Unclear Management Succession At Supermax Corporation

Background

Supermax Corporation Berhad is a Malaysian investment holding company focused on manufacturing and distribution of medical gloves.

Founded in 1987, it now produces approximately 25bn gloves per year at 11 manufacturing plants in Malaysia. It exports to over 160 countries in America, Europe, Middle East, Asia and the South Pacific.

Business Description

SUCB manufactures, trades, and distributes latex and nitrile gloves. The company uses a variety of brands to market the products: Supermax, Aurelia, Maxter, Medic-dent, and Supergloves. SUCB meets approximately 12% of the world demand for latex examination gloves used in labs, hospitals, pharmacies, etc.

In the manufacturing segment, the company has 11 plants and an R&D center in Malaysia. In the trading segment, it has six distribution centers inBelgium, Brazil, Canada, Germany, UK, and US. The company also collaborates with 1,200 independent distributors around the world.

The company is now engaging in contact lens manufacturing and exporting to 65 countries. SUCB expects to enter the Japanese market in June 2019. Its annual production capacity was 70m lenses as of 2017, a 75% increase from 2016. After the initial investments and waiting time for lens license approval, the segment should turn profitable when it is selling at the larger scale. As lenses are classified as controlled medical products, licenses also work as a barrier to entry for competitors.

Leadership

In November 2017, the Managing Director and founder Stanley Thai Kim Sim vacated his post as he was sentenced to a five-year jail term and an about US$1.2 million fine for insider trading offenses committed in 2007 related to when he was the CEO of now-delisted APL Industries Berhad. In January 2018, Mr. Thai’s daughter Cecile Jaclyn Thai and his nephew Tan Chee Keong were appointed Executive Directors of Supermax Corporation Berhad.