J.P. Morgan and Macquarie Group is expected to raise RM500 million via the issuance of bonds for Anzo Holdings Bhd (Anzo) who is raising money to refurbish and expand its glove manufacturing factory in Manjung, Perak.
Anzo is acquiring the land, factory, machinery and equipment owned by Wintrade World Sdn Bhd (Wintrade) for RM55 million.
Market analyst said, “We hear from the market that Anzo is signing the Sales and Purchase Agreement (SAP) with Wintrade to purchase all the latter’s assets within this week, or earliest by this Thursday (July 16)”.
This means Anzo will officially be a glove manufacturer in the likes of Top Glove, Kossan and Hartalega.
A broker told me to grab the shares of Anzo now and keep them long-term as the stock will “fly” like how it happened for all the Bursa-listed glove and healthcare companies.
Anzo said, two weeks ago that the assets in Manjung are ready to be mobilised and commissioned to produce 1.2 billion pieces of medical or nitrile gloves a year.
The 1.2 billion pieces of medical gloves will be produced using the current 9 production lines at the factory.
Anzo is required to produce more than 3 billion pieces of medical gloves as it has orders in hand worth US$200 million from the United States and Europe. To make 3 billion gloves, Anzo requires at least 15 production lines to operate at their full capacity.
Under the deal with the buyers from the United States and Europe, Anzo is expected to start supplying the gloves from October this year and go full swing early next year.
It is timely that Anzo gets J.P. Morgan and Macquarie Group to raise the RM500 million for the factory expansion.
Anzo requires money to firstly refurbish the factory, including the production lines, machinery and equipment, and then add 6-7 new production lines and later expand the factory with more production lines.
It will work in a joint venture with Permaju Industries Bhd (Permaju) for this. Does this mean Permaju is also venturing into glove manufacturing? That will be a very interesting discovery!
Permaju and Anzo have completed a feasibility study on the Manjung factory to look at the fastest way possible to move the production of the gloves.
Anzo could be anticipating more orders from the United States and Europe as the number of Covid-19 cases worldwide keep increasing, and there is a shortage worldwide for medical or nitrile gloves which is why it is in a rush to expand the factory.
Both Anzo and Permaju traded actively today.
Anzo’s share price movement started after the company announced that it won a RM1.3 billion contract to supply copper scrap over 40 months to a steelmaker in South Korea effective July 1.
Anzo and its subsidiaries entered into a supply agreement with CSTME Resources Sdn Bhd, which holds an AP licence to export the goods. CSTME agreed to buy birch/cliff copper scrap or berry/candy copper scrap from Anzo and export the products to the steelmaker in South Korea.
Anzo is expected to supply 60,000 tonnes of copper scrap to CSTME at RM23,000 per tonne over 40 months. CSTME has been supplying the copper to South Korea effective July 1. As of July 13, it has supplied up to 650 tonnes worth almost RM15 million to RM16 million.
With this copper deal and the orders it is getting for medical gloves, Anzo is set to post more than RM200 million in net profit in its next financial year ending July 31, 2021 and onward. Anzo may sell a box of 1,000 pieces at US$75.
Anzo’s entry into the copper business and glove manufacturing has attracted big global funds from the United States, China and Hong Kong who have been buying up shares in the company since early June this year.
The stock has moved from a low of 5 sen in June to touch 26 sen last week. We think Anzo will hit a second wave of high trading this week. It could hit limit-up or surge beyond 30 sen.
