RM127mil respectively in 2005.

Low said the net profit dropped because of lower profit margins.

Latexx reduced its gearing significantly in June. “The group has settled 97.7% of its bank borrowings of RM51mil under a settlement exercise,” he said.

Low added that after the debt settlement, the gearing ratio went down to 0.01 times from 1.08 times.

“The savings on interest is estimated to be about RM4mil per year. We are now on a much stronger footing to embark on expansion and increase our global market share.

“We will continue with efforts to manage costs, increase production and improve productivity,” he said.


-----

Latexx to expand production
By Ooi Tee Ching
bt@nstp.com.my

August 20 2007

RUBBER glovemaker Latexx Partners Bhd will invest RM100 million within the next five years to boost annual output to 12 billion pieces from 3.3 billion at present.

"Having settled old debts with the banks, we're now ready to expand again. We'll start with RM8 million investment in October to add three more lines," said chairman and chief executive officer Low Bok Tek.

Latexx settled old debts totalling RM36.12 million with HSBC Bank Malaysia Bhd, Standard Chartered Bank Malaysia Bhd and OCBC Bank (Malaysia) Bhd during December 2006 to April this year via issuance of new shares and warrants.

"Before the 1997/98 financial crises, we had factories in Thailand and Indonesia. However, when it swept across the region, we had to scale back," he told Business Times in an interview at the group's factory in Kamunting, Perak. Also present was Latexx director Gan Chong Shyan.

Currently, the second board-listed glovemaker has 32 production lines and employs 1,000 workers, the majority being foreigners.

"Looking back at the years when we expanded overseas, we found it better to operate from a single location. We can have more effective control over the quality of the gloves. Therefore, since last year, we've been buying adjacent plots. Now our industrial landbank has risen to 20ha," Low said.

"Rubber gloves are a volume game. We need to expand to reap the economies of scale and fatten our profit margin," he said.

While Latexx Partners contract manufactures for global names like Cardinal Health, Ansell and Kimberly-Clark, it also sells under its own brands namely Medtexx, Palmflex and Black Dragon.

At the turn of the century, Latexx Partners went through a period of leadership uncertainty but the group's direction became clearer in 2004 when Low bought up his brothers' shares in the company.

Asked on Multi-Purpose Holdings Bhd emerging as the single biggest shareholder in Latexx Partners Bhd two months ago and selling that stake the very next day, Low explained that on June 14 Multi-Purpose's stockbroking arm AA Anthony Securities Sdn Bhd bought 32 per cent stake in Latexx from HSBC Bank Malaysia and it sold the stake to a group of investors the next day.

He said the individual shareholders are his friends and they still own Latexx shares today.

"I still hold about 20 per cent in Latexx. We're all friendly parties, and the business direction of Latexx remains the same," he said.

"This year, we're confident of concluding a third year of profit since Latexx restructuring in 2004," Low said.

Last year, the group achieved RM3.94 million profit on RM141.01 million revenue. In 2005, it made RM4.28 million profit on RM127.64 million revenue. This was a significant turnaround from 2004's net loss of RM668,364 on RM60.47 million revenue.


-----

MPHB sells Latexx shares

June 15 2007

MULTI-PURPOSE Holdings Bhd (MPHB) has sold a big block of shares in rubber glove maker Latexx Partners Bhd, just a day after it bought the shares at a massive discount.

It sold the 32.3 per cent stake at a slightly higher price of RM21.68 million, giving it a gain of about RM320,000.

This was done by MPHB's stockbroking unit, AA Anthony Securities Sdn Bhd, and the deals are said to be in the normal course of business.

Meanwhile, new shareholders have emerged in Latexx while an existing investor has raised his stake.

Teong Lian Aik, based in Taiping, bought 14.85 per cent stake, or 28.5 million shares, yesterday through a direct business transaction.

Existing shareholder Low Bok Tek, who has about 5 per cent stake in Latexx, has raised his shareholding to over 20 per cent. He now has a direct and indirect stake of 38.94 million shares.

Low is also the chairman of Gunung Capital Bhd, the company formerly known as Taiping Super Bhd.

Last year, Gunung Capital sold off its coach building business, tour and travel business as well as its express bus business so that it can focus on its latex concentrate trading business.

Shares of Latexx were down 5.6 per cent, or seven sen, to RM1.17 yesterday while MPHB closed 0.4 per cent up to RM2.37.

------

MPHB takes the wheel at Latexx

June 14 2007

MULTI-PURPOSE Holdings Bhd (MPHB) has become the single biggest shareholder of rubber glovemaker Latexx Partners Bhd after it bought a 32.3 per cent stake at a jaw-dropping price.

MPHB, a diversified group which controls gaming firm Magnum Corp Bhd, did not say why it bought Latexx.

It also did not say who was the seller.

MPHB bought 62.83 million Latexx shares for RM21.36 million or 34 sen each, in a direct business deal. At 34 sen a share, it is 70 per cent lower than Latexx's closing price of RM1.24 yesterday.

It will fund the purchase with internal funds and borrowings, it said in a statement to Bursa Malaysia yesterday.

Meanwhile, in a separate statement, Citibank Bhd has emerged as a substantial shareholder of Latexx with 29.97 million shares or 15.4 per cent. The shares were issued to Citibank to settle debts owed by Latexx.

-----

09-04-2007: Latexx settles RM4.69m debt with StanChart, OCBC

Latexx Partners Bhd has entered into agreements with Standard Chartered Bank Malaysia Bhd and OCBC Bank (Malaysia) Bhd for the settlement of RM4.69 million debts in new shares and warrants.

In a statement on April 9, Latexx said it would issue 3.97 million shares of 50 sen apiece and 2.83 million warrants to StanChart to settle its borrowings of RM1.98 million.

For OCBC, Latexx would issue 5.43 million shares and 3.88 million warrants to settle its debt of RM2.71 million with the bank

-----

23-03-2007: Latexx settles RM14.9m debt via new shares

Latexx Partners Bhd will settle its debt of RM14.98 million owed to Citibank Bhd by issuing new shares with warrants.

Latyexx and its subsidiary, Latexx Manufacturing Sdn Bhd, had entered into a debt settlement with Citibank on March 21.

It said on March 23 under the RM14.98 million debt settlement, it would issue 29.97 million new Latexx shares of 50 sen each with 21.41 million free detachable warrants on the basis of five warrants for every seven new Latexx shares issued.

Latexx share price closed one sen higher to 54 sen on March 23.


-------

Low said the latex glove business was a volume game.

“Enlarging the capacity of production reduces production costs and increases profit margin. This is why we want to be consolidated in one location – so that we can increase output more effectively,” he added.


-----

January 20, 2009
Latexx Manufacturing Sdn Bhd
Filed under: Medical Company — Tags: Malaysia, Manufacturers, OEM — admin @ 4:35 am

PT 5054 Jalan Perusahaan 3, Kamunting Industrial Estate
34600 Kammunting, Perak
Malaysia

Phone: +605 8911111
Fax: +605 8911088
http://www.latexx.com.my
marketing@latexx.com.my

Manufacturers
OEM

Company Figures
Number of employees 1000-4999
Export content > 75%
Year of foundation 1988
Area of business Commodities and Consumer Goods for Surgeries and Hospitals

Company Profile

About us

Latexx Manufacturing Sdn Bhd (Latexx) is a wholly owned subsidiary of Latexx Partners Berhad. Latexx Partners Berhad is a public listed company on the Bursa Malaysia (Formally known as Kuala Lumpur Stock Exchange).
Latexx manufacturing facilities located in Kamunting Industrial Estate, northern of Peninsular Malaysia, with close proximity to Penang Seaport and Penang International Airport.
Latexx is one of the largest disposable examination gloves producers in Malaysia. Latexx started its production in 1988, and as of today, Latexx 4 plants housed with 35 production lines, producing 3.3 billion pieces of gloves annually, are built within the 20 hectares land, with sufficient land bank for future expansion.
Latexx is now on the expansion path, looking at between 25% to 35% yearly increase in production capacity for the next 3 to 5 years, producing up to 12 billion pieces annually in single location when the expansion is fully completed.
Latexx range of products includes ambidextrous pre-powdered latex examination gloves, powder-free latex examination gloves, powder-free nitrile examination gloves, controlled environment powder-free latex gloves, high risk gloves, and hand specified powdered latex surgical gloves.
Latexx philosophy is to be the best business partners to all customers with emphasis of excellent quality products, competitive pricing and excellent services. Continuous R & D efforts, working together with customers to meet their expectations have proven to be the success factors of Latexx to stay as chosen partners by major multi-national companies, exporting to various countries worldwide.
Latexx commitment to quality has gained many accreditations and certifications as follows:

ISO 9001 : 2000 (Awarded by TUV Management service GmbH, Germany)
ISO 13485 : 2003 and ISO 9001:2000 (Accredited by Standards council of Canada) for CMDCAS Awarded by TUV America Inc.
EN ISO 13485 : 2003 (Awarded by TUV product Service GmbH, Germany)
MS ISO 9001 : 2000 Quality System Registration Certificate
(Awarded by SIRIM QAS International Sdn Bhd)
Standard Malaysian Glove Scheme
(Awarded by the Malaysian Rubber Board for Pre-Powdered Latex Gloves)
Standard Malaysian Glove Scheme
(Awarded by the Malaysian Rubber Board for Powder-free latex Gloves)
Latexx place supreme emphasis on quality at every stage of production, in the choice of raw materials and high-grade chemicals. Latexx manufacturing facilities meeting Quality System Regulation (QSR) and United States FDA requirements, with respective 510(K) available for each product currently manufactured, also, compliance to Canadian Medical Devices Regulations (CMDR), and licenced by Health Canada, as well as listed in the Australian Register of Therapeutic Goods (ARTG). The Certifications obtained of ISO 9001:2000, EN ISO 13485:2003 and ISO 13485:2003 with SCC Accreditation serve to re-affirm this status.

Latexx is ready to face the challenges with innovative technology, effective quality management, upgrading of automation and a good management team. The commitment and aspiration will bring Latexx to be the largest disposable examination gloves producer in the northern manufacturing corridor of Malaysia and one of the major producers in the world.

http://www.wordpublish.org/latexx-manufacturing-sdn-bhd.htm





RPT:

http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a6bf/e0f77acaa0ee78f1482575c400173f49/$FILE/LATEXX-Circular.pdf



Fundamentals:

http://www.ooinvest.com/stock/funda.aspx?symbol=LATEXX