Aspen (Group) Holdings is “significantly” scaling down the operations of its glove-making subsidiary Aspen Glove, given the “drastic reduction” of gloves with the easing of the pandemic.
Aspen warns that this move will have a material impact on its results in the current financial year ending June 30 2022.
Headed by president and group CEO Murly Manokharan (picture), Aspen’s core business is in property development but has since joined the fray of companies diversifying into glove-making amid the boom for medical consumables during the pandemic.
According to Aspen, the glove-making industry is seeing high inventory levels, stiffer competition, supply chain issues, inflationary pressures, and decline in selling prices.
The company cites risks of a global recession with the on-going war in Russia and Ukraine dragging on as another reason.
As selling prices continue to drop, buyers have “refrained” from stocking up to avoid locking in their purchases at high prices.
See also: Kingsmen Creatives acquires 10% stake of Kingsmen E&E for $395,000
“As a result, Aspen Gloves has been unable to secure any significant new purchase orders from its existing or new customers,” the company says.
It is now “evaluating various options” on this glove business, including recapitalisation, entering into a joint venture and/or sale of the entire business and assets of Aspen Gloves
For now, it will continue to focus on its original property development business and also the fledging F&B business.
See also: Nissan CFO set to step down as carmaker faces raft of challenges
The company’s glove making subsidiary had earlier announced it faces claims from a couple of contractors, including RM29.35 million from Multi Purpose Metal Tech and RM84.4 million from Tialoc Malaysia.
Aspen (Group) last traded at 6 cents, down 45.45% year to date.
