Aspen weighs exiting medical glove business

Medical gloves. Credit: Anton on UnsplashMedical gloves. Credit: Anton on Unsplash

Aspen (Group) is weighing disposing of subsidiary Aspen Glove Sdn. Bhd. (AGSB) as among the options for the business, which hasn’t been able to secure any significant new purchase orders from new or existing customers, the Singapore-listed company said Wednesday.

Other options on the table include recapitalizing AGSB and entering into a joint venture, Aspen said in a filing to SGX.

Aspen said it would be scaling down the business, which would have a material impact on earnings for the fiscal year ending 30 June.

AGSB’s medical glove business is facing “increasing headwinds” as demand tumbled as Covid-induced orders eased and inventory levels were high, the company said, adding competition, global supply-chain challenges, higher shipping costs and declines in average selling prices (ASPs) all weighed on the unit.

“Amidst the falling ASP, glove buyers have refrained from stocking up on gloves to avoid locking in purchases at high prices,” Aspen said.

Aspen said it would focus on its property development and food and beverage businesses, which are showing signs of recovery amid a shift to endemic Covid policies. But the company noted the recovery could prove short-lived if supply-chain disruptions and price inflation persist.