Careplus Group Bhd, a rubber glove maker, aims to double revenue by 2013 from the RM41.86 million registered for the year ended January 31 this year as it embarks on an aggressive expansion plan.
Over the next three years, it plans to almost quadruple its production capacity to more than 1.65 billion pieces of gloves, from 420 million pieces currently.
The expansion will be done via three phases, scheduled to be commissioned in first quarter 2011, third quarter 2010 as well as third quarter 2013.
Although capacity will jump exponentially, Careplus believes its gloves can be easily snapped up by the increasing global demand.
"First of all, we are a very small player, with less than 1 per cent market share. So, even if we double up (our capacity), it wouldn't even touch 2 per cent. So, I believe there will be a market that we could undertake to support our increasing capacity," Careplus executive director and chief executive officer Lim Kwee Shyan said after the launch of its prospectus in Kuala Lumpur yesterday.
Lim added that in terms of doubling or tripling the company's supply to the global market, it is still a very small portion in the total gloves requirement.
"The global gloves market is expected to grow at a 8 per cent to 10 per cent rate annually, so that 8 per cent to 10 per cent growth is a very huge quantity.
"So that itself will give a big room for a player like us," he said.
The company aims to raise about RM15 million from the initial public offering exercise, involving the public issue of 65.05 million new shares of 10 sen each at 23 sen a share.
Of the 65.05 million shares, 10.5 million will be available for public application and 15.65 million for application by directors, employees and business associates. The remaining 38.9 million will be reserved for placement to selected investors.
The proceeds will be used to expand Careplus' production capacity, which includes buying machinery and equipment for production lines.
"In terms of having the economies of scale, we need to go into that expansion pace. We cannot get the cost efficient if we work on one or two production lines," Lim said.
Currently, the firm produces only natural rubber gloves. The commissioning of the new production line next year will allow it to also produce nitrile gloves.
"We are focused more on latex gloves and will eventually start production of nitrile gloves, in line with our expansion. This new investment has given us an opprotunity to grow, which we have not been able to do so over the past five to six years.
"With our strong customer base, I believe that it is possible for us to achieve growth and attract newer customers in future," non-executive chairman Peter Yew explained.
The firm is expected to be listed on the ACE Market on December 6.