Aspen to build factory for new glove business, names MD for unit

TO undertake Aspen (Group) Holdings' proposed glove-making business, the Malaysian property developer's wholly-owned subsidiary Aspen Vision All (AVA) has entered into a formal joint venture and shareholders' agreement with global capital market investor CMY Capital. (see amendment note)

The group has also appointed Iskandar Bashar Abdul Kadir as the managing director of Aspen Glove, the group's new unit for the proposed business, starting Wednesday.

Mr Iskandar, 60, holds a 5 per cent stake in Aspen Glove. In 2016 to 2018, he was an adviser/senior officer to the minister in the Economic Planning Unit of the Prime Minister's Department of Malaysia, according to Aspen (Group)'s bourse filing on Wednesday.

The group is in the midst of finalising the appointment of a chief operating officer for the new glove unit. It said the person has over 20 years' experience, predominantly in the rubber-glove manufacturing industry.

Meanwhile, Aspen Glove has agreed to lease a plot of land in Kulim Hi-Tech Park, in the Malaysian state of Kedah, to build its first factory to manufacture latex and nitrile gloves.

It will lease the land for 60 years for around RM51.5 million (S$16.8 million), or RM40 per square foot. Aspen Glove also has the option to renew the lease for 39 more years.

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The industrial park is some 20 minutes away from Penang Port, which will be the main port of commission for exports of gloves from the factory.

Aspen Glove has applied for a development order and building plan approval to construct the factory. These are expected to be obtained on a fast-track basis, said Aspen (Group).

Under the first phase of the proposed business, the glove unit expects to complete the facilities, commence operations and market the products to produce 1.1 billion pieces of gloves annually by the third quarter of 2021.

The next part of the first phase will see the capacity ramped up to 3.5 billion pieces per year by the second quarter of 2022.

Subsequently, depending on market demand, Aspen Glove may complete another three business phases within the next three years. If all four phases are completed, it expects to produce a total of 14 billion gloves annually.

If there is even greater market demand, Aspen Glove will negotiate with Kulim Technology Park Corp to lease a second plot of industrial land, adjacent to the first plot in the Kulim Hi-Tech Park, to include more production lines within the next three to five years. This will then increase its production capacity to 28 billion gloves per year.

In August, Aspen (Group) first announced plans to diversify into the manufacturing and distribution of rubber gloves.

It said then that it had acquired Aspen Glove, a dormant company, from its president and chief executive Murly Manokharan in connection with the proposed diversification.

The implementation of the proposed diversification, the lease agreement for the first factory as well as the joint venture and shareholders' agreement is conditional upon shareholders' approval at an extraordinary general meeting expected to be held on Sept 18 or by Sept 30.

Shares of Aspen (Group) fell 1.5 Singapore cents or 5.8 per cent to close at 24.5 cents on Wednesday, after the announcements.

Amendment note: A previous version of this article wrongly stated that Mr Iskandar had signed the joint venture and shareholders' agreement with AVA and CMY, based on an earlier reading of the company's Aug 12 filing. The agreement was in fact signed by just AVA and CMY, without Mr Iskandar, based on the Sept 2 filing.