Joint Venture Company In China

TOP GLOVE CORPORATION BHD

TypeAnnouncement
SubjectJoint Venture Company In China

Contents :

    Top Glove Corporation Bhd ( the “Company”)

    Re: Joint Venture Company In China

    1. Introduction

    We wish to announce that Top Glove Sdn Bhd (TGSB), a wholly owned subsidiary of the Company has on 13 May 2002 entered into a Joint Venture Agreement with two other parties namely, Zhangjiagang Medical Glove Co. (ZMGC) & Hadsyn Latex Co. Ltd (Hadsyn) to set up a joint venture company in Xizhang Town Zhangjiagang, China for the manufacturing of PVC gloves.
    The signing ceremony was held at 12.30pm on 13 May 2002 at Shangri-La Hotel in Shanghai, China witnessed by H.E. Dato’ Seri Rafidah Aziz, Minister Of International Trade and Industry, Malaysia.
    The proposed name of the joint venture company is Top Glove (Zhangjiagang) Co. Ltd.
    Incorporation of the proposed joint venture company is currently under process.

    2. Information On The Joint Venture Partners
    2.1) Top Glove Sdn Bhd (TGSB)

    TGSB was incorporated on 9 July 1991 in Malaysia as a private company under Companies Act, 1965. TGSB is principally involved in the manufacturing, trading and exporting of various types of latex gloves. The company commenced operation of the production lines in early April 1992 and with total of 58 production lines is currently one of the leading latex examination, nitrile, surgical and household glove manufacturer and exporter in Malaysia and worldwide. The present authorised share capital of TGSB is RM10,000,000 comprising shares of RM1.00 each while the issued and fully paid share capital is RM10,000,000 comprising shares of RM1.00 each.

    2.2) Zhangjiagang Medical Glove Co (ZMGC)

    ZMGC was established on 19 Oct 1998 in Zhangjiagang, China. The current authorised and paid up capital of the company is RMB17,200,000 ( Ren Min Bi seventeen million & two hundred thousand only) comprising shares of RMB1.00 each. ZMGC is specialising in the production of disposable PVC gloves for export market.

    2.3) Hadsyn Latex Co. Ltd ( Hadsyn)

    Hadsyn Latex Co Ltd was incorporated on 1st October 1998 in Thailand as a private limited company. Hadsyn is principally involved in concentrated latex processing, skim block latex processing and trading of field latex as well as other natural rubber products. The present registered, issued and paid up share capital stands at 60 million Bahts comprising shares of 10,000 Bahts each.

    3) Information On The Joint Venture Agreement ( JV)

    The Joint Venture Agreement (JV) to form a new company was signed on 13 May 2002. Incorporation of the said new company is under process.

    The proposed share capital of the JV is USD3,000,000 ( US Dollars: Three million only) and the composition of shareholders of the joint venture company is as follow:
    Name
    Nationality/ Country
    of Incorporation
    Shares (USD)
    %
    1)Top Glove Sdn BhdMalaysia 1,650,00055.0
    2)Zhangjiagang Medical Glove CoChina 900,00030.0
    3)Hadsyn Latex Co. LtdThailand 450,00015.0
    Total 3,000,000100.0

    The principal activity of the JV is to carry on the business as PVC gloves manufacturer.

    4) Rationale For The Joint Venture

    The Company is venturing into China as part of its business expansion plan and more importantly, to further strengthen its position as a “One –Stop Complete Gloves Sourcing Centre”. Currently, the Company is specialising in all types of latex and nitrile gloves. PVC glove is not produced in Malaysia and presently, TGSB is outsourcing PVC gloves for a number of its customers worldwide. The Company sees a vast potential market to manufacture the PVC gloves for its many customers in more than 108 countries all over the world.

    PVC glove manufacturing technology is well developed in China, raw materials for the PVC glove production are available locally in China and the overall production cost is cheaper.

    5) Sources Of Fund

    The funding requirement of the said JV will be provided by internally generated funds.

    6) Effects Of The JV

    The said JV will have no material effect on the earnings of the Company for the current financial year ending 31st August 2002. However, barring any unforeseen circumstances, the JV is expected to contribute positively to the future earnings of the Group.

    7) Directors and Substantial Shareholders’ Interest

    i) Dr Lim Wee Chai is a director of Top Glove Sdn Bhd and the Company.

    ii) Datuk Lim Kwee Fatt, who holds 75% shares in Hadsyn and who is one of the
    directors of Hadsyn, is a brother to Dr Lim Wee Chai.

    Other than the above, none of the directors of the Company or persons connected to them, has any interest, direct or indirect, in the JV.
    The Board is not aware of any substantial shareholders or persons connected to them having any interest, direct or indirect, in the said JV.

    8) Approval Of Shareholders and Authorities

    No approval from the shareholders of the Company is required for the said JV.

    The Company will be applying to Bank Negara Malaysia for the approval of foreign investment.

    9) Salient Features Of The Joint Venture Agreement and Availability For Inspection

    There are no salient features in the joint venture agreement.

    Copy of the agreement may be inspected during normal business hours at the registered office of the Company at Level 22, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, from Monday to Friday (except public holidays) for up to two (2) weeks effective from 15 May 2002.

    10) Statement By The Board Of Directors

    The Board Of Directors is of the opinion that the said Joint Venture is in the best interest of the Company and its shareholders.




Announcement Info

Company NameTOP GLOVE CORPORATION BHD  
Stock Name TOPGLOV    
Date Announced13 May 2002  
CategoryGeneral Announcement
Reference NoTG-020511-42741