Aspen retracts announcements on Honeywell gloves order

ASPEN (Group) has withdrawn the announcements that it had clinched a US$210 million gloves supply order from Honeywell, after the American company did not consummate the agreement by the effective date.

Aspen described it as a "communication oversight between the parties" in a regulatory statement on Saturday. It explained that in the lead-up to the announcements made on April 13 about the order, its newly-formed subsidiary Aspen Glove had received what it believed to be the final agreement from Honeywell, with April 12 being what it perceived as the effective date of the agreement.

It said Aspen Glove had received written e-mail instructions from Honeywell to issue an invoice for US$10 million to facilitate the first payment of the deposit in the event the two-year master supply agreement was fully executed.

Despite having completed all the formalities and delivered the agreement electronically to Honeywell together with the invoice, the American MNC has till now not signed the agreement.

Aspen had stated earlier that the agreement was to manufacture and supply nitrile medical-grade examination gloves to Honeywell on an original equipment manufacturing basis for the US market.

Aspen would have raked in a total of US$310 million in sales value from glove-making, with the Honeywell order. The agreement would also allow the firm to expedite the expansion of its facility to house an additional 12 production lines and increase total production capacity to 7.2 billion gloves per annum by the fourth quarter of 2021.

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Aspen Glove was "negotiating" when it made the earlier announcements on the Honeywell order to sell the additional 3.6 billion gloves per annum that will be produced under this expansion. It also was working on plans to expedite the completion of production facilities that will add another 7.2 billion pieces of gloves per annum by 2022.

Aspen shares had risen to S$0.255 on April 15 after it reported the order, but have since been on a decline. The counter closed S$0.23 on Friday, a decline of 2.13 per cent or 0.5 cent, before retraction of earlier announcements was made.