Supermax allocates fund for Chicago Hq

Supermax Corporation Bhd has allocated US$8.5 million to build phase
one of its national distribution headquarters in Chicago to strengthen
business operations in the United States.

Phase one, comprising
the East Building of the national distribution headquarters, will be
operational between March and May next year, its Executive Chairman and
Group Managing Director Datuk Seri Stanley Thai said.

"The
entire headquarters complex, when fully completed, will have about
20,900 sq m and give us room to grow further for the next five to 10
years," he told reporters after the company's annual general meeting in
Petaling Jaya today.

This new distribution facility would also
help Supermax to enlarge its presence in North America, where 42 per
cent of its current total production goes.

Meanwhile, effective
from July 1, Supermax Canada Inc will become Supermax Healthcare Canada
Inc. (SHCI) and will be 67 per cent owned by the group, Thai said.

"Therefore,
starting from the third quarter this year, SHCI's financial results
would be consolidated into the group's result," he said.

As at December 2011, Supermax Canada was among the top three largest glove providers in the healthcare industry in the country.

In
the meantime, he said, the company would probably enter the North
Africa market including Libya, Algeria, Egypt and Morocco in the near
future.

Thai said he expects the nitrile gloves profit margins
to decline in the second half of this year due to a price war among
glove makers especially from China.

Going forward, he said the profit margins for nitrile gloves would be between 11 per cent to 13 per cent.

"The
nitrile gloves price will decrease in line with the market caused by an
oversupply situation," he said, adding China glove makers are pushing
down the nitrile gloves margin.

"Although their production cost
is slightly higher, they still manage to sell at lower prices because
they enjoy value added tax (VAT) export rebates," Thai said.

Under
China's VAT regime, glove maker exporters are entitled to a refund of
VAT when their rubber products are exported. -- BERNAMA

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