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Supermax Shares ‘Good Bargain’ After Slide, Chairman Thai Says

Sept. 14 (Bloomberg) -- Stanley Thai, executive chairman of Supermax Corp., the world’s second-largest maker of rubber gloves, comments on the company’s share price, raw material costs, profit margins and earnings outlook. He made the remarks in an interview in Kuala Lumpur today.

Supermax shares fell 8.1 percent to 2.37 ringgit at 12:30 p.m. midday break in Kuala Lumpur, set for a seventh consecutive day of losses. The stock has fallen 51 percent over the past year, compared with a 2 percent drop in the benchmark FTSE Bursa Malaysia KLCI Index.

On Supermax’s falling share price:

“We have a high percentage of institutional shareholdings. Foreign funds are investing in the rubber-gloves industry. When they exit or take profit, our counter gets hit. This is a good time where there is good bargain for people who understand our industry.”

On raw material costs:

“The volatility of the raw material prices will actually affect our margin. As far as the demand and consumption is concerned, we are still enjoying quite good demand. We are still able to have a compounded annual growth rate of over 20 percent.”

On global rubber supply:

“Supply should increase because of new acreage of plantations coming up in Cambodia and southern Vietnam. When it happens, all the new capacity will go to China because it will be a big consumer for material. Once the new supply comes in, we’re going to see natural rubber prices come down.”

On the ringgit’s strength:

“So long as the ringgit appreciation is in tandem with regional currencies, we should be able to compete globally. We are in a recession-proof industry. We are pretty much resilient.”

On European and U.S. glove-market outlook:

“We can grow at least 50 percent in terms of earnings and revenue in European market, and at least 25 percent growth in our American market. We see tremendous growth potential in emerging economies.”

“We’re looking at new emerging economies such as the BRICs nations and South Africa.”

To contact the reporters on this story: Gan Yen Kuan in Kuala Lumpur at ykgan@bloomberg.net; Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net

To contact the editor responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net

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