Financial Times

DPL starts work on Thai medical glove plant

Dipped Products Ltd. (DPL) has begun construction work on its US $ 9 million medical gloves plant in Thailand, the company's first overseas manufacturing facility.

DPL managing director N. G. Wickremeratne said the plant, with an annual production capacity of 600 million pieces, would allow the company, one of the world's largest non-medical rubber glove manufacturers, to diversify into the manufacture of medical examination gloves.

It will also target the bulk of its sales in the United States.

"Right now about 50 percent of our sales are in Europe and about 35 percent in the US," Wickremeratne said. "With medical gloves, the split may be the other way around because the big market for medical examination gloves is in the US."

The company will use its existing marketing channels to sell the new product, which is of a higher standard than the industrial and household gloves DPL has concentrated on making so far.

The Thai plant would initially produce gloves for patient examinations and later on may manufacture surgeons gloves used in invasive surgery.

Work on the plant, located on 12 acres of land in the Songkhla Province in Southern Thailand, is to be completed in four months, and machinery and equipment installed by September, a company statement said.

The medical gloves project is expected to generate annual revenues of more than US $ 10 million, and will add to DPL's product range and create synergies with its distribution company ICO Guanti SpA of Italy, which it acquired in May 2002.

Dipped Products (Thailand) Ltd, the subsidiary which will undertake the project, has got a long term loan of Baht 150 million (US $ 4 million) and a working capital loan of Bhat 30 million (US $ 0.75 million) from the Industrial Finance Corporation of Thailand.

Wickremeratne said a significant aspect of the loan was that it was provided without a corporate guarantee from DPL, signifying the confidence placed by the lending institution in the company, which is a member of the Hayleys Group.

The Board of Investment of Thailand has granted an attractive package of concessions to the company to locate its plant in the Songkhla province.

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