Kuala Lumpur – Anzo Holdings Bhd is believed to be in the process of buying a glove manufacturing company in Selangor for about RM50 million.
It is understood, Anzo is buying the company as it owns a factory which is capable to produce over one billion pieces of nitrile gloves or medical gloves a year.
Based on my calculation, Anzo will derive a revenue of over RM400 million a year from selling the gloves.
And with the current global market price of nitrile gloves, and if we take the highest price of USD75 for every 1,000 pieces, Anzo will definitely make a handsome profit.
Let’s say that Anzo sells the gloves at that price which i am sure they will be able to as there is shortage of nitrile gloves worldwide currently, Anzo will make a handsome profit of more than RM200 million a year.
This is very good news for the Malaysian market which has been depressed since the beginning of this year because of the Covid-19 pandemic .
Anzo is one of few companies that is listed on Bursa Malaysia which has been making news for all the right reasons.
The timber and property development company has been looking to diversify its income stream to mitigate any shortfall in earnings as the market for property development activities is rather slow currently.
Last week Anzo announced that CSTME Resources Sdn Bhd, which has an AP (approved permit) license has emerged as a substantial shareholder in the company with 11.621 per cent stake.
Before that Anzo announced that it had secured a RM1.3 billion deal to supply copper scrap to a South Korean group.
All these good news should explain why the stock has been active.
Anzo is expected to have guaranteed payment over 40 months, which is the duration of the contract with the Korean group. This will augur well for the company to perform better.
Hopefully by the time the contract ends within the next three years, Anzo would have secured a new contract or it may also possibly extend the contract with the South Korean group.
Meanwhile, CSTME, incorporated in 2014, is one of the major importer and exporter of non-ferrous materials in Malaysia which specialized mainly in copper products.
Last week Anzo, its subsidiaries and CSTME inked an agreement to supply copper scrap to the South Korean group.
CSTME agreed to buy birch/cliff copper scrap or berry/candy copper scrap from Anzo over 40 months.
Anzo told the stock exchange it will supply up to 60,000 metric tonnes of copper scrap to CSTME at RM23,000 per metric tonne during the contract period.
CSTME said it will buy the products from Anzo and export them to South Korea, effective July 1.
Anzo said this deal is expected to strengthen its trading business for sustainable earnings in a long period.
The deal will also create business opportunities in the international export market for Anzo, which has been looking to diversify its income stream as its current business that includes property development has not been doing so well because of weak market conditions.