- VIP Gloves (VIP) temporarily ceases its glove manufacturing operations, sending its share price plummeting
- The company’s board says the decision is due to “unfavourable” economic conditions, including poor demand for nitrile gloves and rapidly increasing gas utility costs
- The company is currently completing an assessment and review of its options and will provide an update to the market once it has decided on its future operations
- Shares in VIP Gloves are down 33.3 per cent to trade at 0.4 cents as of 1:00 pm AEDT
VIP Gloves (VIP) has temporarily ceased its glove manufacturing operations, sending its share price plummeting.
The company’s board said the drastic decision was due to “unfavourable” economic conditions, including poor market demand for nitrile gloves and rapidly increasing gas utility costs.
The company also cited an increase in the minimum wage set by the Malaysian government s part of the reason for the cessation of its operations.
VIP Gloves said it was completing an assessment and review of its options and would provide an update to the market once it had decided on its future operations.
During the September quarter, the company said it was seeking to expand into alternative types of gloves and create new glove markets after temporarily halting nitrile glove production.
Total sales revenue from nitrile glove sales during the September quarter was RM1 million (A$300,000), which was an 85 per cent quarter-on-quarter decrease compared to the preceding quarter.
In its 2023 outlook, the company said it expected the glove industry to remain at these current levels until at least early 2023 before a return to normal operating equilibrium.
VIP believes that once demand-supply returns to its previous operating equilibrium, glove demand will also resume to the 12 to 15 per cent annual growth rate forecast by the Malaysian Rubber Gloves Manufacturers Association (MARGMA) in August.
Shares in VIP Gloves were down 33.3 per cent to trade at 0.4 cents as of 1:00 pm AEDT.