Last week Anzo Holdings Bhd won a RM1.3 billion contract to supply copper scrap over a 40 month period to a large South-Korean based steel-maker.
Today the group announced that it paid RM55 million to acquire a factory producing medical and/or nitrile gloves in Manjung Perak.
What’s next? Already there are talks that substantial shareholders will emerge in Anzo. Looking at the share price movement since the beginning of this year and the numbers of shares traded everyday, that could be true!
We hear that a Chinese investor or some tycoon from Hong Kong will end up as a substantial shareholder of Anzo. Few names have come up but let us get more details first before we get deeper into this.
While we wonder why the Chinese or Hong Kong investors are buying into Anzo, it is pretty obvious because they want a hand in the glove business. Further, they may also want to be part of the copper deal which Anzo sealed last week.
“The investors are coming in as they see the potential in Anzo. It is interesting that Anzo, which is involved in timber and property development, has moved so fast in its expansion and is now into copper and gloves.
“Maybe that is why interest in Anzo has been building up lately,” said a local fund manager.
Last week a newspaper reported that something is brewing in Anzo.
On June 23, Anzo was asked to clarify by Bursa on the news report mentioning that “a foreign investor was eyeing a stake in Anzo and it may also come in to inject a new business.
Anzo responded saying that, “The Board of Directors are not aware that a foreign investor was eyeing a stake in Anzo and it may also come in to inject a new business. The Board noted that there are some foreign investors acquired shares in the company.”
This makes it pretty clear to me that something is really “brewing” in Anzo.
Meanwhile, coming back to the glove story, Anzo told Bursa Malaysia that it had entered into a term sheet with Wintrade World Sdn Bhd today to acquire the company’s assets, including land, building, machineries and equipment in Manjung.
Anzo said the assets are ready to be mobilised and commissioned to produce 1.2 billion pieces of medical and/or nitrile gloves a year.
Anzo said that the assets and its capacity is expected to generate substantial profits for the group.
While Anzo did not specify how much it will make, we have made our own calculations – a whopping RM200 million!!! This is based on the fact that the current market price for medical gloves or nitrile gloves is in the range of USD70 per box of 1,000 pieces.
Selling 1.2 billion pieces of gloves at that price makes almost RM200 million in net profit for Anzo.
Anzo’s earnings are secured for many years ahead with just this deal coupled with the copper contract.