To fulfil its existing sales orders and to enable the company to commit to new orders, VIP Gloves is urgently pursuing completion of the installation of new production lines.
Progress for the installation of new production lines is progressing well, with lines 5 and 6 targeted to be completed by December 2020, with lines 7 and 8 due to be completed by April 2021.
Average selling prices to rise by 50%
VIP Gloves executive director WM Chen said: “Our factories are currently working 24/7 to fulfil the existing orders and new orders are still coming in with higher average selling prices.”
Average selling prices (ASPs) have continued to rise over the last several months due to increased demand.
The company anticipates a 50% increase in the ASP for the current quarter ending December 2020, from the US$50 per 1,000 pieces achieved in the July to September 2020 quarter.
COVID-19 operations update
VIP Gloves said that currently none of its factory workers had tested positive for COVID-19 and that production was operating as normal.
It assured shareholders that it had strict Standard Operating Procedures as required by the Malaysian Ministry of Health for its factory operations.
It noted that several glove factories in Malaysia were forced to shut down their operations after their workers contracted COVID-19.
VIP’s existing factory currently holds two double-former lines and two single-former lines with a total annual capacity of 620 million pieces.
A further four single-former lines are being installed progressively by mid-2021, increasing annual production capacity to an estimated 1 billion pieces of gloves when all lines are operating at full capacity.
It also proposes to build up to 10 double-former lines with an annual production capacity of about 2.5 billion pieces of gloves in a new production facility, taking its total annual capacity would rise to 3.5 billion pieces.