Supermax bullish on contact lens business

SUBANG JAYA: Glove maker Supermax Corp Bhd, which expects its contact lens business to contribute positively to the group’s earnings by the second half of 2019, wants to be a top five contact lens player in the world with a minimum production capacity of one billion lens a year, in 10 years.
Supermax is the world’s second largest producer of rubber gloves and also Malaysia’s first contact lens manufacturer. SuperVision Optimax Sdn Bhd, its contact lens business unit, was set up to complement the group’s rubber glove business.
Supermax group managing director Datuk Seri Stanley Thai said its Sungai Buloh manufacturing plant produces 70 million contact lenses a year.
“It’s our objective to be the top five global (contact lens) players. We’re heading towards a capacity expansion to at least hit one billion lenses, and that will put us into the top global players (position with) the big four, depending on how quickly we can get our market penetration into Japan, US, Europe and China,” he told a press conference after its AGM today.
Thai said the group is selling its contact lenses to 30 countries now and is waiting for more licences to be issued by the health ministries of respective countries, including Japan and China, that will allow Supermax to market its lenses there.
“As we receive more licences in the designated countries, we’ll able to sell our products. We expect to get the Japan licence by Q4 next year. Our focus on lenses is to increase our market penetration through acquisitions. We’re focusing to acquire a few contact lens players in Japan. We want to be a dominant player in the Japanese market,” said Thai.
In Q4’16, Supermax entered into Japan and incorporated a 70/30 joint venture company Aime Supermax KK based in Japan. Japan is the second largest consuming market of disposable contact lens after the US.
“We’ve acquired one company. We’re looking at the acquisition of additional companies (to cover the various industries) and we’re talking to a few parties. In 2019, you’ll see contribution from the Japanese market for contact lenses substantially,” said Thai.
The group has allocated a capital expenditure of RM100 million for the contact lens business, which includes converting an old glove manufacturing facility in Sungai Buloh into a new contact lens manufacturing headquarters in three years.
Supermax Healthcare Inc, a wholly owned subsidiary of Supermax group based in the US, has started an e-commerce platform headquartered in Silicon Valley, California; selling contact lens, eye care and lens care products.
Thai said it is budgeting US$3-4 million (RM12.5-16.6 million) a year for the e-commerce platform and will launch the platform simultaneously in Singapore, Hong Kong, UK, Brazil and US in Q1 next year. The Singapore platform will cater for Asean, Southeast Asia, Middle East and African continents. The Hong Kong platform will focus on China whereas the UK platform will focus on the European markets.
“If we can sell gloves to 165 countries today, we should be able to sell lenses to the same number of countries. The contact lens (business) is promising, it’s an investment that we’re looking forward to contribute substantially to our bottomline,” said Thai.
Meanwhile, Supermax is currently producing 23.4 billion pieces of gloves per year and the group has identified capacity growth to 25.8 billion pieces by end of 2018 by improving efficiency and rebuilding its old plants. The group is committed to solving issues hindering capacity expansion and expects to churn new capacities by 10%.
“Going forward every quarter, we should be able to improve our ebitda margin,” said Thai.