When
it ventured into contact lens manufacturing in 2014, investors feared
that it would be distracted by the new business – one that would take
years to make it to market.
But RM100 million and almost three years later, Supermax is hoping to prove
the naysayers wrong especially when glove makers are facing intense
competition that has driven average selling prices and margins down.
Contact
lens manufacturing, by contrast, is a high value add industry with big
margins, requires no foreign labor and has relatively stable raw
material costs.
Supermax
is Malaysia’s first home grown contact lens manufacturer via its 98%
owned subsidiary SuperVision Optimax Sdn Bhd, having successfully
commissioned its local production facility early 2016.
With
its growing worldwide distribution net work, Supermax has started
exporting its contact lens under its Aveo Vision brand, first to HK in
Sept 2016 and then to Brazil, South Korea and Singapore in Jan 2017, Feb
2017 and March 2017.
The company is launching Aveo Vision in Malaysia in June 2017.
Elsewhere
the group will be bringing the brand to the UK, Canada, the US and
Mexico later 2017 and Japan in first quarter of 2018.
Its
CEO thinks the value will continue to grow with the rise of emerging
markets such as China, Latin America and India and China will eventually
overtake the US as the largest consumer market for contact lens.
Ireland is the largest contact lens manufacturer in the world.
Its
manufacturing plant is situated in Sungai Buloh. All the four
production lines are running at full capacity at present (May 2017) and
the group will soon receive backorders.
Outside Malaysia, Supermax owns a six acre parcel in the US that could be developed into a contact lens manufacturing site.
The
next phase of expansion for Supermax’s contact lens business will only
happen in about two or three years. The company does not have room to
build new production lines.
That
said, there will not be substantial contribution from the business
either. The group will have channel the bulk of the business’
operational profit into marketing, advertising and promoting its Aveo
Vision brand.
Still
this does not mean that the group will neglect its core business. It
still faces pressure to keep its earnings growth intact despite the
escalating raw material, labor and gas costs as well as uncertain
currency movements.
Supermax will be rebuilding several of its older plants for efficiency gain.
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