Technology to fatten Latexx profit margin

By Lynn Omar and Ooi Tee Ching
Published: 2010/05/08
Business Times

LATEXX Partners Bhd (7064) is set to see fatter profit margin next year, after securing a technology to make natural rubber gloves for medical practitioners with hypersensitive skin.

These gloves will be priced more than an ordinary pair of gloves but Latexx declined to say by how much.

Latexx's net profit margin stood at 16 per cent for 2009, which is better than its bigger rival Top Glove Corp Bhd which is below 14 per cent now.

Hartalega Holdings Bhd has the best margin at 24 per cent.
In the last decade, glovemakers produced more synthetic gloves after a small number of the developed world's doctors and nurses complained of their allergy to natural rubber and deemed it unsafe.

Basically, their skin is hypersensitive to the protein residue in natural rubber gloves.

Famous hospitals like the Johns Hopkins Hospital and Shriner's Hospital in the US went to such extent of viewing such allergic reaction as serious threats that they banned natural rubber medical devices and switched to synthetic gloves and catheters.

But the fact remains that natural rubber gloves are more comfortable to wear and far more elastic.

With this MPXX(TM) technology from Budev BV that "washes off' protein content in natural rubber", Latexx chief executive officer (CEO) Low Bok Tek anticipates some hospitals and dental clinics in North America and Europe to switch back to natural rubber gloves.

"When our clients see the MPXX technology logo, they'll know they are using virtually protein-free natural rubber gloves," said Low.

He was speaking to reporters after a briefing for analysts in Kuala Lumpur yesterday. Also present were Latexx head of corporate services Dr Liew Lai Lai and Budev CEO Michiel Paping.

"We recently imported the sample machine here to wash off the protein residue from the natural rubber gloves. Our initial estimate is to 'wash' 500 million pieces a year," said Paping.

Latexx is also hopeful of dishing out more dividends to shareholders this year on prospects of robust glove sales. The group declared dividends of 2.5 sen a share for the first quarter of this year.

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