Business Overview

5. INFORMATION ON OUR GROUP 5. INFORMATION ON OUR GROUP
5.1 History and business overview Our Company was incorporated as a public company in Malaysia under the name of Hartalega Holdings Berhad on 24 July 2006 under the Act as an investment holding company to facilitate our Listing. We commenced operations on 27 September 2006. The history of our Group can be traced back to 1981 when HSB was established by Mr Kuan Kam Hon @ Kwan Kam ann, our Managing Director and his brother Me Kuan Kam Pengo Since the commencement of HSB’s operations in the FYE 1989, Mr Kuan Kam Hon @ Kwan Kam ann has been instrumental in the success, growth and development of our Group. With approximately 19 years of experience in the Latex Gloves industry, Me Kuan Kam Hon @ Kwan Kam ann has successfully led our Group to become an established player in the industry and an exporter of Latex Gloves to 17 countries for the 6 months FPE 30 September 2007 (FYE 2007: 23). In 1988, our Group began our manufacturing operations with a single production line, which has now expanded to 23 production lines. Our Group currently has 3 manufacturing plants. Further, we are in. the midst of setting up the 4th Plant and envisage to commence the construction of the 5th Plant in the FYE 2009. These new manufacturing plants are being set up to cater for our future business expansion which is expected to be fully operational by the FYE 2009 and FYE 2010 respectively. In the same year, our Group made our ftrst foray into the overseas market by exporting to the USA. Since then, our Group has expanded our markets by exporting to 17 countries for the 6 months FPE 30 September 2007 (FYE 2007: 23) including the USA, Japan, Germany, Brazil, Canada, Australia, UK, Ukraine, Netherlands, Switzerland and others. Our Group also incorporated SEMSB in 1987 which commenced operations in 2000 to focus on R&D on automation systems to continually improve on the production efficiency and effectiveness of our Group’s Latex Gloves manufacturing operations. SEMSB will also become the future patent holder of our Group’s proprietary designed and developed machinery and systems including the double former dipping lines, robotic glove stripping system and the glove puller and stacker system. Further, as part of our Group’s expansion plans, PAPL was incorporated in 1996 and commenced operations in 2001 to focus on the marketing of Latex Gloves in Australia. In 2003, pur was incorporated as the marketing arm based in California and had commenced operations in the same year to focus on marketing of Latex Gloves in the USA. The principal business of our Group is in the manufacture of Latex Gloves including natural rubber gloves and Nitrile Gloves. Our Group is also involved in secondary activity namely the trading of Vinyl Gloves, which represents a small proportion of our Group’s business. The business activities of our Group can be depicted as follows: Business activities of our Group T II Manufacturing Trading II Natural Rubber Gloves  Nitrile Gloves
Vinyl Gloves 5. INFORMATION ON OUR GROUP (Cont’d) 5.2 Share capital aUf present authorised share capital is RM250,000,000 comprising of 500,000,000 Shares of which RM12 1,156,000 comprising 242,3 I 2,000 Shares are issued and fully paid-up. Since our incorporation, the changes in our issued and paid-up share capital are as follows:
No. of  Date of  Shares  Total issued and paid- allotment  allotted  Par Value  Consideration  up share capital  RM  RM  24.07.2006  2  RM1.00  Subscribers’ shares  2  03.05.2007  4  RMO.50  Share Split  2  07.05.2007  242,31I,996  RMO.50  Acquisition ofHSB  121,156,000
As at 15 February 2008 (being the latest practicable date prior to the issuance of this Prospectus), we do not have any outstanding warrants, options, convertible securities or uncalled capital.
5.3 Details ofthe Flotation Exercise In conjunction with, and as an integral part of our Listing, we have and shall undertake the following corporate exercises: (i) Share Split
On 3 May 2007, we undertook a share split which involved a change in the par value of our ordinary shares from RM1.00 each to RMO.50 each, by way of sub-division of the par value for each ofour existing ordinary share ofRMI.OO each.
(ii) Acquisition of HSB

On 28 September 2006, HHB entered into a conditional sale and purchase of shares agreement with the Vendors ofHSB for the acquisition of 15,681,997 ordinary shares ofRM1.00 each represeI:lting the entire issued and paid-up share capital of HSB for a total consideration of RMI23,700,000. The purchase consideration was wholly satisfied by the issuance of 242,311,996 new Shares at an issue price ofRMO.51 05 per HHB Share. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
5. INFORMATION ON OUR GROUP (Cont’d) The purchase consideration of RMI23,700,000 was arrived at based on a willing buyer­willing seller basis after taking into consideration the audited consolidated NTA of HSB as at 31 March 2006 of RMI26,052,558 and taking into consideration the dividends paid of RM2,352,300 in respect of the FYE 2006, computed as follows: RM  Audited consolidated NTA ofHSB as at 31 March 2006  126,052,558  Less:  Tax exempt dividend of 15% paid on 20 October 2006 in  (2,352,300)  respect ofthe FYE 2006  Adjusted audited consolidated NTA of HSB as at 31 March 2006  123,700,258
On 25 November 2006, HSB had entered into a sale and purchase agreement with Prayouth Sopitpongstom to dispose of its entire equity interest comprising of 800,000 ordinary shares of Baht 30 each in HTCL, for a cash consideration ofRMl,518,096. The Disposal of RTCL did not have any impact on the audited consolidated NTA of HSB as at 31 March 2006 and was computed as follows: RM  Purchase consideration for the Disposal ofRTCL  1,518,096  Less:  Audited NTA ofHTCL as at 31 March 2006  (1,302,996)  Consolidated adjustments made in the books of HSB  to  (215,100)  write-off the debts owing by HTCL to HSB*  Net impact to the audited consolidated NTA of HSB as at 31 March  2006
Note: As reflected in the books offISH as al 31 March 2006 * The consideration for the Disposal of HTCL of RMl,518,096 represents a premium of RM215,100 over the audited NTA of HTCL as at 31 March 2006. However, it will not have any impact on the audited NTA of the HSB Group as at 31 March 2006 as the premium will be set-off against the provision made in the books of HSB in respect of the amount owing by HTCL to HSB ofRM215,100 as at 31 March 2006. The disposal ofHTCL was completed on 14 December 2006. Further, on 18 December 2006, HSB declared an interim tax-exempt dividend of RM7,056,899 in respect of the FYE 2007. The dividend was paid to all the Vendors of HSB on 15 January 2007. The Acquisition ofHSB was completed on 7 May 2007. Subsequently, upon completion of the Acquisition of HSB, the Subscribers of our Shares had transferred a total of 4 Shares held by them to Kuan Kam Onn @ Kwan Kam Hon for a total cash consideration of RM2.00. On 9 January 2008, our Company declared an interim tax-exempt dividend ofRMI2,115,600 in respect of the FYE 2008. The dividend was paid to all the current shareholders ofHHB on 30 January 2008. 5. INFORMATION ON OUR GROUP (Cont’d) (iii) Offer for Sale and EES The Offerors will make an Offer for Sale of 24,210,000 Offer Shares representing approximately 9.99% of the issued and paid-up share capital of HHB at the offer price of RM1.80 per Share. Further, the Offerors will offer for sale 1,475,000 EES Shares or approximately 0.61 % of the issued and paid-up share capital ofHHB at the strike price ofRM1.80 per EES Share. Refer to Section 2.3 of this Prospectus for further details on the Offer for Sale and EES. (iv) Listing Upon completion of the abovementioned exercises, we shall seek the listing of and quotation for our issued and paid-up share capital ofRMI21,156,000 comprising 242,312,000 Shares on the Main Board ofBursa Securities. (v) Proposed Share Transfer After the completion of the Offer for Sale and EES, the Promoters and BTSB, being our substantial shareholders, proposed to transfer a total of 122,234,000 of our Shares held by them, representing approximately 50.4% of our total issued and paid-up share capital to HISB in order to consolidate their shareholdings in HHB, as follows: Name  No. of Shares held after the Offer for Sale and EES (‘000)  No. of Shares to he transferred to HISB pursuant to the Proposed Share Transfer (‘000)  Shareholdings in HISB %  Kuan Kam Hon @ Kwan Kam Onn (0) Kuan Kam Peng (D) Chow Siew Fong Wong Kin Seng@ Wong Kim Seng (D) Ching Hean Chong (D) BTSB  44,433 34,927 5,638 10,137 10,137 45,814  44,433 34,927 5,638 10,137 10,137 16,962  36.3 28.6 4.6 8.3 8.3 13.9  Total  151,086  122,234  100.0  % of the total Issued and paid-up share capital  62.4%  50.4%
Note: (D) Director ofHISS The Proposed Share Transfer will be completed upon the relevant Shares of the above shareholders being credited into the CDS account of HISB, which shall take place after the issuance of this Prospectus but prior to the Listing. 5. INFORMATION ON OUR GROUP (Cont’d) 5.4 Business overview 5.4.1 Our products Our Group is principally involved in the manufacturing of a wide range of gloves which can be summarised in the diagram and commentary as set out below: Manufacture of Latex Gloves T I  I  I  I  Natural Rubber Examination Gloves  Nitrile Examination Gloves  Nitrile Clean Room Gloves  Natural rubber Surgical Gloves  I  I
Chlorinated Powder Free  Polymer Coated Powder Free  Powdered
Powder Free  Powdered
Some of the product features and characteristics of our Latex Gloves can be su=arised as follows: 5. INFORMATION ON OUR GROUP (Cont’d) Types  Characteristics  Natural rubber Examination Gloves  • Adequate damp, wet and dry donning; • Anatomically reducing muscle fatigue; • Improved comfort; • Ambidextrous; • Pleasant smelling (specifically for Polymer Coated Gloves); • Soft feel and elasticity; • Good tactility; • Good tensile strength; • Puncture and tear resistance; • Chemical and solvent resistance; and • Different textured finishes including textured powder free gloves, and smooth surface for powdered gloves. • Easy donning due to its smooth interior; • Durability; • Resistance to punctures, tears and abrasions; and • Textured fingertips for good gripping.  Nitrile Examination Gloves
Types  Ch aracteristics  Nitrile clean room gloves  • • • • • • • • • • • • • •  Powder free; Good chemical resistance; Featured with static dissipative property; High tensile strength; Rolled cuff to prevent tearing while donning; Textured fmgertips for better grip; and Thin wall thickness provide excellent tactility. Adequate damp, wet and dry donning; Anatomically reducing muscle fatigue; Improved comfort; Soft feel and elasticity; Good tactility; Good tensile strength; and Puncture and tear resistance.  Natural rubber Surgical Gloves
The usage of Latex Gloves is highly diverse in a cross section of industry sectors including: Industry Sectors  Users  Hospitals  Surgeons, physicians, laboratory technicians, emergency room personnel, nurses, pathologists, paramedics, orderlies, intensive care unit personnel, physiologists  Nursing homes and hospices  Doctors, nurses, nursing aides  Social services  Volunteers, helpers, nursing aides  Private healthcare  Doctors and nurses  Dental clinics  Dental surgeons, orthodontists, dental nurses and oral hygienists  Research and scientific laboratories  Scientists, analysts and laboratory assistants  Food and beverage manufacturing  Factory workers  High technology manufacturing  Workers in clean rooms
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5. INFORMATION ON OUR GROUP (Cont’d) 5.4.2 Our principal markets As at 30 September 2007, our Group has an established base of 885 customers (FYE 2007: 981), which is spread across 18 countries, including Malaysia (FYE 2007: 24). Of these, 53 (FYE 2007: 56) are brand owners and intermediaries while 818 (FYE 2007: 911) are end-user customers namely, physicians’ offices and dental clinics, and 14 (FYE 2007: 14) are distributors for products under our own brand names. We wiU continue to focus on our existing customers who operate in various geographical areas and also reach out for new customers in other overseas markets including South America, Middle East, Russia, China and India. Our principal markets for the 6 months FPE 30 September 2007 comprised both local and export markets can be further segmented as follows:

USA Australia Brazil Canada France Germany Greece Hong Kong
Export Japan Korea Local Libya Netherlands Pakistan Switzerland
UK Ukraine Vietnam

5. INFORMATION ON OUR GROUP (Cont’d) For the 6 months FPE 30 September 2007 and the FYE 2007, our revenue contribution by countries can be depicted as follows: Revenue contribution by countries for the 6 months FPE 30 September 2007 Countries  Revenue contribution (%)  Australia  1.96  Brazil  3.51  Canada  2.62  France  0.07  Germany  7.01  Greece  0.07  Hong Kong  0.20  Japan  10.65  Korea  0.01  Libya  0.22  Malaysia  IA5  Netherlands  0.31  Pakistan  0.14  Switzerland  0.34  UK  1.22  Ukraine  OAI  USA  69.69  Vietnam  0.12
TOTAL 100.00
Revenue contribution by countries for the FYE 2007 Countries Australia Austria Brazil Canada Czech Republic France Germany Greece Hong Kong Iran Italy Japan Jordan Malaysia Netherlands Pakistan Sri Lanka Switzerland Tunisia Turkey UK Ukraine USA Vietnam Revenue contribution (%) 2.04 0.06 9.21 0.80 0.11 0.04 5.60 0.34 0.20 0.04 0.15 7.36 om 1.84 0.23 0.08 0.59 0.13 0.08 0.15 0.69 0.64 69A4 0.11 TOTAL 100.00
5. INFORMATION ON OUR GROUP (Cont’d) 5.4.3 Business Strategy Market Strategy Addressing Opportunities; Meeting Customer Needs
Operations Strategy Support Market Strategy; Ensure Profitability & Growth

R&D Our Group’s overall business strategy focuses on two platfonns: (i) External: Market strategy
(ii) Internal: Operations strategy

Our Group’s market strategy focuses on addressing opportunities in the global market and meeting the needs of customers. This is achieved through the manufacturing of Latex Gloves using both nitrile and natural rubber. Our Group’s operation strategy also focuses on providing the platfonn to support the market strategy and at the same time ensuring business growth and profitability. This is achieved through continuous cost reduction, productivity gains, quality improvement and product innovation made possible through R&D. (1) External: Market strategy In the Rubber Gloves industry, Latex Glove is the largest type of glove being produced globally and is primarily made of two types of materials, natural rubber or nitrile. The application of both natural rubber gloves and Nitrile Gloves is in many situations, similar. As such, the use of either natural rubber gloves or Nitrile Gloves is based on the preference of the end-consumers. Our Group’s market strategy is to manufacture products that will meet the bulk of what the market needs, namely natural rubber gloves and Nitrile Gloves. This allows our Group to accommodate the needs of consumers for either natural rubber gloves or Nitrile Gloves. In addition, producing these two main types of Latex Gloves in the global market provides the following benefits: (a) Product diversification to mitIgate any adverse perception towards one type of product. For example, our Group is able to offer customers Nitrile Gloves ifthey are concerned about protein allergy from natural rubber gloves. 5. INFORMATION ON OUR GROUP (Conl’d) (b) Raw material diversification to mitigate against raw material price increases. Nitrile is petroleum based while natural rubber is extracted from rubber trees. When the price of one raw material goes too high and customers are switching to alternatives, our Group is able to offer such customers choice of either natural rubber gloves or Nitrile Latex Gloves. (ii) Internal: Operations strategy Our Group’s operations strategy is based on supporting the market strategy, and at the same time ensures operational effectiveness and efficiency to ensure business profitability and growth. As such, our operations strategy, supported by R&D, is focused on the following four key areas: (a) Cost reduction Our Group continuously research and investigate areas and processes where we can make cost savings to enhance our competitiveness and at the same time maximise profitability. One major area of cost reduction is in energy cost saving. Our Group currently has 3 units of biomass heaters and intends to install the 4th biomass heater in the proposed 5th Plant to replace the use of diesel and MFO for heating purposes. This enables our Group to make significant energy cost savings. 3 of the biomass heaters were installed earlier and are current!y fully operational. With the use of our existing 3 units of biomass heaters and natural gas as alternative to diesel and MFO for heating purpose, our Group has been able to achieve energy cost savings. Further, in line with the protocol to the International Framework Convention on Climate Change with the objective of reducing greenhouse gases that cause climate change (“Kyoto Protocol”), our Group is expected to accumulate RM3.0 million carbon credits by the FYE 2009 as a result of using renewable energy through our 3 units of biomass thermal heaters which replaced gas thermal oil heaters for the production of hot air in our production process. (b) Productivity gains The manufacture of Latex Gloves can be very laborious if production lines are not automated. This is because the manufacture of Latex Gloves is in units of millions and for some larger companies, it is measured in billions of gloves. Automation -Robotic glove stripping system To maximise from productivity gains, our Group has designed and implemented a robotic glove stripping system. This has enabled us to increase productivity significantly. In contrast to some other automated stripping system that primarily uses a jet of air, the robotic glove stripping system is superior as the process is more accurate requiring less human intervention to rectify errors compared to the ai.i:-jet system. Our subsidiary, SEMSB, has filed a patent for the robotic glove stripping system as “Glove Remover”. 69 5. INFORMATION ON OUR GROUP (Cont’d) Automation -Glove puller and stacker system To further optimise on the production efficiency, our Group has designed and installed a glove puller and stacker system. After the robotic glove stripping system has completed the process of stripping the gloves from the formers, the glove puller and stacker system is designed to remove the gloves that are dangling from the tip of the formers and subsequently releasing the gloves in the same position onto the conveyor, thereby stacking and arranging the gloves in a manner where they are ready for packing. Our subsidiary, SEMSB, has filed a patent for the glove puller and stacker system as “Glove Singulator”. Double former dipping lines Our Group is currently using double former dipping lines which was created by our Group’s R&D division. The double former dipping lines allows our Group to double our capacity on a single production line compared to single former dipping lines, which is the industry standard. In addition, our Group is able to save cost by having one production line to produce 2 times more Latex Gloves in one production cycle compared to a single former dipping lines. By achieving this, our Group is able to have a smaller area production plant and less dipping lines yet achieve higher production output. Our subsidiary, SEMSB, has filed a patent for the double former dipping lines as “the arrangement and method of assembling former holders”. (c) Quality improvement The standard in quality in the manufacturing industry is so high that it is no longer a competitive advantage to have high quality product. Today, high quality product is the minimum requirement for business sustainability. Quality is even more critical in the Latex Gloves industry as the main function of Latex Gloves is to serve as a protective barrier to a whole host of unwanted materials especially pathogens. As such, our Group is constantly improving our products’ quality to ensure that they meet the highest standard of compliance and customer expectations. We have obtained many quality accreditations (as set out in Section 5.4. 12 of this Prospectus) to ensure quality is built into every step of our manufacturing and procurement process, which complies with various countries’ standards for Latex Gloves. (d) Product innovation Nitrile Gloves have become a popular alternative to natural rubber gloves because they can mimic the characteristics of natural rubber. In addition, nitrile is made by the compounding of different chemicals, and thus the characteristics of nitrile rubber can be easily improved and enhanced by creating different formulation to achieve the desired properties. Our Group’s R&D is capable of formulating our own nitrile latex with the desired properties and characteristics that meet the requirements of customers and industrial standards. 5. INFORMATION ON OUR GROUP (Cont’d) Our Group has developed a new formulation for elastic high stress retention Nitrile Examination Glove that has similar elastic properties as natural rubber glove and with higher sensitivity, better tactile feel, good chemical resistance and high elasticity. (e) R&D To support our operations strategy, we have our in-house R&D capabilities. Our R&D is focused in the areas of process improvement to ensure continuous cost reduction, productivity gains and quality improvement, product innovation and enhancement and automation systems to increase productivity and improve quality.
5.4.4 Seasonality Generally, there are no sharp contrasts in seasonality as our Group’s products are for general applications that are not tied to any seasonality factors.
5.4.5 Our competitive strengths Our Group has distinct advantages over our competitors in terms of the following areas: (i) Elastic high stress retention Nitrile Examination Gloves In the FYE 2005, our Group has successfully developed and subsequently commercialised a range of Nitrile Gloves that replicates the natural elastic properties of natural rubber gloves, namely elastic high stress retention Nitrile Examination Gloves which have approximately 55% stress retention properties compared to the average Nitrile Examination Gloves at 40%. Thus, the elastic high stress retention Nitrile Examination Gloves provide additional comfort and better fit to the user. This range of gloves was jointly developed with Microflex Corporation in the USA, a major customer of our Group and Microflex Corporation has been awarded and received the US Patent 7,176,260. Our Group, as the exclusive licenced manufacturer for the product had, on 20 June 2007, entered into an exclusive patent licence agreement with Microflex Corporation for the rights to manufacture this type of Nitrile Gloves for the duration of the patent, and the exclusive licence to sell this type of Nitrile Gloves to distributors, whose business is primarily in the acute healthcare market. The development and commercialisation of a new range of Nitrile Gloves is a demonstration of the product development capabilities of our Group which represents a significant differentiation and competitive advantage for us. (ii) Product quality The various ISO quality management systems accreditations of HSB and PAPL are endorsements of the quality assurance system that is in place for the manufacturing and procurement of Latex Gloves. These certifications provide customers with the assurance of our Group’s product quality. Furthermore, the stringent process of quality inspections and testing on the in-coming raw materials, the various stages of the production process and the final product is a further demonstration of our Group’s emphasis on product quality. 5. INFORMATION ON OUR GROUP (Cont’d) (iii) Compliance with international standards Compliance with the international quality standards is critical before the Latex Gloves are allowed to enter into the various countries of export. Our Group’s Latex Gloves conform to local and international standards including: (a) Acceptable Quality Level Standards under the FDA;
(b) ASTM;
(c) CGSB;
(d) BSI;
(e) JIS;
(f) SMG Programme;
(g) GMP; and
(h) TGA.

The compliance with the above standards is a demonstration of our Group’s ability to continuously manufacture Latex Gloves that can meet local and international standards and requirements. (iv) Wide market coverage Our Group has a wide market coverage, which extends to 18 countries including Malaysia for the 6 months FPE 30 September 2007 (FYE 2007: 24). The coverage of different markets provides our Group with the platfornl to optimise on business opportunities in the various countries. (v) Market reputation and established track record With approximately 19 years of experience (since the commencement of our Group’s manufacturing operations in 1988), we have established ourselves as a reputable manufacturer of Latex Gloves. Our Group’s established market reputation is substantiated by the fact that for the 6 months FPE 30 September 2007, approximately 9 of our top 20 customers have been dealing with our Group for 5 years or more (FYE 2007: 10). Out of the top 20 customers, 6 of them have been dealing with our Group for 8 or more years (FYE 2007: 6). The long-term customer relationship is a demonstration of customers’ loyalty that will provide the basis for business sustainability. (vi) R&D capabilities Our Group is constantly undertaking R&D to improve our products to better meet customer needs and address areas of opportunities. This requires the ability to keep abreast of developments in technology and process improvements as well as developments in latex compounding formulations to attain certain desired properties and characteristics such as tensile strength, elongation, permeation, chemical and solvent resistance, tactility, improved fit and comfort, and minimum protein content to meet the requirements of the markets and customers. Some of our Group’s R&D capabilities and achievements are demonstrated in the commercialisation of the following types of Latex Gloves: (a) Low protein Latex Examination Gloves;
(b) Polymer coated natural rubber Examination Gloves;
(c) Elastic high stress retention Nitrile Examination Gloves; and

5. INFORMATION ON OUR GROUP (Collt’d) (d) Damp don nitrile elastic high stress retention Surgical Gloves (which is expected to be commercialised in the FYE 2009). Our Group’s future R&D which is expected to be completed by the FYE 2009, comprised of the following: (a) Polyisoprene Surgical Gloves;
(b) Accelerator free Nitrile Gloves; and
(c) Industrial nitrile unsupported gloves.

The in-house capabilities to develop new products will provide the platform for our Group to address new market segments and business opportunities. (vii) Capabilities to manufacture both natural rubber and synthetic Latex Gloves Our Group has the in-house capabilities to produce both natural rubber and synthetic Latex Gloves with specialised properties to meet the market requirements of customers. The coverage of both types of materials allows our Group to provide our customers with the option ofbuying either natural rubber or synthetic Latex Gloves from our Group. In the 6 months FPE 30 September 2007, we produced approximately 35% and 65% of natural rubber and synthetic Latex Gloves respectively (FYE 2007: 57% and 43%) as compared to the total industry output for natural rubber and synthetic Latex Gloves in 2007 of approximately 80% and 20% respectively. Based on the industry output, it indicates that most of the other manufacturers focus on the production of natural rubber Latex Gloves, which gives us an added advantage compared to other manufacturers that mainly focus on producing natural rubber Latex Gloves. (viii) Ability to handle large volume Our Group manufactured approximately 2.6 billion pieces of Latex Gloves during the 6 months FPE 30 September 2007 (FYE 2007: 2.3 billion), which utilised approximately 77% of our production capacity (FYE 2007: 73%). This ability to handle large volume provides our Group with an added advantage over smaller manufacturers that are restricted in terms of capacity. Our Group has made significant investments in machinery and equipment including our own proprietary designed double former dipping lines as well as other equipment such as the centralised computer control system, robotic glove stripping system, glove puller and stacker system, online bar coding tracking system, online stacking system and biomass heaters. The extensive production facilities enable our Group to meet high volume demand as well as fast turnaround effectively and efficiently. (ix) Reduce energy cost Our Group continuously research and investigate areas and processes where we can make cost savings to enhance our competitiveness and at the same time maximise profitability. One major area of cost reduction is in energy cost saving. We currently have 3 units of biomass heaters and intend to install tbe 4th biomass heater in the proposed 5th Plant and supply of natural gas to replace the use of diesel and MFa for heating purposes. This has enabled us to make significant energy cost savings. 3 of the biomass heaters were installed earlier and are currently fully operational. 5. INFORMATION ON OUR GROUP (Conl’d) With the use of our existing 3 units of biomass heaters and natural gas as alternative to diesel and MFO for heating purpose, our Group has been able to achieve energy cost savings. Further, in line with the Kyoto Protocol, our Group is expected to accumulate RM3.0 million carbon credits by the FYE 2009 as a result of using renewable energy through our 3 units of biomass heaters which replaced gas thermal oil heaters for the production of hot air in our production process.
5.4.6 Marketing and distribution (i) Our marketing strategies Our Group’s sales and marketing arm utilises the following marketing strategies to sustain and expand our business: (a) Positioning ourselves as an established manufacturer of Latex Gloves that are innovative and of the highest standards ofquality;
(b) Continually providing excellence in customer service with the aim of developing a long-term business relationship;
(c) Continually providing the highest quality products and services to establish our reliability as a supplier, thus creating long-term customer loyalty and dependency;
(d) Keeping abreast of technology developments and new processes to stay ahead of competitors as well as better meet the needs and requirements ofcustomers; and
(e) Expanding our market presence overseas and developing new business opportunities by working in close partnership with existing customers.

As part of our strategy to promote our products, as well as identify new areas of opportunities, we also actively participate in trade shows and exhibitions by setting up a display booth to exhibit our Group’s products. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 5. INFORMATION ON OUR GROUP (Cont’d) As at 15 February 2008, our Group has participated in the following trade shows and exhibitions: Exhibitionsrrrade Shows Participated  Country  Date of Exhibitions  Arab Health  Dubai  2005 2006 2007  Hospitalar, Sao Paulo  Brazil  2004 2005 2006 2007  International Modem Hospital Show  Japan  2006  Medica Show  Germany  2004 2005 2006 2007  Hospital St Petersburg  Russia  2004  Korea International Medical & Hospital Equipment Show  Korea  2007
Our Group has our own sales and marketing team to focus on business development with existing and potential customers. As at 15 February 2008, we have 7 personnel under the sales and marketing division who are responsible for new business development. (ii) Our distribution channel Our Group’s distribution chalmel is based on direct and indirect distribution as follows:
End -users
Distributors Intermediaries Trading Houses Importers Our Group adopts a combination ofdirect and indirect distribution channel strategy. Our Group utilises direct distribution channel strategy through our own sales and marketing team to sell our products directly to end-user customers such as hospitals and medical centres. In addition to the sales and marketing department in our Group’s principal place of business, our Group has other sales and marketing offices in Kuala Lumpur, Australia and the USA. 5. INFORMATION ON OUR GROUP (Cont’d) Part of our direct distribution channel involves participating in open tenders or bids in hospitals which is undertaken by our overseas sales and marketing arms. The direct distribution strategy also has its advantages in enabling our Group to work closely with our customers to evaluate and attain a better understanding of our customers’ requirements, which serves as a feedback mechanism for continuous product and service improvements. We also use an indirect distribution strategy to reach a wider market overseas. This strategy enables our Group to utilise the existing network of intermediaries to expand our market coverage without the need for significant investments in marketing and logistics. Intermediaries are primarily major trading houses, major distributors and importers of Latex Gloves. These intermediaries would rely on their own distribution network to reach sub­distributors and end-users. The indirect distribution strategy applies mainly to the overseas markets.
5.4.7 Principal place of business and location of principal assets The following table sets out the location ofour Group’s operational facilities: Company  Approximate Built-up Area (square metres)  Purpose  Location of Production Facility andl or Offices  HSB  410 29,629 • < 34,410″  Office Factory and office building Factory (under construction) Factory (under construction) Factory (under construction)  C-G-9, Jalan Dataran SD I Dataran SD, PIU 9 Bandar Sri Damansara 52200 Kuala Lumpur H.S.(D) 7634, P.T. No. 6073 Mukim ofBatang Beljuntai Daerah Kuala Selangor, Selangor* G~ 130471,Lot3393 (Previously known as HS.(D) 1157, P.T. No. 2988) Mukim ofBatang Berjuntai Daerah Kuala Selangor Negeri Selangor * G~ 130470, Lot 3392 (Previously known as HS.(D) 1156, P. T. No. 2987) Mukim ofBatang Berjuntai Daerah Kuala Selangor Negeri Selangor * GRN 130469, Lot 3391 (Previously known as HS.(D) 1155, P.T. No. 2986) Mukim ofBatang Beljuntai Daerah Kuala Selangor Negeri Selangor *  SEMSB  #  Office  C-G-9, Jalan Dataran SDI Dataran SD, PIU 9 Bandar Sri Damansara 52200 Kuala Lumpur
5. INFORMATION ON OUR GROUP (Cont’d) Company  Approximate Built-up Area (square metres)  Purpose  Location of Production Facility and! or Offices  PUI PAPL  195 399 120  Office Warehouse Office  77530 Enfield Lane Building 1, Suite 203 Palm Desert CA 92211, USA 11516 Pagemill Road Dallas, Texas 75243, USA Levell, 2, Bridge Street Epping, NSW 2121 Australia
Notes: The proposed 4’1. and 5’1. Plants will be constructed on these pieces oflands. OurGrouphadsubmittedanapplication totherelevantauthority fortheamalgation oftheselands. As at to-date, we have yet to obtain the approvalfrom the relevant authority # Shared premises with HSB All the principal assets of our Group and production lines are located at No.7, Kawasan Perusahaan Suria, 45600 Batang Berjuntai, Selangor Darul Ehsan. 5.4.8 Production capacity Our Group’s production operations are supported by the following: (i) Extensive production facilities with 23 production lines, including automated robotic stripping system, air conduit delivery system and online bar coding tracking system;
(ii) In-house compounding and formulation of natural rubber and synthetic latex, which is key to the production processes; .

(iii) High capacity production lines, whereby our Group is capable of performing large volume production runs; (iv) In-house secondary processes including powdering, CWorination and polymer coating; and
(v) The 3 units of biomass heaters that reduce energy cost in our Group’s production operations.

We have 23 production lines of which 8 production lines were successfully installed and commenced operations between December 2004 and July 2006. These 8 production lines are highly automated incorporating programmable logic controller, which centrally monitors the temperature, line output and other critical functions, to ensure a stable and consistent production ofgloves. We have 3 units of biomass heaters utilising oil palm empty fruit bunches and palm kernel shells to generate power for the production plants. This enables our Group to achieve energy cost savings. Our Group intends to instaIl the 4th biomass heater in the proposed 5th Plant. 5. INFORMATION ON OUR GROUP (Cont’d) The online bar coding tracking system enables our Group to monitor and track the products, information stored in the barcode include production time and date, source of production line, and quality control data. Our Group’s online packing system includes glove stacking machines and conveyor systems for automated bar coding process, printing and transferring ofgoods. The following table sets out our Group’s production, capacity and utilisation of facilities for the FYE 2007: Type of products  < —————FYE 2007 —————–>  Annual Capacity (‘000 Pieces)  Production Output. (‘000 Pieces)  Percentage Utilisation (%)  Latex Gloves  3,189,840  2,313,035  73
Note: Production output is 24 hours per day and 365 days per year We are currently installing 10 new production lines in the proposed 4th Plant. In July 2008, we will be commencing the construction of the proposed 5th Plant, which will be fully operational by the FYE 2010. The proposed 5th Plant will have an additional 10 production lines. In total, the 20 new production lines from the proposed 4th and the 5th Plants will provide our Group with an additional capacity of approximately 6.0 billion pieces of gloves per year or approximately 182% additional capacity from our present capacity of approximately 3.3 billion pieces of gloves. Our Group has not experienced any constraints in our production! operating activities.
5.4.9 Technology used or to be used Our Group uses the following technologies in our manufacturing operations: (i) Dip moulding technology The dip moulding technology refers to the manufacturing process where a series of moulds or formers are dipped into natural or polymer latex for dip moulding or dip coating. Dip moulding involves the lowering of a former or mould into a polymer bath, attracting a liquid thin film deposition onto the formers or moulds after raising from the bath. The film is dried after various processes for subsequent removal from the, formers. This dip moulding process is commonly used to manufacture Latex Gloves. Generally, there are 2 types of dip moulding lines, Le. hatch indexing and continuous chain systems. (a) Batch indexing system Formers or dipping moulds are mounted onto pallets and moved intermittently, normally on a consistent time cycle to each machine station. At the dipping station, the pallets move over the tank and the pallet is dipped producing multiple dipped products on a single system.

5. INFORMATION ON OUR GROUP (Cont’d) (b) Continuous chain system Fonners or dipping moulds are mounted on multiple or individual fonner racks and attached to a continuous moving conveyor chain. The lines move continuously at a constant speed, carrying fonners through dip tanks, ovens, and associated process stations. Our Group utilises the continuous chain system for our manufacturing operations. In addition to the main latex dip, there are other tanks or steps employed on the entire production line to produce finished products, including form cleaning stations, leaching tanks, powder application stations, mould release stations, coagulant tanks, coatings, texturing, cooling stations and ovens. (ii) Powder free technology Conventionally, powder has been used to facilitate the release of gloves from formers during glove forming and also to aid glove donning. Commonly, powder free technology involves either Chlorination or polymer coating, or a combination of both. (a) Chlorination Chlorination is a process where chlorine, ammonia, water and other chemicals are used to oxidise the outer rubber surface to reduce the surface tackiness and also removes most of the powder deposited on the outer glove surfaces. In addition, gloves are made from natural rubber or synthetic materials with a relatively high degree ofsurface friction that are not possible to don. As such, gloves can be chlorinated to form a non-tacky smooth surface that allows ease of donning, therefore negates the requirement to add a powdered lubricant. Our Group utilises the Chlorination process to attain desired properties and characteristics in gloves such as powder free and low protein content. (b) Polymer Coating Currently, our Group also employs polymer coating technology to manufacture powder free Latex Gloves. Polymer can be applied either to the outer surface of the glove or to both inner and outer surfaces. This process will give the glove additional barrier protection and also adds strength to Latex Gloves to reduce tearing or ripping while in use and gives the glove better wet or dry grip properties. Technically, polymer coating is designed to meet the following requirements: • adhere to the underlying natural rubber latex substrate and offer durability and good donning characteristics; and
• resistant to Chlorination and the other post-forming processes include rinsing, extraction and drying.

5. INFORMATION ON OUR GROUP (Cont’d) Our Group mainly uses acrylic polymer and hydrogel in our polymer coating process to laminate a layer ofpolymer onto the inner and outer surface ofthe glove. We also use composite coating such as polyurethane and polymer blends as and when required as an anti-tack agent and to facilitate ease ofdoning. Acrylic coatings are based on acrylate polymers that have elastic properties. Acrylice monomers with a wide range of property variations can provide excellent adhesion to different glove substrates and change the polarity of the polymer to facilitate wet and dry hand donning. (iii) Latex compounding technology Latex compounding is a process to ensure uniform mlxmg of compounding ingredients whereby natural rubber or synthetic latex is mixed with other additives to create desired physical and mechanical properties and characteristics before being used for further processes. Some of the main additives used in compounding include sulphur, zinc oxide, accelerators, pigments and solid antioxidant dispersions. Commonly, accelerators are used to shorten the time set and increase the rate of hardening or strength development of the glove. (iv) Leaching technology In general, leaching process is widely used within the dip moulding industry, especially for the manufacture of Latex Gloves. Leaching process is a process to remove hydrophilic materials by washing them in water. There are 2 ways to undertake the leaching process: (a) Wet gel leaching (also known as pre-vulcanisation leaching) Wet gel leaching involves the immersion of latex coated formers or moulds into a bath or spray water to wash out and remove excess chemical residue and latex protein with hot water from the surface of the glove. At this stage, chemicals and protein can be reduced and the effectiveness of this process is dependent on the temperature of the water, duration ofthe process, and the rate ofthe water exchange. The amount of hot water flow per hour (gallon per hour) in the leaching tanks must also be optimised to take away as much chemicals and protein from the latex gel as possible. In general, the leaching bath must be kept at a constant temperature of 70o±5° centigrade. (b) Dry-mm leaching (also known as post-vulcanisation leaching) As for dry-film leaching, the process is similar to the wet-film leaching, with the exception that it is carried out on the dry or vulcanised latex film. After vulcanisation, the formers then pass through a series of post-vulcanisation leaching tanks to remove more latex protein and chemical residue. Our Group currently utilises wet-gel leaching and dry-film leaching. (v) Vulcanisation technology Vulcanisation is the process where the latex film is heated and the combination of sulphur, accelerator and heat causes the cross-linking of rubber, giving strength and elasticity to the film. 5. INFORMATION ON OUR GROUP (Cont’d) Natural rubber without undergoing vulcanisation will eventually become too brittle in cold weather or become sticky in hot weather. Without vulcanisation, the rubber molecules could easily flow and slide pass each other at elevated temperature making the rubber soft when it is in the heat while in the cold it will crystallise resulting in an increase in stiffness and brittleness. Vulcanisation commonly takes place under the following 2 stages: (a) Pre-vulcanisation
(b) Post-vulcanisation

Pre-vulcanisation involves the process where the formers are passed into the oven to remove moisture and the latex gel hardens to form into Latex Gloves prior to the post-vulcanisation leaching process. During the pre-vulcanisation process, the latex molecules of the rubber particles are chemically cross-linked. However this would not affect the rubber particle size, shape, particle size distribution, and will retain its original fluidity and colloidal property. Formulation of chemicals can be designed to achieve different types of degree of cross-linked and ultimately provides the rubber with different characteristics including high heat resistance, sterilisation resistance, low nitrosamine and others. At this stage, the deposits on the formers are partly dried at a relatively low temperature such as 800 to900centigradebeforethefinal vulcanisation. Subsequently, the formers then pass through another post-vulcanisation process, which is normally carried out at the temperatures of 1100 to 1200 centigrade in a cure oven. The following are some ofthe advantages ofthe vulcanisation process: (a) Longer shelflife;
(b) Low residual chemicals;
(c) Low toxicity; and
(d) Better efficiency in leaching.

Our Group currently utilises both pre-vulcanisation and post vulcanisation processes in our manufacturing operations. (vi) Elastomerisation technology Natural rubber and nitrile rubber must have the capability to return to its original state when a load such as stretching is removed. This is an important property for Rubber Gloves as load is applied to the glove during donning, after which the glove must return to its original state so as to fit the hand. Natural rubber contains natural elastomer that provides the elastic property. However, for nitrile rubber, it requires adding chemicals to provide it with the critical elastic property. The key to elastomerisation in Rubber Gloves are as follows: • Stretch limit (before it breaks or tear); and
• Duration of return to its original shape after stretching.

As such the application of elastomerisation technology through the formulation of nitrile latex is critical in the development ofa qualityNitrile Gloves that meets the needs ofconsumers. 5. INFORMATION ON OUR GROUP (Cont’dj (vii) Polymer science and technology Natural rubber and synthetic rubber-like nitrile, is made up of long chains of molecules that give them their respective properties and characteristics. These long molecule chains are called polymers which literally means many “mers” or units. The ability to form or break the chain, or change the composition of the chain requires significantunderstandingandapplication ofpolymerscienceand technology. Understanding the molecular structure through the application of polymer technology enables manufacturers to discover new materials or obtain new characteristics and properties that may be useful for consumers. As such, R&D incorporating polymer science and technology is crucial in Latex Gloves innovation and enhancement. (viii) Automation system-robotic glove stripping system Conventionally, manpower is required to remove the Latex Gloves from the formers in which improperly removed Latex Gloves may cause damage to the gloves. The highly manual process of stripping has compelled many manufacturers to seek automation in the stripping of Latex Gloves. To this end, the industry has developed an air-jet system that removes gloves using a powerful jet of air. This is currently the common industry technology for the removal of gloves from formers. Our Group has designed and is currently using a robotic glove stripping machine which is more effective and efficient compared to human stripping as well as air-jet stripping. In addition, the robotic glove stripping machine is able to handle large volume. The robotic glove stripping machine uses a combination of air pressure and mechanical movements controlled by electronics to emulate the human arm in removing the Latex Gloves from the former. A clear understanding and application of robotics is necessary to ensure the proper design and fabrication of a robotic glove stripping machine. (ix) Automation system-glove puller and stacker system After the robotic glove stripping system has completed the process of stripping the gloves from the formers, the glove puller and stacker system is designed to remove the gloves that are dangling from the tip of the formers and subsequently releasing the gloves in the same position onto the conveyor, thereby stacking and arranging the gloves in a manner where they are reading for packing. Normally, this process would require manual labour to strip the glove completely from the formers. The glove puller and stacker system is mechanically driven and consist of multiple gripping apparatus to grip and remove the gloves. Additionally, the machine is designed with precision capabilities to drop the gloves into the same position on the conveyor to form a stack for packing. For quality control, the machine has a counter clock to keep track of the number of gloves for each stack.
5. INFORMATION ON OUR GROUP (Cont’d) 5.4.10 Manufacturing process The process flow for our Group’s manufacturing plants is set out in the diagram and commentary as follows: ————————,————————~ ,———————–­Sub-processes of l: Sub-processes of i! Sub-processes of Powder Free : : Powdered :: Polymer Coated latex Gloves : : latex Gloves :: Powder-Free ” .:: :! Latex Gloves
Pre-shipment Inspection and Delivery ,’ ,’ ,’ ::
pa;ing ,’ ,’ ,: ” ” Main Processes ,,
:’ ” ‘ ” ‘ il”” ::”II ” Ii ” ” ” Powdering (Calcium Carbonate) ” ” ” ‘: “” ” ::”” ” “””” ” ” ———————–_: ‘.———————–~ ‘—————­__ ……. Process flow for Polymer Coated
——. Common Process flow Powder Free Latex Gloves ……………….. Process flow for Powder
====.. Process flow for Powdered Free Latex Gloves Latex Gloves 5. INFORMATION ON OUR GROUP (Cont’d) (i) Incoming raw materials supplied by the suppliers are recorded and checked to make sure the materials comply with the orders before it is stored for usage in the production line.
(ii) Formers, which are hand shaped moulds in the Latex Glove production line, are put through a cleaning process to make sure that there are no residues or dust left behind from the previous glove production cycle.

(iii) The formers are then rinsed in hot water before being passed through Oven A for drying. (iv) Once the formers are clean and dry, they are dipped into liquid coagulant. The coagulant will facilitate in the coagulation of the latex in the following process in the production line.
(v) The coated formers are then passed through Oven B for drying, fonning an even and uniform deposit of coagulant.
(vi) The formers are then dipped into liquid latex, creating a thin even film oflatex or latex ‘skin’. The coated coagulant on the formers helps to convert the liquid latex film into a wet-gel on the former.

(vii) This is followed by the formers being passed through another drying process in Oven C to provide sufficient heat to firmly gel and solidify the latex ‘skin’ for the following production processes. (viii) Beading is then carried out on the formed latex ‘skin’ or gloves on the formers. Beading is a process whereby the rim at the open end of the formed latex gloves is rolled to strengthen the cuff of the Latex Gloves and to enable the gloves to be put on or donned easily. (ix) The formers proceed through another drying process in the Pre-drying Oven prior to the Leaching Process.
(x) The formed gloves on the former are then passed through a Leaching Process. This process is whereby hot water is used to remove residue and excess additives on the newly formed gloves. The process also improves the physical properties of the gloves, such as its resistance to water absorption and provides aging.
(xi) The Latex Gloves proceed to the Main Oven where vulcanisation and drying take place.

(xii) Subsequently, the vulcanised gloves pass through the post Leaching Process to further reduce the protein and residual chemicals. Sub-Processes of Powder Free Latex Examination Gloves (i) For the manufacture of Chlorinated Powder Free Latex Examination Gloves, the formed Latex Gloves are dried in the Main Oven following the leaching process. The formers then proceed through a post leaching process. This process washes away soluble latex proteins, latex film and other chemical residues from the dried gloves.
(ii) The gloves on the formers then undergo a Chlorination Process. This process provides for a slippery effect on the surfaces of the Latex Gloves.

(iii) The chlorinated gloves are then rinsed and passed through a blower before they are sent for final drying in Oven D. (iv) The formed gloves then proceeds to the Glove Stripping Process whereby the formed Latex Gloves are stripped from their mould or formers. 5. INFORMATION ON OUR GROUP (Cont’d) (v) The finished product goes through Quality Assurance and Quality Check Inspection before it is sent for packing.
(vi) The packed gloves finally go through a Pre-Shipment Inspection before delivery or shipment to customers.

Sub-Processes of Powdered Latex Examination Gloves (i) Powdered Latex Gloves require a Powdering Process using Cornstarch following the Post Leaching Process. The powdering process provides a layer of lubricating material on the surfaces of the gloves to prevent the glove from sticking to the former and for easy donning.
(ii) The powdered gloves are then sent for a fmal drying process in Oven D following this process.

(iii) The formed gloves then proceeds to the Glove Stripping Process whereby the formed Latex Gloves are stripped from their mould or formers. (iv) The finished product goes through Quality Assurance and Quality Check Inspection before it is sent for packing.
(v) The packed gloves finally go through a Pre-Shipment Inspection before delivery or shipment to customers.

Sub-Processes of Polymer Coated Powder Free Latex Examination Gloves (i) Polymer Coated Natural Rubber Gloves undergoes a separate process called polymer dipping prior to the drying of the polymer-dipped gloves in the Main Oven.
(ii) Following the drying process in the Main Oven, the polymer-dipped gloves undergo a Post Leaching Process before a Powdering Process utilising Calcium Carbonate powder. Calcium Carbonate is used as a lubricant for the easy release of the gloves from the former.

(iii) The gloves are then dried in Oven D before proceeding to the Glove Stripping Process whereby the formed latex gloves are stripped from their mould or formers. (iv) Subsequently, the Latex Gloves go through the Post Treatment Process to remove all Calcium Carbonate powder and mildly chlorinate the outside the gloves before going through Quality Assurance and Quality Check Inspection.
(v) The gloves are then packed and ready for the Pre-Shipment Inspection before delivery or shipment to customers.

I Company No. 741883-X I 5. INFORMATION ON OUR GROUP (Con/’d) 5.4.11 Raw materials Following are the major types of raw materials, finished products and other input materials purchased by our Group during the FYE 2007 and the 6 months FPE 30 September 2007 for our manufacturing and trading operations: FYE 2007  6 months FPE 30 Septemher 2007  Value of  Proportion of  Sources of Supply  Value of  Proportion of  Snurces uf Snpply  Purchases  Purchases  Local  Import /I  Purchases  Purchases  Local  Import’  (RM’OOOj  (%j  (%j  (%j  (%j  (‘!oj  (%j  (%j  Raw materials operations  for  manufacturing  126,950  91.3  54.3  45.7  67,859  91.4  44.8  55.2  Natural rubber latex  56.451  40.6  81.6  18.4  19,281  26.0  89.8  10.2  Nitrile latex  44,658  32.1  – 100.0  34,713  46.7  – 100.0  Chemicals”  16,738  12.0  82.4  17.6  8,822  11.9  91.5  8.5  Packaging  9,103  66  100.0  .  5,043  6.8  100.0  – Energy Fuel  11,667  8.4  100.0  .  6,163  8.3  100.0  – Biomass Waste, Fuel and Natural Gas  11,667  8.4  100.0  – 6,163  8.3  100.0  – Finished products operations  for  trading  404  0.3  – 100.0  251  0.3  – 100.0  Vinyl Gloves  404  0.3  – 100.0  251  0.3  – 100.0  Total purchases  139,021 .  100.0  28.0  no  74,273′  100.00  26.0  74.0
Notes: ,  Includes polymer, cleaning agent acid, calcium nitrate/salt. powder, pigment (yellow/blue) and direct chemicals Includes purchasesfrom stockists Our Group’s total purchases ofmain raw materials, finished products and other input materials excluded electricity and other consumables  86
5. INFORMATION ON OUR GROUP (Cont’d) 5.4.12 Quality and control Our Group places significant emphasis on product quality and adheres to stringent quality standards. This is reflected by the fact that, our subsidiaries, HSB and PAPL, are accredited with the following quality management systems by international bodies: Company  Accreditation  Accreditation Body  Certificate Validity Period  HSB  ISO 13485:2003  TUV America Inc  1 April 2005 to 28 February 2008*  EN ISO 13485:2003  TUV Product Service GmbH  9 August 2006 to 28 February 2008*  ISO 9001:2000  TUV Management Service GmbH  9 August 2006 to 28 February 2008*  Medical Devices Directive (MDD), Council Directive 93/42/EEC  TUV Product Service GmbH  8 August 2006 to 7 August 201 I  Certificate No. G  TUV Product Service  5 April 2007 to  1070455298005 under  GmbH  7 August 20 I I  Medical Devices Directive  (MDD), Council Directive  93/42/EEC  Approval certificate no. 2013 under SMG 2nd revision (ISBN: 983-2088­03-8)  MRB  27 September 2007 to 26 September 2008  Approval certificate no.  MRB  28 September 2007 to  10 I0 under SMG 2nd  27 September 2008  revision (ISBN: 983-2088­ 03-8)  PAPL  ISO 9001:2000  SAl Global  3 January 2006 to 2 January 2009
Note: As at 15 February 2008 (being the latest practicable date prior to the issuance ofthis Prospectus). the relevant accreditation bodies have conducted audit on HSB and HSB is currently awaiting the issuance ofrenewed certificates by the relevant accreditation bodies Our Group has an experienced QA team to closely monitor our manufacturing processes. As such, proper implementation and compliance with quality control is reflected in the quality of our manufactured products. Our Group adopts stringent QA approaches to ensure that certain quality standards are maintained internally: (i) Testing and evaluation analysis of incoming raw materials prior to the production;
(ii) Conduct quality checks at each level ofproduction process; and

(iii) Conduct various testings and inspections on randomly selected finished products to ensure that they adhere to the standards in the respective countries of export. 5. INFORMATION ON OUR GROUP (Con/’d) As at 15 February 2008, our Group has an experienced QA team of 133 personnel who are focused on ensuring the product quality meets the specification ofour customers. 5.4.13 R&D (1) Our policies OD R&D R&D plays an important role in creating and sustaining competitive advantages through the following: (a) Continuous improvements on existing products to ensure customer satisfaction;
(b) Developing new products to address new areas of growth and opportunities; and
(c) Continuous improvements in manufacturing processes to increase production output and efficiency.

Through R&D, our Group aims to realise the following benefits: (a) Sustain and grow the business through the development of new and improved products;
(b) Increase revenue and profitability by increasing new market segments; and
(c) Lower cost of production through improved manufacturing processes, optimal use of automation and machine integration.

(ii) Our R&D facilities and personnel Our Group has the in-house R&D facilities to undertake activities including improvements in formulation, testing of the finished products and the level of protein content Our Group’s R&D laboratory and testing equipment are as follows: (a) Auto-clave
(b) Centrifuge
(c) Electronic weighting scale
(d) Fume cupboard
(e) Micro plate reader
(f) Moisture balance
(g) Oven
(h) Spectrophotometer
(i) Tensile machine
(j) Water-tight test machine
(k) Air-tight test machine
(I) R&D glove dipping robot

5. INFORMATION ON OUR GROUP (Cont’d) Further, our Group has laboratory facilities that carry out several functions, which are categorised as follows: Facilities  Functions  Main testing laboratory  • Material evaluation and testing; • Formulation improvement and development; • Laboratory simulation of process improvement; • Verification and validation testing to confirm conformance to regulatory and customer requirements; and • Cost improvement activities. • Testing ofphysical properties; and • Stress retention testing to comply with the minimum standards and requirements of the industry. • Protein testing, moisture testing and microbiological testing, to determine the compliance with the standards required particularly for Examination Gloves in the medical industry.  Physical properties testing and conditioning laboratory  Protein and microbiological laboratory
Our Group commenced simulation of the glove dipping process using our R&D glove dipping robot in the FYE 2007. The main objective of the R&D glove dipping robot is to deveiop samples on new products and reduce manpower. The R&D robot may be used for: (a) carrying out simulation on various input parameters for each processes;
(b) high robotic movement precision which allows the simulation to achieve accurate results; and
(c) eliminating human test errors as it is fully automatic.

As at 15 February 2008, we have 7 R&D personnel. Our R&D division is headed by Mr Kuan Eu Jin, who has approximately 14 years of experience in the Latex Gloves industry. (iii) Our achievements in R&D Our Group has successfully developed and commercialised our in-house manufactured products and is currently reflected in our products portfolio. Our achievement in R&D includes:
(a) Developed and commercialised a range of Latex Gloves with different features and characteristics. 89 5. INFORMATION ON OUR GROUP (Cont’d) (b) Developed a range of latex compounds including natural rubber and synthetic latex for in-house production of Latex Gloves.
Compounding is the process of formulation of various addictives with latex to provide the desired specifications.
(c) Implemented various process improvements including automation which are then integrated into our production lines. Some of the improvements implemented are:

Programmable logic controller is a programmable system whereby the production lines are controlled by a centralised computer which enables us to have better control on the entire production processes to maintain consistency in the quality ofour final products; Online monitoring system that runs on SCADA computer system is used to monitor the production parameters of the entire production lines which allows real time monitoring so that a problem can be rectified immediately when an error occurs; Robotic glove stripping system, which mmUllises the need for product handling and reducing the level of defects from manual stripping. Currently, our Group utilises the pressure of compressed air to strip the gloves from the formers; Online bar coding tracking system that enables our Group to monitor and track the products. Information that is stored in the barcode includes production time and date, sources of production line, and quality control data; Our Group is currently using double former dipping line which was created by our Group’s R&D. The double former dipping lines allow our Group to double our capacity on a single production line compared to single former dipping line, which IS the industry standard; and In addition, our Group has also installed a glove puller and stacker system, which is designed to remove the gloves that are dangling from the tip of the formers and subsequently releasing the gloves in the same position onto the conveyor, thereby stacking and arranging the gloves in a manner where they are ready for packing. As the designs of the double former dipping lines, the robotic glove stripping system and the glove puller and stacker system are proprietary to our Group, patents have been filed under our subsidiary, SEMSB. (d) Achieving beyond the minimum Acceptable Quality Level (AQL). The standard practice for sampling the Examination Glove and Surgical Glove based on AQL is set by the ASTM. Quality of Examination Glove and Surgical Glove based on AQL level is regulated by the FDA whereby the acceptance criteria are mainly based on inspection of visual defects and water leak test. According to the FDA, as manufacturing capabilities improve, the minimum AQL are consistently reviewed and revised at a lower acceptance level hence the quality standard becomes more stringent. 5. INFORMATION ON OUR GROUP (Cont’d) Our Group outperforms the AQL level benchmarks set by both the FDA and ASTM, which are as follows: Minimum AQL Benchmark  Examination Gloves  Level  Our Group’s AQLLevel* FDA  ASTM  4.0  2.5  1.5  Surgical Gloves  2.5  1.5  1.0
Note: AQL level is in percentage ofdefects at a given number of samples. hence lower AQL level shows a lesser number ofdefects (iv) On-going R&D Our Group is committed to undertake continuous process improvements particularly in enhancing our manufacturing processes such as, increase automation, modifying existing processes to increase output and increase costs savings by effectively using bio-waste as fuel and heating purposes. This is critical as it has direct impact on manufacturing efficiency, effectiveness and productivity which provides the following advantages to our Group: Improve cost competitiveness; Increase output; and Improvements in product quality. The R&D activities on our Group’s manufacturing processes are continuous and improvements will be implemented on an on-going basis. Some of the quantifiable achievements in productivity and cost savings as a result of our Group’s improvements in manufacturing and operation processes including automation systems are as follows: Processes! Automation Systems  Our GrouD  Conventional  Improvements in the design of the foroler dipping lines  30,000 pieces per machine!hour for our Group’s double former dipping lines  13,000 pieces per machine!hour for single former dipping lines  Automation in the glove stripping process  7,500 pieces per machine! hour for our Group’s robotic glove stripping system  1,500 pieces per manlhour for manual glove stripping
With the use of the 3 units of biomass heaters and natural gas as alternative to diesel and MFO for heating purpose, our Group has been able to achieve energy cost savings. 5. INFORMATION ON OUR GROUP (Cont’d) (v) R&D in future Our Group is currently undertaking R&D activities, all of which are expected to be completed by the FYE 2009, to develop a range ofnew products, which include: (a) Polyisoprene Surgical Gloves
Our Group plans to undertake R&D activities to develop a new range of synthetic Surgical Gloves namely Polyisoprene Surgical Gloves. Polyisoprene has characteristics that are similar to natural rubber such as strength, puncture resistance and comfort fit but does not contain any proteins like natural rubber.
(b) Accelerator free Nitrile Gloves

Our Group plans to develop accelerator free Nitrile Gloves for use in medical, dental and industrial applications. The intention of producing Nitrile Gloves that are free of accelerators is to eliminate the chemical allergic reactions and concerns associated with using accelerators. Furthermore, Nitrile Gloves do not contain proteins like natural rubber. (c) Industrial nitrile unsupported gloves Our Group plans to develop customised industrial nitrile unsupported gloves. Nitrile unsupported gloves are aimed at providing protection against abrasion, puncture, cut or snag, as well as resistance against chemicals and solvents. We believe that there are opportunities to provide customised Latex Gloves depending on the applications and specifications of customers. .(vi) R&D expenditure Our Group’s R&D expenditure for the past 3 FYE 2005 to 2007 and the 6 months FPE 30 September 2007 are as follows: 6 months  FPE30  FYE  September  2005  2006  2007  2007  RM’OOO  RM’OOO  RM’OOO  RM’OOO  R&D capital expenses  1,048  1,077  177  83  R&D operating expenses  204  194  185  152  Total R&D expenses  1,252  1,271  362  235  Revenue  109,579  160,275  240,915  137,563  Total R&D as a proportion  1.1  0.8  0.2  0.2  of total revenue (%)
5. INFORMATION ON OUR GROUP (Cont’d) 5.4.14 Intellectual property rights (i) Brand names Being mainly an OEM, our Group is also an original brand manufacturer of Latex Examination Gloves, which are marketed under our own brand names as follows: Brand Names  Typ e of Products  Pharmatex  • • •  Natural rubber powder free polymer coated Examination Gloves Natural rubber powdered Examination Gloves Nitrile powder free Examination Gloves  Itmova  • •  Natural rubber powder free polymer coated Examination Gloves Nitrile powder free Examination Gloves  CRAFT  • •  Natural rubber powdered Examination Gloves Nitrile powder free Examination Gloves (high stress)  Elastik  LowPro A  •  Latex Gloves  Bio-flex.  •  Natural rubber powdered Examination Gloves and natural rubber powder free polymer coated Examination Gloves
Notes: • Only allowed to be sold outside ofthe USA Have not started selling any products under this brand name Our Group manufactures third party brands or principals’ brands based on customers’ specifications and requirements under inter-alia, the brand names of “Sensicare”, “Evolution One”, “Diamond Grip”, “Synetron”, “Verle” and “Freeform”. For the 6 months FPE 30 September 2007, revenue for the manufacturing of third party or principals’ brands accounted for 94.9% of our Group’s total revenue (FYE 2007: 95.6%) and the remainder 5.1 % (FYE 2007: 4.4%) is contributed by our Group’s own brands. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
5. INFORMATION ON OUR GROUP (Cont’d) (ti) Patents and patent licence agreement Patents Our Group has filed patents with the authorities for the following machinery and systems, and processes: Technology  Country  Patent application  No.  Invention  Double Former Dipping Line  Malaysia Patent Corporation Treaty (“PCT”)’ China India Indonesia Vietnam  PI PCT/S2005 I084/De1NP/2007 WOO 1-2 2004 2773 G2005/000227 80030535.2 2007 00424 007-00307  The arrangement and method of assembling former holders  Robotic Glove Stripping System  Malaysia  PI  2005 4989  Glove Remover  Glove Puller and Stacker System  Malaysia Thailand  PI 07 2006 4405 01004109  Glove Singulator
Note:  *  Patent Cooperation Treaty (peT) allows filininvention simultaneously in several countries. adhered to the per  g of “international” patent application to protect an As at 1 October 2006, there were 133 countries that
Patent licence agreement In the FYE 2005, our Group has, together with Microflex Corporation, USA, our major customer, successfully developed and commercialised a range ofNitrile Gloves that replicates the natural elastic properties of natural rubber gloves namely, elastic high stress retention Nitrile Examination Gloves. Micoflex Corporation has been awarded and received the US Patent RE 7,176,260for thistype ofNitrileGloves. A patent licence agreement was entered into by our wholly owned subsidiary, HSB, with Microflex Corporation on 20 June 2007 wherein Microflex Corporation agreed to grant to HSB the exclusive rights to make, use, distribute, sell and offer to sell this type of Nitrile Gloves to distributors, whose business is primarily in the acute healthcare market, with the express written consent of Microflex Corporation and/or its affiliates, the right to use, distribute and sell such Nitrile Gloves purchased from HSB (“Agreement”). The salient terms of the Agreement are as follows: (a) The licence granted to HSB under the Agreement shall be effective for the term of the licenced patent beginning on 20 June 2007 (being the effective date of the Agreement) or for 5 years from 20 June 2007, whichever period is longer;
(b) HSB shall pay Microflex Corporation royalties at the rate of USDO.60 per 1,000 gloves for customers approved through the date hereinabove written. Thereafter the parties will mutually agree upon the royalty to be paid;

s. INFORMATION ON OUR GROUP (Cont’d) (c) The Agreement may be terminated by either party in the event the other party materially breaches this Agreement (including non-payment of any amount when due and failure of HSB to produce gloves within the scope of the licenced patent), which breach is not remedied within 30 days after written notice of such breach has been delivered to the defaulting party; and
(d) Microflex Corporation and HSB agree that Microflex Corporation shall not licence third parties the right to make and sell the Licenced Products (as therein defined) without prior agreement from HSB, which approval shall not be unreasonably withheld. The parties agree that such agreement will include a mutually agreeable royalty shared between Microflex Corporation and HSB. Microflex Corporation reserves the right to manufacture products for its own inventory at any facility it chooses.

(iii) Trademarks Our Group has the following trademarks as stated below: Trademark  Countries  Trade mark No.  Next Renewal Date  Class  Description of Goods under Trademark  BID-FLEX  Mexico  196358  15 Apr 2014  10  Latex examination and surgical gloves  LOWPRO  Japan  4009382  6 Jun 2017  10  Gloves for medical purposes  Germany  2053432  310ct20l2  10  Surgical gloves and latex examination gloves  Italy  F192C/868  3 Nov 2012  10  Gloves for medical and surgical use  Japan  4002777  23 May 2017  10  Gloves for medical purposes  PHARMATEX  Switzerland  401.364  29 Oct 2012  10  Gloves for surgical and medical purposes including latex examination gloves  Australia  969344  9 Sept 2013  10  Medical Examination Gloves  New Zealand  70II87  9 Sept 2013  10  Medical Examination Gloves  ELASTIK  European Community  5203823  30 June 2016  10  Dental apparatus; gloves for massage; gloves for medical purposes; surgical apparatus and instruments
5. INFORMATION ON OUR GROUP (Conl’d) In addition, our Group has submitted applications for the following trademarks, which are still pending approval: Trademark  Countries  Class  Description of Goods under Trademark  INNOVA  Malaysia  10  Disposable examination gloves; disposable protective gloves for medical purposes; gloves for massage; gloves for dental use; gloves for medical use; etc  PHARMATEX  Malaysia  10  Disposable examination gloves; disposable protective gloves for medical purposes; gloves for massage; gloves for dental use; gloves for medical use; etc  A device shaped like a Globe (our logo)  Malaysia  10  Disposable examination gloves; disposable protective gloves for medical purposes; gloves for massage; gloves for dental use; gloves for medical use; etc
(iv) Other intellectual property rights Save as disclosed above, our Group does not have any other licences, franchises or technical assistance agreements in relation to intellectual property rights. 5.4.15 Interruptions in business Our Group has not experienced any material disruption· in our operations that had a significant effect on our operations! revenue for the past 12 months prior to the date of this Prospectus. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 5. INFORMATION ON OUR GROUP (Cont’d)
5.4.16 Achievements, accreditations and awards Throughout the history of our Group’s business operations, our subsidiary, HSB has attained recognition for its business success and achievements as follows: Year Recognition Enterprise 50 Award jointly organised by Andersen Consulting and the MIT!. 2005 Commodity Industry Award (National Level) for the Factory Category by the Ministry of Plantation and Commodities. Rubber Industry Award for Innovative and Large Factory categories by the MRB Selangor Export Excellence Award 2005 awarded by the Selangor Industry Awards 2007 Selangor Industry Awards and Investors’ Appreciation 2007 awarded by the Selangor Industry Awards Our Group also places significant emphasis on product quality and ensures compliance with the stringent quality standards. This is reflected by the fact that HSB and PAPL, our subsidiaries have been accredited with the quality management systems by international bodies as set out in Section 5.4.12 of this Prospectus. 5.4.17 Corporate Social Responsibility (“CSR”) Our Group has undertaken the following CSR projects: (i) Community Improvement Projects To-date, our Group has contributed approximately RMl.O million to the local community through annual charity drives and donations to orphanages, retirement homes, the poor and needy. Our Group have also built recreational parks for neighbouring residents and contributed to schools for upgrading and maintenance works. During the Asian tsunami disaster, our Group has donated gloves to Sri Lanka, Mercy Malaysia and Mercy Relief Singapore for disaster relief work. (ti) Environmental preservation (a) Wastewater treatment plants
Our Group has made significant investments in wastewater treatment plants to ensure that waste water discharged from our facilities are well within the applicable environmental standards. Treated water from the treatment plants are regularly sent to independent third parties for testing to ensure that the discharged water is adequately treated.
(b) Biomass heaters

Our biomas heaters use bio-wastes such as empty fruit bunches and palm kernel shells as fuel for heating purposes. Since these sources are renewable, our biomass heaters are considered to be environmentally friendly. Emissions from these biomass heaters fully complied with the requirements ofthe DOE. 5. INFORMATION ON OUR GROUP (Cont’d) 5.5 Major customers Save for the following, there are no other major customers, who have contributed 10% or more to our Group’s turnover for the FYE 2005, 2006 and 2007 and the 6 months FPE 30 September 2007: Customer  Length of relationship (years)  Level of Sales  < ——————————-FYE ———————————–>  2005  2006  2007  Microflex Corporation Medline Industries, Inc  19 2  RM’OOO 68,134 – % 62.2 – RM’OOO 85,842 8,859  % 53.6 5.5  RM’OOO 100,635 41,630  0/0 41.8 17.3
Customer  Length of relationship (years)  Level of Sales  6 months FPE 30 September 2007  RM’OOO  0/0  Microflex Corporation  19  39,045  28.4  Medline Industries, Inc  2  28,609  20.8
Our Group’s business is dependent on Microflex Corporation and Medine Industries, Inc. from the USA, by virtue of their respective contribution of 28.4% and 20.8% to our Group’s total revenue for the 6 months FPE 30 September 2007 (FYE 2007: 41.8% and 17.3% respectively). However, the following factors help to mitigate our Group’s dependency: Microflex Corporation (i) Microflex Corporation has been our customer for 19 years, indicating a long-term and stable business relationship which provides the basis for continuing business and growth;
(ii) Microflex Corporation is one of the established companies. in the marketing and distribution of Latex Gloves in the USA. Its distribution network covers both the USA and overseas. Microflex Corporation’s international division has approximately 105 distributors spread across 40 countries. The extensive distribution network of Microflex Corporation would enable our Group to access a wider customer base without the need to invest and establish a distribution network, warehousing and logistics;

(iii) Between FYE 2005 and 2007, we have been reducing our dependency on Microflex Corporation as a customer from 62.2% to 41.8% in terms of revenue contribution while our Group’s revenue has continued to grow from RMI09.6 million to RM240.9 million. In the 6 months FPE 30 September 2007, our dependency on Microflex Corporation as a customer further reduced from 41.8% for the FYE 2007 to 28.4%; 5. INFORMATION ON OUR GROUP (Cont’d) (iv) Despite the growth in revenue from Microflex Corporation as a customer, the revenue contribution from Microflex Corporation in proportion to our Group’s revenue has been reducing over the last 3 financial years and the 6 months FPE 30 September 2007, as follows: FYE 2005  FYE 2006  FYE2007  6 months FPE30 September 2007  Revenue (RM’OOO) % of total sales to Microflex Corporation  109,579 62.2  160,275 53.6  240,915 41.8  137,563 28.4
This is an indication of our Group’s ability to increase our revenue from other customers but at the same time reduce our dependency on Microflex Corporation; (v) According to our Management, our Group supplies approximately 40% of the total requirements ofMicroflex Corporation. The ability ofour Group to meet a substantial amount of Microflex Corporation’s total requirements also creates a dependency by Microflex Corporation on our Group. As such, this business relationship creates a certain level of dependency on our Group;
(vi) Nevertheless, throughout the years of business relationship, our Group has formed a close and stable relationship with Microflex Corporation including joint R&D on new products as demonstrated in the elastic high stress retention Nitrile Examination Gloves; and

(vii) The joint development in elastic high stress retention Nitrile Examination Gloves has resulted in the filing of a patent by Microflex Corporation, whereby Microflex Corporation has been awarded and received the US Patent 7,176,260. Our Group, as the exclusive licenced manufacturer of the product, had on 20 June 2007 entered into an exclusive patent licence agreement with Microflex Corporation for the rights to manufacture this type of Nitrile Gloves for the duration of the patent, and the exclusive licence to sell this type of Nitrile Gloves to distributors, whose business is primarily in the acute healthcare market. Medline Industries, Inc (i) Medline Industries, Inc has been our customer for 2 years. Further, as set out in the table below, the revenue contribution from Medline Industries, Inc has continued to grow from 5.5% in the FYE 2006 to 20.8% in the 6 months FPE 30 September 2007. This is an indication of a continuing business relationship between our Group and Medline Industries, Inc: FYE 2005  FYE 2006  FYE2007  6 months FPE30 September 2007  Revenue (RM’OOO) % of total sales to Medline Industries, Inc  109,579 – 160,275 5.5  240,915 17.3  137,563 20.8
; and 5. INFORMATION ON OUR GROUP (Collt’d) (ii) Medline Industries, Inc. manufactures and distributes more than 100,000 medical products with 7 manufacturing facilities in North America and more than 25 joint-venture manufacturing plants worldwide. The company has 29 distribution centers to service their health care customers such as hospitals, care facilities, surgery centers, commercial laundries, physician offices and others. This extensive distribution network of Medline Industries, Inc would enable our Group to access a wider customer base without the need to invest and establish a distribution network, warehousing and logistics. Further, the fol1owing factors also help our Group in mitigating our dependency on our major customers: (i) Part of our Group’s philosophy has always been focusing on nurturing and building strong long-term business relationships with our customers. In the 6 months FPE 30 September 2007, 9 of our top 20 customers have been dealing with our Group for more than 5 years or more (FYE 2007: 10 of our top 20 customers) and 6 out of our top 20 customers have been dealing with our Group for 8 or more years (FYE: 6 ofour top 20 customers); and
(ii) For the 6 months FPE 30 September 2007, our Group has developed a base of 885 customers (FYE 2007: 981) spread across 18 countries, including Malaysia (FYE 2007: 24 countries). Of these, 53 are brand owners and intermediaries (FYE 2007: 56), 818 are end-user customers (FYE 2007: 91 I) namely, dental clinics and physicians’ offices, and 14 are distributors for products under our own brand names (FYE 2007: 14). The diversity and established number ofcustomers would provide our Group with the platform for future business growth.

5.6 Major suppliers Save for the following, there are no other major suppliers who have contributed 10% or more to our Group’s purchases for the FYE 2005, 2006 and 2007 and the 6 months FPE 30 September 2007: Level of Purchases  Customer/ (Supplies)  Length of relationship (year)  ~—————-FYE­2005 2006  -_..–~–_ …—-> 2007  RM’OOO  %  RM’OOO  %  RM’OOO  %  Alcan Far East Pte. Ltd, Singapore (Natural rubber latex)  3  – – 11,682  13.8  10,397  8.2  Nantex Industry Co. Ltd. Taiwan (Nitrile latex)  4  1,054  1.9  10,616  12.5  18,842  14.8  Revertex (M) Sdn Bhd (Natural rubber latex and chemicals)  19  9,421  17.0  9,610  11.4  2,047  1.6  ED & F MAN Malaysia Sdn Bhd  13  – – – – 27,189  21.4  (formerly known as Safic-Alcan (Malaysia) SdnBhd) (Natural rubber latex)  Zeon Asia Pte Ltd, Singapore (Nitrile latex)  1O  8,141  14.7  7,693  9.1  16,236  12.8
5. INFORMATION ON OUR GROUP (Cont’d) Level of Purchases  Customerl (Supplies)  Length of relationsbip (year)  6 months FPE 30 September 2007  RM’OOO  %  Alcan Far East Pte. Ltd, Singapore (Natural rubber latex)  3  1,962  2.9  Nantex. Industry Co. Ltd. Taiwan (Nitrile latex)  4  13,205  19.5  Revertex (M) Sdn Bhd (Natural rubber latex and chemicals)  19  9,299  13.7  ED & F MAN Malaysia Sdn Bhd (formerly known as Safie-Alcan (Malaysia) Sdn Bhd) (Natural rubber latex)  13  6,631  9.8  Zoon Asia Pte Ltd, Singapore (Nitrile latex)  10  15,931  23.5
However, the following factors help to mitigate our Group’s dependency: Top suppliers of natural rubber latex (i) Our Group has been dealing with ED & F MAN Malaysia Sdn Bhd (formerly known as Safie­Alcon (Malaysia) Sdn Bhd) and Revertex (M) Sdn Bhd for the last 13 years and 19 years respectively. This continuing business relationslUp will provide some form of basis for the supply ofnarural rubber latex;
(ii) As natural rubber latex is a commodity item, these materials can be sourced from other suppliers, locally and overseas. Furthermore, buying a significant proportion from the same

supplier can enable our Group to obtain benefits of volume discount; (iii) In addition, our Group also deals with 3 other natural rubber latex suppliers within lhe top 20 suppliers for 6 months FPE 30 September 2007 (FYE 2007: 3), indicating that there are alternative suppliers that are currently able to meet our Group’s requirements; and (iv) As for the availability of natural rubber latex, there is ample source of supply frcm local production and imports. Top suppliers of nitrile latex (i) The top suppliers of nitrile latex, Zeon Asia Pte Ltd from Singapore and Nantex Industry Co. Ltd. from Taiwan, have been dealing with our Group for the last 10 years and 4 years respectively. This reinforces the suppliers’ continuing business relationships with our Group;
(ii) For lhe 6 months FPE 30 September 2007, our Group also sources nitrile latex from 2 other suppliers within the top 20 suppliers (FYE 2007: 2), indicating that there are alternative suppliers that are currently able to meet our Group’s requirements; and

(iii) As for availability in supply of nitrile latex, there are ample sources overseas. In Malaysia, there is one synthetic latex plant that started operations in 2003. However most of the synthetic latex used is primarily imported from a number of overseas suppliers. 5. INFORMATION ON OUR GROUP (Conl’d) 5.7 Future plans and prospccts 5.7.1 Future plans The future plans of our Group are focused in 3 key areas as depicted in the diagram below: Future Plans ofour Group I Expansion ofNew Products Manufacturing Facilities I Construction ofNew Production Facilities Purchase ofNew Machinery and Equipment
Expansion of Export Markets  South America  Middle East  Russia  China  India
Damp Don Nitrile Elastic High Stress Retention Surgical Gloves  Polyisoprene Surgical Gloves  Accelerator Free Nitrile Gloves  Industrial Nitrile Gloves
(1) New products In 2006, our Group has successfully completed R&D on developing the damp don nitrile elastic high stress retention Surgical Gloves, which is intended to be commercialised in the FYE2009. Further, our Group is currently undertaking R&D, all of which are expected to be completed by the FYE 2009, to develop a range of new products which includes: (a) Polyisoprcne Surgical Gloves;
(b) Accelerator free Nitrile Gloves; and
(c) Industrial nitrile unsupported gloves.

5. INFORMATION ON OUR GROUP (Con/’d) The introduction of new products that cater for different needs of users and markets is important to ensure sustainable business growth. As such, we have continuously worked with our customers and conduct market surveys to identify opportunities where we can develop new products that can address the needs and problems faced by the users or markets, such as, natural rubber protein allergy and accelerator allergy. In this respecl, we have developed new products wilb the needs of our targeted customers in mind and at lbe same time ensuring lbat lbese products will be competitively priced. Refer to Section 5.4.13 (v) of this Prospectus for further details oflbese products. (ii) Expansion on manufacturing facilities (a) Construction of new production facilities As part of our expansion plans, we are currently setting up lbe proposed 4′” Plant and envisage to commence the construction of lbe proposed 5′” Plant on the land adjacent to our present factory at Batang Berjuntai to address areas of growth and opportunities in the expansion of export markets and the production of new products. These additional manufacturing plants are expected to be fully operational by the FYE 2009 and FYE 2010 respectively. (b) Purchase of new machinery and equipment We are currently installing 10 new production lines in lbe proposed 4′” Plant, which will be fully operational by the FYE 2009. The proposed 4′” Plant will provide us wilb an additional capacity ofapproximately 2.9 billion pieces ofgloves per year. In July 2008, we will be commencing the construction of a proposed 5′” Plant, which will be fully operational by lbe FYE 2010. We will install 10 new production lines in lbe proposed 5′” Plant. The proposed 5′” Plant will provide us with an additional capacity of approximately 3.1 billion pieces ofgloves per year. In total, lbe 20 new production lines from lbe proposed 4′” and the 5′” Plants will provide our Group with an additional capacity of approximately 6.0 billion pieces of gloves per year or approximately 182% additional capacity from our present capacity of approximately 3.3 billion pieces ofgloves. Some oflbe new machinery and equipment that we intend to purchase are: • Production lines; • Chillers;
• River water treatment pJant;

• Waste water treatment plant;
• Air compressor; and

• Cooling towers. The above new machinery and equipment were purchased and/or shall be purchased between FYE 2007 and FYE 20 10. The new machinery and equipment will allow our Group to produce various types of gloves to cater for the demand ofour customers in the future. CompaoyNo.741883-X 5. INFORMATION ON OUR GROUP (ColII’d) (iii) Expansion of export markets Part of our Group’s future plans is to focus on expanding into other overseas markets including: (a) South America; and
(b) Middle East In addition, we will also be targeting new markets in the FYE 2009 such as: Ca) Russia;

 

Cb) China; and (c) India. Although our Group is already making small inroads into Brazil and Iran, we intend to focus
our marketing efforts in these markets with the aim of increasing the revenue generated from exports to these countries. For overseas markets, we intend to utilise indirect distribution strategies through intermediaries such as trading houses, distributors and importers of Latex Gloves. This strategy of expansion will focus on utilising the existing network of intermediaries to expand our market coverage without the need for significant investments in setting-up sales and marketing offices and logistics. 5.7.2 Prospects of our Group The prospects of our Group are favourable. This is in light of the outlook of the Late< Gloves industry and the prospects and future growth of the industry as set out io Sections 4.5 and 4.12 of this Prospectus respectively. 5.8 Snbsidiaries The following chart depicts our present Group’s structure:
100% 80% 82% SEMSB PUI PAPL 5. INFORMATION ON OUR GROUP (Cont’d) Companies  Principal activities  HHB HSB SEMSB PUl PAPL  Investment holding Manufacturing ofLatex Gloves Automation systems R&D and leasing ofproperty Marketing of Latex Gloves Markeling of Lalex Gloves and trading of Vinyl Gloves
5.8.1  HSB  (i)  History and business  HSB was incOIporated as a private limited company in Malaysia on 12 September 1981 under  the Act and commenced operations in the FYE 1989.  HSB is principally involved in the  manufacturing of Latex Gloves.  On 7 May 2007, HSB became our wholly owned subsidiary.  (ii)  Share capital  HSB has an authorised share capital ofRM25,OOO,OOO comprising 25,000,000 ordinary shares  ofRMI .00 each, of which RM15,681,997 have been issued and fully paid-up.  The changes in the issued and paid-up share capital of HSB since its incorporation are as  follows:
No. of  Cumulative  ordinary  issued and  shares of  paid-up share  Date of  RMl.OO each  capital  allotment  allotted  Consideration  (RM)  12.09.1981  3  Cash  3  14.11.1987  1  Cash  4  14.03.1988  299,996  Cash  300,000  20.08.1991  396,000  Bonus issue on the basis of  696,000  approximately 1.32 new bonus shares  for every one (1) ordinary share held  via capitalisation of reserves  23.08.1991  174,000  Cash  870,000  12.06.1992  1,566,000  Bonus issue on the basis of  2,436,000  approximately 1.80 new bonus shares  for every one (1) ordinary share held  via capitalisation of reserves  Between  1,792,895  Cash  4,228,895  05.10.1994  and  18.10.1994  23.11.1994  45,000  Cash  4,273,895  27.03.1996  110,904  Cash  4,384,799
5. INFORMATION ON OUR GROUP (Cont’d) Date of allotment Between 11.07.1997 and 26.07.1997 04.04.2005  No. of ordinary shares of RMI.OO each allotted 6,577,198 4,720,000  Consideration Cash Cash  Cumulative issued and paid-up share capital (RM) 10,961,997 15,681,997
As at 15 February 2008 (being the latest practicable date prior to the issuance of this Prospectus), there are no outstanding warrants, options, convertible securities or uncalled capital in HSB. (iii) Substantial shareholder We are the holding company ofHSB, holding 100% equity interest therein. (iv) Subsidiary As at 15 February 2008 (being the latest practicable date prior to the issuance of this Prospectus), the subsidiaries ofHSB are as follows: Issued and paid- up share capital  Effective  RM  cquity  Datel place of  (unless otherwise  interest  Company  incorporation  stated)  (%)  Principal activities  SEMSB  28.09.1987/  1,000  100  Automation systems  Malaysia  R&D and leasing of  property  PUl  11.02.2003/  USD250,000  80  Marketing of Latex  USA  Gloves  PAPL  02.09.1996/  AUD70,001  82  Marketing ofLatex  Australia  Gloves and trading of  Vinyl Gloves
HSB does not have any associated company. 5.8.2 SEMSB (i) History and business SEMSB was incorporated as a private limited company in Malaysia on 28 September 1987 under the Act and commenced operations in April 2000. SEMSB is principally involved in the automation systems R&D and leasing ofproperty. 5. INFORMATION ON OUR GROUP (Cont’d) (il) Share capital SEMSB has an authorised share capital ofRMIOO,OOO comprising 100,000 ordinary shares of RM1.00 each, of which RMI,OOO have been issued and fully paid-up. The changes in the issued and paid-up share capital of SEMSB since its incorporation are as follows: Date of allotment  No. of ordinary shares of RMJ.OO each allotted  Consideration  Cumulative issued and paid-up share capital (RM)  28.09.1987  2  Subscribers’ shares  2  26.02.1999  998  Cash  1,000
As at  15 February 2008  (being the latest practicable date prior to the issuance of this  Prospectus), there  are  no  outstanding warrants, options, convertible securities  or uncalled  capital in SEMSB.  (iii)  Substantial shareholder  SEMSB is a wholly owned subsidiary ofHSB, which in turn is our wholly owned subsidiary.  (iv)  Subsidiary  As at  15  February 2008 (being the latest practicable date prior to  the  issuance of this  Prospectus), SEMSB does not have any subsidiary or associated company.  5.8.3  PUI  (1)  History and business  PUI was incorporated on II February 2003 in the State of California, USA as a private limited  liability company.  PUI is principally involved in the marketing of Latex Gloves.  PUI  commenced its operations in May 2003.  (ll)  Share capital  PUI has a stockholders’ equity of 250,000 Common stock of USD 1.00 each, of which all have  been issued and fully paid-up.  The changes in the issued and paid-up share capital of PUI since its incorporation are as  follows:
Date of allotment  No. of common stock of USDl.OO each allotted  Consideration  Cumulative stockholders’ equity (USD)  26.03.2003  10,000  Cash  10,000  01.07.2003  240,000  Cash  250,000
S. INFORMATION ON OUR GROUP (Cont’d) As at 15 February 2008 (being the latest practicable date prior to the issuance of this Prospectus), there are no outstanding warrants, options, convertible securities or uncalled capital in PUI. (iii) Substantial shareholder The substantial shareholders of Pur and their shareholdings as at 15 February 2008 (being the latest practicable date prior to the issuance ofthis Prospectus) are as follows: r- Direct  Indirect  No. of common stock  %  No. of common stock  %  HSB+ I. Gregory Pal<  200,000 50,000  80.00 20.00  — —
Note:  ‘”  fiSB is our wholly owned subsidiary  (iv)  Subsidiary  As at  IS  February 2008 (being the latest practicable date prior to  the  issuance of this  Prospectus), PUI does not have any subsidiary or associated company.  5.8.4  PAPL  (i)  History and business  PAPI. was incorporated on 2 September 1996 in Australia as a private limited company under  the same name.  PAPI. is principally involved in the marketing of Latex Gloves and trading of  Vinyl Gloves. PAPI. commenced operations in April 2001.  (ii)  Share capital  PAPI. has a contributed capital of AUD70,00 I.  The changes in the issued and paid-up share capital of PAPI. since its incorporation are as  follows:
Cumulative  issued and paid- Date of  No. of ordinary  up sbare capital  allotment  shares allotted  Consideration  (AUD)  02.09.1996  I  Subscribers’ shares  I  20.04.2001  40,000  Cash  40,001  26.06.2002  30,000  Cash  70,001
As at 15 February 2008 (being the latest practicable date prior to the issuance of this Prospectus), there are no outstanding warrants, options, convertible securities or uncalled capital in PAPI.. 5. INFORMATION ON OUR GROUP (Cont’d) (ill) Substantial sbareholder The substantial shareholders of PAPL and their shareholdings as at 15 February 2008 (being the latest practicable date prior to the issuance of this Prospectus) are as follows: Substantial  Direct  Indirect  shareholders  No. of shares  %  No. of shares  %  HSB* David Wee Tze Teng  57,401 12,600  82.00 18.00  — -.
Note: * HSB is our wholly owned subsidiary (iv) Subsidiary As at IS February 2008 (being the latest practicable date prior to the issuance of this Prospectus), PAPL does not have any subsidiary or associated company. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
4. INDUSTRY OVERVIEW
Overview of the global economy The world economy is expected to continue expanding for the fifth consecutive year in 2007, albeit at a more moderate pace, amidst high crude oil prices and uncertainties in the economy of the USA. Global inflation remains at manageable levels although it has edged upwards due to high crude oil prices. For the advanced countries, growth is more balanced across regions with the steady recovery in Europe and Japan partially offsetting the moderation in the USA. Developing countries, primarily driven by investment and robust trade, are expected to outperform advanced countries and increasingly contribute to global growth. In this context, China, India and Russia are anticipated to account for more than half of this year’s growth. Rapid growth has also led several large developing countries to significantly contribute outward foreign direct investment (“FDI”), an area where traditionally, developed countries were the main sources. The global economy is expected to expand at 5.2% in 2007, mainly driven by robust growth in China, India as well as Russia, which is envisaged to offset the impact of moderation in the USA economy arising from the housing market slump and dampened consumer spending. Although global growth remains strong, inflation is still at a manageable level. The USA economy grew at 4.0% during the second quarter of 2007 (January -March 2007: 0.6%) as economic activity rebounded, largely due to consumer spending, non-residential fixed investment and exports. Since the beginning of the year, however, persistent weaknesses in the housing sector, exacerbated by delinquencies in subprime mortgages, precipitated a credit crisis over the July -August period and caused greater volatility in the world financial markets. Consequently, the USA economy is expected to moderate in the second half, resulting in lower real gross domestic product (“GDP”) growth of2.0% in 2007 (2006: 3.3%). Growth in emerging East Asia is expected to moderate slightly to 8.1 % in 2007 (2006: 8.4%). Exports remain the main driver of regional growth, while domestic demand continues to improve in most economies. Apart from the strong global demand for the region’s exports, the buoyant Chinese economy also continues to gain importance as an export destination for other economies in the region, including members of ASEAN. In the ASEAN region, GDP growth for the year is expected to range from 4.5% in Thailand to 7.0% in Singapore, mainly driven by exports and domestic investment. Among the emerging markets in ASEAN, Vietnam notched 7.9% in the first half of 2007, primarily due to surging investments and robust non-oil exports. Inflation has been generally well contained despite strong global growth, although some emerging market and developing countries face inflationary pressures, especially from rising energy and food prices. Crude oil prices remain high due to production capacity constraints and rising demand, whilst food prices have edged up following weather-related supply shortfalls and increasing use of biofuels. Inflation for the year is projected to be 2.0% for the advanced countries and 5.7% for emerging market and developing countries. Global growth in 2008, expected to be generally more broad-based both across regions and within countries, will continue to spur world trade and investment flows. Growth in world trade volume is projected at 7.4% in 2008 (2007: 7.1%), supported by steady demand-driven expansion in global high­technology industries, commodities and services. The positive outlook, however, could be affected by a fallout of the USA subprime mortgage crisis, impacting on the real economy in the USA and the global economy. The ensuing credit crunch prompted central bank intervention in early August to ease pressures on the global financial system, but the effectiveness of the measures has yet to be determined. 4. INDUSTRY OVERVIEW (Cont’d) Notwithstanding these risks, the global economy is anticipated to continue expanding at 5.2% in 2008 (2007: 5.2%) with Japan, Europe and emerging Asia, in particular, China and India, counterbalancing a possible moderation of the USA economy. (Source: Economic Report 200712008) 4.2 Overview of the Malaysian economy Growth prospects for the Malaysian economy remain favourable in 2007, despite uncertainty in the global economic environment. Strong domestic economic fundamentals will enable the economy to grow at 6.0% in 2007 (2006: 5.9%). On the supply side, output growth is supported by expansion in all sectors of the economy. The services sector is envisaged to contribute significantly to real GDP grov,rth, led by robust household spending and buoyant business activity. The manufacturing sector is expected to pick up in the second half of the year on the back of an anticipated recovery in global electronics demand. The agriculture sector will continue to expand, supported by higher output of food commodities. The scheduled implementation of Ninth Malaysia Plan (“9MP”) projects and improvement in the property market will further boost the construction sector. Output growth of the mining sector is envisaged to turn positive, with increased crude oil production in the second half of the year. On the demand side, growth will be driven by resilient domestic demand of both private and public sectors, largely due to stronger consumer sentiment and business confidence as well as higher Government spending. . The manufacturing sector is expected to grow 3.1% in 2007 (2006: 7.1%) supported by domestic­oriented industries, particularly chemicals and chemical products, food and construction-related industries. Output of the construction-related industry, continued to expand significantly by 30.8% (January-June 2006: 4.3%) due to strong growth in basic iron and steel structural metal products. Productionofbothproducts surged by29.5%and62.I%, respectively, led byanupturninconstruction activity following the implementation ofprojects under the 9MP. The Malaysian economy is anticipated to strengthen further to 6.0%-6.5% in 2008 (2007: 6.0%) with positive contribution from all sectors of the economy. Domestic demand will be the main driver of the economy, while external demand is expected to pick up in tandem with improved prospects in world trade. Private investment and consumption spending are expected to remain robust, while public expenditure continues tq expand. Inflation is anticipated to remain low despite strong expansion in the economy as output growth is still below potential level. Coupled with increased productivity, the economy would be able to absorb higher demand expenditure. (Source: Economic Report 200712008) 4.3 Overview of the manufacturing sector in Malaysia The manufacturing sector is expected to grow 3.1 % in 2007 (2006: 7.1 %) supported by domestic­oriented industries, particularly chemicals and chemical products, food and construction related industries. The rubber-based industry continued to register growth of 8.0% (January -June 2006: 0.4%), contributing 3.9% share to total manufacturing output. In line with higher domestic and external demand, sales of rubber products also increased 7.4% (January -June 2006: 34.6%) during the same period. Rubber Gloves, the largest component of the rubber-based industry, recorded a turnaround of
3.6% (January -June 2006: -1.8%), arising from higher usage in health services. Likewise, sales of latex-based catheters also registered double-digit growth of 66.5% (January -June 2006: -21.9%). Malaysian Rubber Gloves and catheters made from natural rubber latex are highly demanded for their unique mix of high elasticity and tensile strength of properties as well as excellent film-forming characteristics. 4. INDUSTRY OVERVIEW (Cont’d) Value added in the manufacturing sector is projected to grow by 3.8% (2006: 3. I%) in line with expansion in global trade. Global demands for manufactured products, particularly electrical and electronics products, is expected to rise sharply, underpinned by sustained world growth and strengthening USA economy. This will benefit Malaysia export-oriented industries. Output of resource-based products is expected to expand due to strong demand for refined petroleum products, plastic and chemicals including biofuels, Rubber Gloves as well as wooden furniture and fixtures. (Source: Economic Report 2007/2008) 4.4 Overview of the Latex Gloves industry in Malaysia Latex Gloves are part of the Latex Products Industry, which comprises five sectors. This is illustrated in the diagram below: Latex Products Industry T IIIII Other Latex Condoms Latex Threads Gloves Catheters Products The Latex Glove Segment itself is further segmented as depicted in the diagram below:
SurgicalExamination Industrial Household Gloves Gloves Gloves Gloves Latex Gloves are made by dipping moulds in the shape of human hands into liquid latex and chemicals. Once hardened, the fmished products are stripped off the mould, packaged and sterilised. Examination Gloves Examination Gloves are divided into two categories: medical grade; and non-medical grade. 4. INDUSTRY OVERVIEW (Cont’d) Medical grade Examination Gloves are extensively tested to meet stringent international standards, which are in accordance to various regulations in different countries. Medical grade Examination Gloves are also known as patient Examination Gloves. It is made of natural rubber, nitrile, vinyl or some other materials. The glove is a disposable item intended for a single usage and is used in health care to prevent contamination between patients and the medical examiners, nurses and other health care personnel. Surgical Gloves Surgical Gloves are gloves made from natural or synthetic rubber, which are mainly used by operating room personnel to prevent contamination between patients and medical and other health care personnel. Industrial Gloves Industrial Gloves are heavy-duty gloves designed specifically for industrial usage. They are mainly used for protection against hazardous substances or chemicals, and protection against abrasion. Household Gloves Household Gloves do not have to meet stringent requirements and are more for general household uses such as in gardening, cooking, dish washing and cleaning. The Latex Gloves industry plays an important role III the Malaysian economy. This can be substantiated as follows: (i) Malaysia is currently the world leader in the production of Rubber Gloves;
(ii) In 2006, Malaysia maintained its position as the largest supplier of Latex Gloves to the USA, accounting for approximately RM2. 1 billion of total exports of Latex Gloves;

(iii) Export earnings from Latex Gloves registered an average annual growth rate of 14.4% between 2002 and 2006 reaching RM5.4 billion in 2006. Between January and September 2007, the export earnings from Latex Gloves increased by 1I.1% to reach RM4.9 billion compared to the same period in the previous year; (iv) According to MIDA, in 2006, there were 500 companies involved in the rubber products industry in Malaysia, of which approximately 21% (105 companies) were registered as manufacturers of Latex Gloves;
(v) In 2006, sales value of the manufacture of Rubber Gloves registered a growth of 28.5% to reach RM5.6 billion (based on 65 establishments). Between January and September 2007, sales value of the manufacture of Rubber Gloves registered a growth of3.9% to reach RM4.2 billion compared to the same period in the previous year;
(vi) Export earnings of Latex Gloves accounted for approximately 64.3% of the total export earnings generated from the rubber products industry in 2006;

(vii) According to MIDA, in 2006, capital investments within the rubber products industry reached RM7l4.6 million of which approximately 48.7% of the total capital investment was approved for the production of industrial gloves, household gloves and examination gloves. (Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) 4. INDUSTRY OVERVIEW (Cont’d) 4.5 Outlook of the Latex Gloves industry The outlook of the Latex Gloves industry in Malaysia is favourable. The following factors and observations provide an indication of some of the factors that impact on the outlook of the Latex Gloves industry in Malaysia. (i) Local Production
(a) Between 2002 and 2006, sales value of the manufacture of Rubber Gloves increased at an average annual rate of 17.1%. In 2006, sales value of the manufacture of Rubber Gloves registered a growth of 28.5% to reach RM5.6 billion (based on 65 establishments). Between January and September 2007, sales value of the manufacture of Rubber Gloves increased by 3.9% to reach RM4.2 bi11ion compared to the same period in the previous year.
(b) Between 2002 and 2006, the production quantity of Rubber Gloves registered an average annual growth rate of 13.9%. In 2006, the production quantity of Rubber Gloves increased by 7.0% to reach 20.5 billion pairs (based on 65 establishments). Between January and September 2007, the production quantity of Rubber Gloves increased by 2.8% to reach 15.5 billion pairs compared to the same period in the previous year.

 

(ii) Exports
(a) Between 2002 and 2006, the total export value of Rubber Gloves increased at an average annual rate of 14.4%. In 2006, the total export value of Rubber Gloves increased by 19.5% to reach RM5.4 billion. Between January and September 2007, the total export value of Rubber Gloves increased by 1I.l% to reach RM4.9 billion compared to the same period in the previous year.
(b) Between 2002 and 2006, the total export quantity of Rubber Gloves grew at an average annual rate of 16.1%. In 2006, export quantity of Rubber Gloves increased by 0.5% to reach 36.8 billion pairs. Between January and September 2007, export quantity of Rubber Gloves increased by 15.3% to reach 34.4 bi11ion pairs compared to the same period in the previous year.

 

(Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) 4.6 Industry players and competition Some of the major manufacturers (listed in alphabetical order) include: (i) Adventa Berhad;
(ii) Alliance Rubber Products Sdn Bhd;

(iii) Ansell Group; (iv) APL Industries Berhad*;
(v) Brightway Holdings Sdn Bhd;
(vi) Comfort Rubber Gloves Industries Sdn Bhd;

(vii) Dragon Star Sdn Bhd; (viii) GMP Medicare Sdn Bhd; (ix) Green Prospect Sdn Bhd;
(x) HSB (a subsidiary ofour Group);
(xi) Koon Seng Sdn Bhd; {xii) Kossan Rubber Industries Berhad;

 

4. INDUSTRY OVERVIEW (Cont’d) (xiii)  Latexx Partners Bhd;  (xiv)  Marigold Industrial (M) Sdn Bhd;  (xv)  MRG Industries Sdn Bhd;  (xvi)  Regent Hospital Products Sdn Bhd;  (xvii)  Seal Polymer Industries Berhad*;  (xviii)  Smart Glove Corporation Sdn Bhd;  (xix)  8upermax Corporation Bhd;  (xx)  Top Glove Corporation Bhd;  (xxi)  WRP Asia Pacific 8dn Bhd; and  (xxii)  YTY Industries Sdn Bhd.
The above list of players is not exhaustive and only represents some of the manufacturers of Latex Gloves in Malaysia. Note: * Seal Polymer Industries Berhad is a subsidiary while APL Industries Berhad is an associate company ofSupermax Corporation Berhad. (Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) The Latex Gloves industry operates under normal competitive conditions. Competition among Latex Gloves manufacturers is global in nature as virtually all of them service the export market exclusively. As with most free enterprise environments, competition is based on a number offactors, including: (i) Quality of products and services;
(ii) Cost competitiveness;

(iii) Prompt delivery schedules; and (iv) Manufacturing capabilities and capacities. Competition in the Latex Gloves industry comes from two perspectives:

(i) Competition among Malaysian manufacturers as Malaysia has developed a reputation as a major producer ofLatex Gloves that can meet international standards; and
(ii) Competition among other countries, especially Thailand, China and Indonesia. The competition among the Latex Gloves manufacturers is predicated by the following factors:
(i) In 2006, there were 105 manufacturers of gloves registered with the MIDA. These operators range from large multinationals and local operators to medium and smaller sized local manufacturers; and
(ii) Competition from Thailand and Indonesia whereby these two countries are the top two largest producers of natural latex. The abundance of raw materials and lower labour costs provides manufacturers in Thailand and Indonesia with some cost advantage.

4. INDUSTRY OVERVIEW (Cont’d) However, competition within the Latex Gloves industry can be moderated by the following factors: (i) Manufacturers with a high degree of integration and value-adding in terms of compounding, R&D on product improvements and enhancement, and process improvement are likely to enjoy competitive advantages such as lower cost of production, better end-to-end quality control, and faster turnaround time;
(ii) Manufacturers with in-house R&D capabilities are likely to face moderate competition. Part of R&D is also in the in-house compounding of the latex formulation whereby different additives such as stabilisers, dispersants, and other specialised additives would provide additional characteristics and properties to the Latex Gloves.

As an example, specialised additives such as lanolin can be used as an emollient and conditioning agent for smoothing and hydrating dry irritated hands, and act as a barrier protection. In addition, the ability to meet other desired properties such as tensile strength, tear and puncture resistance, elongation, tactility, softness, donning properties and good intermittent resistance to chemicals are also the result of in-house compounding and formulation; (iii) R&D is also critical in facilitating the development of new or improved range of Latex Gloves to address growth opportunities. Manufacturers with the in-house R&D capabilities are able to produce a different range of Latex Gloves using different types of synthetic materials including acrylonitrile-butadiene copolymer, plasticised polyvinyl chloride, neoprene, and polyisoprene. As an example, using polyisoprene in compound formulation would result in a synthetic glove that is able to emulate the desired characteristics of natural rubber, including strength and barrier, elasticity, softness and provide additional comfort to the users; (iv) Manufacturers that are able to produce a range of natural rubber and synthetic Latex Gloves would be in a better position to meet a wider range of customers’ needs. Competitive pressure for such manufacturers are somewhat moderated; and
(v) Manufacturers with their own in-house brands are also able to differentiate themselves from other competitors and provide a competitive edge to compete effectively in this industry.

(Source: Independent Market Research Reportprepared by Vital Factor Consulting Sdn Bhd) We believe that we are well positioned in the market as: (i) Our Group has the in-house capabilities to undertake various processes including compounding, Chlorination, polymer coating or powdering, to produce a different range of natural rubber and nitrile rubber gloves to meet customers’ requirements;
(ii) Our Group has in-house capabilities and expertise to manufacture both natural rubber and synthetic Latex Gloves to meet the diverse needs and specifications ofcustomers; and

(iii) Our Group has in-house R&D capabilities and facilities which playa key role for our Group, particularly in creating and sustaining competitive advantages through the following: (a) continuous improvements on existing products to ensure customer satisfaction;
(a) developing new products to address new areas of growth and opportunities; and
(c) continuous improvements in manufacturing processes to increase production output and efficiency.

4. INDUSTRY OVERVIEW (Cont’d) We have in-house capabilities to develop new products that provide us with a platform for us to address new market segments and business opportunities. Demand! supply conditions As the Latex Gloves manufacturing industry in Malaysia is predominantly export-oriented, demand dependencies for this industry will be focused on its principal export markets. In 2006, the total export value of Latex Gloves amounted to RM5.4 billion. Between January and September 2007, the total export value of Latex Gloves amounted to RM4.9 billion. Malaysia’s largest export market is the USA, which represented 38.8% of total exports in Rubber Gloves in 2006. This is followed by Germany, UK and Japan which accounted for 6.3%, 6.2% and 5.1 % of total exports by value respectively. Between January and September 2007, USA is the largest export market representing 35.9% of Malaysia’s total exports in Rubber Gloves. This is followed by Germany, UK and Japan which accounted for 8.1 %, 6.2% and 5.0% respectively. (Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) The main supply dependencies for the manufacturing of Latex Gloves industry are: Natural rubber latex; and Synthetic latex.
The bulk of the natural rubber latex is available from local supply. In 2006, local production of natural rubber reached 1.3 million tonnes. Between January and June 2007, the production of natural rubber amounted to 590,100 tonnes. Malaysia also imports natural rubber from overseas. In 2006, Malaysia imported 521,669 tonnes of natural rubber mainly from ASEAN countries. As for synthetic latex, Malaysia has one synthetic latex plant that started operations in 2003. Most of the synthetic latex used is imported from a number of overseas countries. In Malaysia, natural rubber accounted for 80% of total Latex Gloves, whilst synthetic rubber accounted for the remaining 20%. In addition, the manufacturing of Latex Gloves also uses chemicals and fuel materials. Following is an analysis of the local production and import of natural rubber and synthetic latex: (a) Local production of natural rubber • Between 2002 and 2006, production of natural rubber registered an average annual growth rate of 9.6%. In 2006, production of natural rubber increased by 14.0%, to
1.3 million tonnes. Between January and June 2007, the production of natural rubber amounted to 590,100 tonnes.
• Between 2002 and 2006, the sales value of rubber remilling and rubber latex processing increased at an average annual rate of 31.5%. In 2006, sales value of rubber remilling and rubber latex processing increased by 59.2% to reach approximately RM8.6 billion. Between January and September 2007, sales value of rubber remilling and rubber latex processing increased by 3.1 % to reach approximately RM6.7 billion compared to the same period in the previous year.

4. INDUSTRY OVERVIEW (Cont’d) • Between 2002 and 2006, production quantity of processed latex decreased at an average annual rate of 1.4%. In 2006, the production quantity of processed latex increased by 17.3% to reach 183,400 tonnes. Between January and September 2007, the production quantity of processed latex declined by 2.6% to reach 135,865 tonnes compared to the same period in the previous year. (b) Imports of natural rubber
• Between 2002 and 2006, import quantity of natural rubber increased at an average annual rate of 3.4%. In 2006, import quantity of natural rubber increased by 13.0% to reach 521,669 tonnes. Between January and June 2007, import quantity ofnatural rubber amounted to 257,959 tonnes.
• Between January and June 2007, Thailand remained the largest source of import of natural rubber, which accounted for 76.8% of Malaysia’s total imports of natural rubber in tenns of quantity. This was followed by Vietnam, Philippines, Myanmar, Indonesia, Cambodia, India and other countries.
• Between 2002 and 2006, the import value of natural rubber latex increased at an average annual rate of 16.6%. In 2006, import value of natural rubber latex increased by 17.4%, to reach RMI.3 billion. Between January and September 2007, import value of natural rubber latex decreased by 0.3% to reach RM982.5 million.

 

(c) Imports of Synthetic Rubber
• Between 2002 and 2006, the import value of synthetic rubber increased at an average annual rate of 23.3%. In 2006, the import value of synthetic rubber increased by 33.0%, to reach approximately RMl.l billion.
• Between January and September 2007, the import value of synthetic rubber increased by 9.7% to reach RM888.0 million compared to the same period in the previous year.
• Between 2002 and 2006, the import value of other synthetic latex decreased at an average annual rate of 1.2%. In 2006, import value of other synthetic latex used for the manufacturing ofNitrile Gloves increasedby43.8% to reachRM107.4 million.
• Between January and September 2007, the import value of other synthetic latex used for manufacturing of Nitrile Gloves increased by 40.0% to reach approximately RMlll.0 million compared to the same period in previous year.
• In 2006, Japan, Taiwan and the USA were the major sources of imports for other synthetic latex of the type used for the manufacturing of Nitrile Gloves. Japan, Taiwan and the USA accounted for 50.7%, 16.9% and 16.2% of total imports under this category. Other import countries include UK, Gennany, Belgium, Singapore, Hong Kong and others.
• Between January and September 2007, Japan, Taiwan and the USA accounted for 45.0%, 16.9% and 15.9% of total imports under this category. Other import countries include UK, Gennany, Italy and others.

 

(Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) 4. INDUSTRY OVERVIEW (Collt’d) 4.8 Substitute products There is no threat of substitute products. At this point in time, there are no substitutes for gloves with the exception of not wearing any gloves. Unfortunately not wearing gloves is not a viable alternative. In addition, professions in some industries are required to wear gloves such as in healthcare institutions, dental clinics, research and scientific laboratories, food and beverage manufacturing, and high technology manufacturing. The only other manner whereby some may consider as substitute products is the use of different raw materials, such as synthetic latex as opposed to natural rubber. Some of the synthetic materials include polyvinyl chloride, neoprene/polychloroprene, polyisoprene, and polyurethane materials depending on the application. Nevertheless, these are still Latex Gloves, albeit made from a variety of different raw materials. (Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) Different types of synthetic materials exhibit different properties including tensile strength, level of resistance to chemicals and solvents, elasticity, elongation and other properties. Our Group manufactures a range of natural rubber and synthetic Latex Gloves such as Nitrile Gloves to meet customers’ requirements. 4.9 Industry’s reliance on and vulnerability to imports The Latex Gloves Industry in Malaysia is dependent on imports of the following raw materials for the production of natural rubber and synthetic gloves. The main supply dependencies for the manufacturing of Latex Gloves industry are: (i) Natural rubber latex; and
(ii) Synthetic latex.

Although the bulk of the natural rubber latex is available from local supply, Malaysia is still reliant on imports of natural rubber. In 2006, the production of natural rubber in Malaysia reached 1.3 million tonnes. Between January and June 2007, the local production of natural rubber amounted to 590,100 tonnes. However, in 2006, Malaysia also imported approximately 521,669 tonnes of natural rubber from ASEAN countries. As for synthetic latex, Malaysia has one synthetic latex plant that started operations in 2003. Therefore most of the synthetic latex used is primarily imported from a number of source countries overseas. In 2006, the import value of synthetic rubber increased by 33.0% to reach approximately RMl.l billion. The import value of other synthetic latex (sub-sector of synthetic rubber) used for the manufacturing of Nitrile Gloves increased by 43.8% to reach RMI07.4 million and were mostly imported from Japan, Taiwan and the USA, which accounted for 50.7%,16.9% and 16.2% of the total imports respectively. In Malaysia, consumption of natural rubber for the manufacturing Latex Gloves accounted for 80% of total consumption, whilst consumption of synthetic rubber accounted for the remaining·20% in 2007. (Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) 4. INDUSTRY OVERVIEW (Cont’d) 4.10 Our market coverage, position and share In the 6 months FPE 30 September 2007, approximately 98.6% of our revenue was contributed from sales to overseas market. We exported to 17 countries including the USA, Japan, Germany, Australia, UK, France, Switzerland, Brazil, Greece, Netherlands, Ukraine, Vietnam, Hong Kong, Canada, Pakistan, Korea and Libya. Our products are also sold in Malaysia. In 2007, the market size for Latex Gloves in Malaysia based on an annualised output and output value were estimated at 41.3 billion pairs and RM5.8 billion in value. Our Group’s market share and our market share based on production by types of rubber in Malaysia are as follows: Market size in 2007  Our Group’s production in FYE 2007  Our Group’s market share  Output in Billion Pairs*  Output Value in RM’billion *  Million pairs  RM’million  Output 0/.  Output value %  Total  41.3#  5.8  1,157  240.9  3  4  Natural rubber Latex Gloves  33.1  654  2  Synthetic Latex Gloves  8.3  503  6
Notes: Annualisedfigures
* # Does not add up due to rounding (Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) Based on our Group’s turnover of RM240.9 million for the FYE 2007 (taken as a proxy for calendar year 2006), our Group is ranked seventh among manufacturers within the Latex Gloves industry in Malaysia in 2006 based on turnover. 4.11 Government laws and regulations (i) Malaysian laws and regulations (a) Manufacturing licence Apart from the normal manufacturing licences and other industry-based permits, licences, standards and regulations, there are no material government laws, regulations and policies that may impede on our Group’s performance and growth within a free trade enterprise environment. Application of a manufacturing licence under the Industrial Coordination Act, 1975 is mandatory for companies with the shareholders’ funds of RM2.5 million or above, or engaging 75 or more full-time employees. On 22 September 2006, the manufacturing licence from MIT! to manufacture Latex Gloves was issued to HSB. This licence is effective from 8 September 1992. 4. INDUSTRY OVERVIEW (Cont’d) (b) Purchase licence for rubber According to the MRB, any person involved in the buying or selling of rubber, or buying rubber for the manufacture of rubber products, is subjected to the Malaysian Rubber Board (Licensing) Regulations 1997. HSB has obtained a licence from the MRB to buy rubber for the manufacture of rubber products. The licence is valid between I July 2007 and 30 June 2008 and this is renewable on a yearly basis. (c) Export licence for Rubber Gloves According to the MRB, any person involved in shipping rubber or exporting of Rubber Gloves, is subjected to the Malaysian Rubber Board (Licensing) Regulations 1997. HSB has obtained an export licence from the MRB that permits it to export Rubber Gloves. The licence is valid between 1 February 2008 and 31 January 2009 and this is renewable on a yearly basis. (d) Environment regulations (i) The government regulations for the disposal of scheduled waste and sludge resulting from manufacturing processes falls under the Environmental Quality (Scheduled Wastes) Regulations 1989. Wastes from Latex Gloves manufacturing, like all manufacturing wastes, if not treated and disposed properly would pollute the environment, especially the waterways in the case of Latex Gloves manufacturing. Scheduled waste created during the production of Latex Gloves is categorised under Scheduled Waste from Specific Sources in the Environmental Quality Regulation 1989. This includes latex effiuent, rubber or latex sludge containing organic solvents or heavy metals from the following sources: (a) Rubber or latex sludge contammg heavy metals from the wastewater treatment system of rubber products manufacturing plant;
(b) Rubber or latex sludge containing organic solvents from rubber products manufacturing plant; and
(c) Latex effiuent from rubber products manufacturing plants.

The management has appointed Kualiti Alam Sdn Bhd to dispose the scheduled waste produced during the manufacturing process. (ii) Any installation of equipment, plant or facility for the purpose of heating or generating power that is rated to consume pulverised fuel or any solid fuel at 30 kilogram or more per hour, or any liquid or gaseous at 15 kilogram or more per hour, have to obtain approval from the Department of Environment (“DOE”). 4. INDUSTRY OVERVIEW (Cont’d) Our subsidiary, HSB has obtained approval from the DOE on the installation of the following equipment: 7 units ofthennal oil heaters; 3 units ofbiomass heaters; and 2 units ofscrubbers. Our Group has a total of 3 biomass heaters in our manufacturing operations, all ofwhich have been approved by the DOE. Our Group complies with the requirements of the DOE for the emission of ashes from our biomass heaters. Further, our subsidiary, HSB, has also obtained approval from the DOE for the installation of the following equipment at our proposed 41h Plant: 4 units ofchimneys; and 4 units ofscrubbers. (iii) Any discharge ofeffluent has to comply with the parameters required under the Regulation of Environmental Quality (Sewage and Industrial Effluents) Regulations 1979. (Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) Our Group has installed 3 in-house wastewater treatment systems to ensure that the discharged water is adequately treated. The treated water is also sent to an independent third party for testing on a regular basis, to ensure that the discharged water is adequately treated based on the DOE’s requirements and standards. (e) Other Regulations (i) In 2006, MRB introduced a new ruling, whereby Malaysian made natural rubber Latex Gloves with a protein content of more than 400 microgram per gram will be barred from exports. This new ruling is not applicable for industrial and household gloves. The MRB has the authority to conduct surveillance visits and collect samples from manufacturers and traders of Latex Gloves for testing using ASTM D57l2:99 test method. This practice is to monitor and restrict the export of gloves with protein content exceeding 400 microgram per gram in Malaysia. According to the Malaysia Rubber Board (Licensing) Regulations 1997 and Malaysia Rubber Board (Licensing Amendment) Regulations 2002, the MRB may take punitive measures such as compound, charge in court, revocation and suspension of certificate if any of the manufacturers or traders ofLatex Glove are found to be non-compliant. Our Group complies with the requirements of protein content as required by the MRB and has never been found to be in non-compliant. (Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) 4. INDUSTRY OVERVIEW (Cont’d) (ii) Under the Factories and Machineries Act, 1967, various regulations are established for registering equipment with the Department of Safety and Health (“DSH”). Our Group had registered all the machineries with the DSH and had complied with all the relevant regulations under the Factories and Machineries Act, 1967. (iii) Under the Occupational Safety and Health Act, 1994, the employer has a duty to protect the safety, health and welfare of all his employees and requires the employer to adhere to various guidelines to comply with this duty. We have complied with all the relevant guidelines. (ii) Overseas Government Regulations One of the areas of overseas government regulations that is relevant to Latex Gloves manufacturers is the FDA to ensure that the quality compliance is in accordance with the FDA standards. Similarly, all Latex Gloves that are exported to the European Union must also comply with the Medical Devices Directive (EC Directive 93/42/EEC). This directive regulates the export of medical gloves into the European Union. Malaysian Latex Gloves exporters must have appropriate quality management system certifications. Each of these countries have their own standards whereby exporters of Latex Gloves need to conform to, for example medical gloves are covered under European standards EN 455, EN 556-1 and EN 1041 which are equivalent to the ASTM standard used in the USA. Manufacturers of Latex Gloves who are exporting to these countries must continue to demonstrate that their gloves comply with the relevant standards by performing quality control checks. Non-compliance to these relevant standards will result in the detainment of entry of products into the country. In the USA, the FDA places exporters on Import Alert if they are found to be non-compliant. Exporters who have been placed on Import Alert by the FDA will have their shipments detained and their gloves will only be admitted to the USA subject to presentation of evidence of compliance. Requirements for evidence of compliance will depend on the Detention Level prescribed by the FDA. Once exporters are removed from the FDA Import Alert list, they will revert to normal practice ofrandom checking without detention. (iii) Government incentives As part ofthe Malaysian government’s intention to nurture the growth and development of the manufacturing industry, the government provides the following incentives for eligible companies: (a) Pioneer Status;
(b) Investment Tax Allowance; and
(c) Reinvestment Allowance.

The production of latex products including Surgical Gloves and safety/special function gloves are listed as a promoted activity/product .eligible for consideration either for Pioneer Status or Investment Tax Allowance under the Promotion of Investment Act 1986. 4. INDUSTRY OVERVIEW (CoIII’d) Some of the benefits of the respective incentives include: (a) Pioneer Status
A company eligible for Pioneer Status will enjoy a 5-year partial exemption from the payment of income tax.
(b) Investment Tax Allowance
A company eligible for Investment Tax Allowance gets an allowance of 60% on its qualifying capital expenditure (such as factory, plant, machinery or other equipment used for approved project), which are incurred within 5 years from the date of the first qualifying capital expenditure.
(c) Reinvestment Allowance

AU manufacturing companies that have been in operation for at least 12 months which have incurred qualifying capital expenditure to expand production capacity, modernise and upgrade production facilities, diversify into related products, and automate its production facilities can obtain a Reinvestment Allowance. Presently, HSB is enjoying the Reinvestment Allowance incentive. (Source: Independent Market Research Report prepared by Vital Factor Consulting Sdn Bhd) 4.12 Prospects and future growth (i) Drivers of growth The drivers ofgrowth in the Latex Gloves industry are as follows: (a) Growth in the consumption of Latex Gloves by end-user industries such as hospitals, healthcare, food processing, high technology sectors including electronic and bio­technology industries. As the use of Latex Gloves are prevalent in the healthcare sectors, any outbreak of diseases wiU also inadvertently drive demand for Latex Gloves;
(b) Increase in the demand for Latex Gloves will come from export markets as the industry is primarily export-oriented. Growth in demand will come from major export markets including the USA, UK, Japan, Germany, Brazil, Italy, France and other countries;
(c) Innovations and developments in Latex Gloves for new applications would create new demand from existing or new end-user industries;
(d) Growth in the healthcare industry sectors including, among others, planning and development of new hospitals and other institutions, will also generate demand for Latex Gloves; and
(e) Socio-economic growth such as GDP growth and population growth will also place increasing demand for healthcare services. This will in turn stimulate the demand for Latex Gloves as one of the critical disposable items used in the healthcare sector.

4. INDUSTRY OVERVIEW (Cont’d) (ti) Areas of future growth The areas of future growth in the Latex Gloves industry are as follows: (a) Increasing global demand The key areas of growth will come from increasing demand from consumer countries particularly, the USA. In 2006, the USA represented 38.8% of the total exports of Latex Gloves from Malaysia. Between January and September 2007, the USA remain the largest export market representing 35.9% of Malaysia’s total exports in Rubber Gloves. This is followed by Germany, UK and Japan which accounted for 8.1%,6.2% and 5.0% respectively. As Latex Gloves have many applications, demand will come from many sectors of the industries, although the main user-industry will continue to be the healthcare industry. Some oftheotherareas ofdemandcouldcomefromcleanroomglovesand food contact gloves. (b) Increasing sales outside the USA To date, Malaysian manufacturers have focused significantly on the USA market. Other major consuming markets, especially Europe and Japan are not well represented by Malaysian manufactured Latex Gloves. As such, these markets would offer growth opportunities for manufacturers. (c) Focusing on new area of business Traditionally, the focus of the usage of Latex Gloves has been predominantly within the healthcare industry led by Latex Examination Gloves. Other applications of Latex Examination Gloves, especially within the food and beverage manufacturing, laboratory testing field, high technology manufacturing, hospitality and even the household markets are underdeveloped. As such, they offer incremental growth opportunities for manufacturers. (d) New materials In light of the natural rubber allergy issue, there has been a shift from natural rubber Latex Gloves to lower protein powder free and Synthetic Gloves. Although new materials are substitute products for natural rubber Gloves, growth in this area is critical from the following perspectives: I. Ability to meet users’ needs and specifications, especially in the light of the natural rubber allergy issue; ii. Prevents existing customers from replacing Malaysian natural rubber Latex Gloves with new material gloves from other countries; and iii. Serves new areas of applications such as electric protective gloves, and specialised gloves for use when administering chemotherapy. Synthetic gloves such as nitrile, polyvinyl chloride and polychIoroprene/ neoprene gloves may be the next closest substitute to natural rubber Latex Gloves. 59

 

 

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