Tuesday, October 7, 2014

Combat Boat





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MYpalmoil

MYpalmoil

'Condoms no more a dirty business'

Posted: 05 Oct 2014 05:28 PM PDT

What has condoms got to do with palm oil? Condom lubricant is still predominantly sourced from the petrochemical industry. This can change if and when oleochemical manufacturers are ready and willing to offer the prophylactics industry the right specifications for pharmaceutical lubricant at the right price.

As it is, Karex Bhd, the world's biggest condom maker, is already sourcing stretchy latex from Malaysia's plantation giants' rubber estates and that of smallholders.


While the big boys of Malaysia's rubber industry are the glove makers, there is a less heralded group generating expanding returns into our economy. With the right push from the government, Karex Bhd tells OOI TEE CHING condom exports can scale new heights.


GOH Miah Kiat is probably one of the few men in Malaysia whose wives merrily pack condoms into their luggages whenever they go overseas. "She wishes me fruitful return every time I go on a trip," beamed the happily married man and father of three children.

As head honcho of the world's biggest condom manufacturer Karex Bhd, Goh told Business Times that while the prophylactics industry is small compared with the glove manufacturers in Malaysia, there is actually better opportunities for condom makers to penetrate more markets and move up the value chain.

In the medical world, Foley catheters and surgical gloves are classified as Class 2A. When it comes to condoms, healthcare practitioners categorise them under higher safety requirement of Class 2B. This is because as a life-saving tool, condoms need to be produced in a clean environment and thoroughly tested as a safe-to-use product.

But unlike rubber gloves, more investment is needed in quality control to ensure the condoms do not leak and comply with other specifications of strength, length and visual properties. Also, every piece has to be hermetically sealed to prevent contamination.

Goh explained that a lot of investment goes into ensuring condoms comply with stringent requirements under the ISO 4074, World Health Organisation (WHO) specifications and ASTM D3492-03 standards.


In order to meet the ISO 4074 standard, each condom is subjected to 100 per cent electronic testing. There are also random samplings of the condoms to test the quality and elasticity of the rubber.

In an electrolyte water test, condoms are filled with water before they are submerged in a water tank. If there are pinholes in the condom, the machines detect them automatically. 

Then, there is the burst test where air is pumped into condoms like it is done for balloons. A condom must be able to hold a minimum 18 litres of air and record air pressure of at least one kPa before bursting.

The condom's width uniformity is measured by laying it flat across a ruler. Condoms are sold at varying widths of between 49mm and 60mm, of which 52mm is the most popular. The ISO 4074 standard requires a minimum length of 160mm, but the WHO mandates longer condoms of a minimum 180mm for their targeted markets. Indeed, one size does not fit all.

Since condom manufacturing is an integral part of the medical device sector, such businesses are seen as hi-tech and knowledge-based.

In the last decade, Karex pumped in a lot of money, time and effort in automating as many processes along its productions lines. "Automation is key to ramping up productivity. However, further capital expenditure is required. Government incentives, such as re-introduction of reinvestment allowance, is vital," Goh said.

As the world's biggest condom maker by volume, Karex produces four billion annually, more than any other single manufacturer. Industry consultants estimate the global condom market is worth US$6 billion (RM19.68 billion) in 2015, or about 27 billion condoms.

Karex's condoms make up 15 per cent of the global market. With heightened awareness of safe sex, global demand is expected to grow at eight per cent annually. 

When it comes to brand recognition, leading labels Durex (marketed by Britain's Reckitt Benckiser Group), Trojan (owned by the United States firm Church & Dwight) and Lifestyles (by Australian giant Ansell Ltd) make up 25 per cent of the world's condom market. 


Apart from selling on volume, like all businesses, it is far more strategic to add value so as to sell at premium pricing. 

"This is underpinned by product development. We strive to produce our condoms in an assortment of colours, texture, shapes and flavours," he said.

Among premiumly-priced condoms are those that "glow-in-the-dark", resembling the Star Wars lightsaber. A cheeky marketing pun suggests that in preparation for a night to remember, one gets to "rise-and-shine" and play "hide-and-seek" with his lover.

While glowing looks can be eye-catching, Goh said it is the "feel" of the condom that keeps the customers coming back. The challenge is for manufacturers to come up with thin and yet durable condoms that can withstand accidental punctures from long fingernails and body piercings.

According to the Guinness World Record, the Aoni condom is the world's thinnest rubber measuring just at 0.036 millimetres. China's Guangzhou Daming United Rubber Products Ltd, that makes 200 million Aoni condoms annually, snagged this "barely-there" tantalising title from Japan's Okamoto Industries Inc's thinnest variant of 0.038mm.

The Bill and Melinda Gates Foundation recently awarded US$100,000 in grant to the University of Manchester to develop nano composite materials for next-generation condoms. They are experimenting with a "miracle material" called graphene to make thinner and stronger condoms. 

Goh added that Karex is also in the thick of action to come up with "super-duper condoms" that are more desirable to use, which could stimulate global usage to prevent unwanted pregnancies and curb the spread of sexually transmitted diseases.

"Graphene is 1 atom thick and 200 times stronger than steel. We've been running several experiments on our own to see if graphene can be combined with stretchy latex to produce a new material that can be thinner, thus enhancing the natural sensation," he said.

Karex, founded by the Goh family in Johor in 1988, started off in the rubber processing back in the 1960s. Since hitting the headlines as the world's largest condom maker during the last few years, it continues to thrill investors by plunging into the lucrative pool of condom branding.


Last week, Karex bought a 55 per cent stake in Boston-based Global Protection Corp for US$6.6 million. 

As brand owner of the ONE condom, Global Protection Corp granted exclusive rights to Karex to expand this "fun-loving" sensation into Asia, North Africa and the Middle East. ONE condom is now the fourth most popular brand after Durex, Trojan and Lifestyles. 

Global Protection Corp founder Davin Wedel, who is also a popular thought leader in sexual health, highlighted ONE condom is gaining fast acceptance among young adults as it is marketed as fashionable and socially conscious. 

"Asia is going to create a lot of demand because our population is young. When we got into the condom business about 25 years ago, it was pretty much a dirty word. Today, things have changed," said Goh.

"We want to roll out ONE condoms in Southeast Asia by the first half of 2015. We're also looking into brand-building. Specific government tax breaks in this direction would be much welcomed," he added.

In ramping up its capacity to six billion pieces by the end of 2015, Karex's RM80 million eco-friendly factory is being built on a 7.3ha plot in Pontian, Johor. "We've designed it to save on electricity and water usage compared with conventional factories. There will be natural lighting, strategic sun-shading, good ventilation and rainwater harvesting features.

"When we combine these utility savings and convert them to the all familiar carbon calculation, it's a staggering 9,900 tonnes of carbon dioxide avoidance into the air. That's equivalent to the emissions of 29,000 cars in a year," Goh said.
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Duly Noted !!!




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perbaiki diri ......

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Friday, October 3, 2014

MYpalmoil

MYpalmoil

FGV back in for NBPOL

Posted: 02 Oct 2014 12:55 AM PDT

This is written by my colleague Zaidi Isham Ismail.

KUALA LUMPUR: FELDA Global Ventures Holdings Bhd (FGV) has initiated talks with Kulim (M) Bhd to buy the latter's stake in London-listed New Britain Palm Oil Ltd (NBPOL), said people familiar with the matter.

FGV has emerged as the next preferred candidate for the 48.97 per cent stake, which could cost up to RM5 billion, after Sime Darby Bhd turned down the chance to acquire it. FGV had previously submitted its bid in June.


"Yes, they are in the running now that Sime Darby has pulled out. Yes, they are in talks," a source told Business Times yesterday.

The source did not elaborate but said the FGV management has issued a gag order over the matter. When asked whether FGV is concerned about buying the stake without management control, the source said: "They have calculated the risk."

Top FGV officials declined to comment.

Sime Darby, arguably the world's largest oil palm planter by land size, announced on Tuesday it had opted against buying the stake but no reasons were given. 

Its 60-day exclusivity period to finalise the deal ended four days ago. If this deal was successful, it would have allowed Malaysia's oldest conglomerate to expand its planted area by 15 per cent to 607,218ha.

Meanwhile, analysts think the inability to exert control over NBPOL is the key stumbling block for Sime Darby. They noted that it would be pointless to spend RM5 billion on the stake if management ontrol was not in Sime Darby's hands.

"We think that the failure in taking a leading role in NBPOL despite being a major shareholder could be the major stumbling block for Sime Darby," said Public Investment Bank Bhd in its notes to investors, yesterday.

HwangDBS Research also said the key to enhancing NBPOL's earnings was for Sime Darby to assume full operational and management control.

CIMB Equities Research said the decision might be negative for Kulim, which would probably need to settle for a lower price for NBPOL.

AmSecurities noted that at the current price of £4.175 (RM22.14) per share, NBPOL was trading at a price-to-earnings ratio of 16 times the consensus earnings per share (EPS) for financial year 2014. "At a premium of between 30 and 50 per cent over the current price (£5.40-£6.30/share), NBPOL would be valued at between 21 and 24 times its financial year 2014 forecast EPS. 

"That is on the steep side and would have translated into a purchase price of between RM4.3 billion and RM5 billion for Sime Darby to assume full control of NBPOL."
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Thursday, October 2, 2014

MYpalmoil

MYpalmoil

Sime not buying NBPOL

Posted: 30 Sep 2014 09:05 PM PDT

This is written by my colleague Cheryl Achu.

KUALA LUMPUR: Sime Darby has aborted its plan to buy Kulim (M) Bhd's 49 per cent stake in London-listed New Britain Palm Oil Ltd (NBPOL).

Sime Darby, which was chosen as the preferred bidder for the stake in July, had a 60-day exclusivity period that ended two days ago on the acquisition but decided not to go ahead with it.

Its decision has now paved the way for previous suitors, which reportedly included Felda Global Ventures Holdings Bhd (FGV) and a consortium comprising the Sultan of Johor and a Singapore-listed China entity, to put in a new bid for NBPOL.


"We have decided not to proceed further at this time on the proposed acquisition of Kulim's stake in NBPOL," Sime Darby said in a filing to Bursa Malaysia yesterday, without revealing the reason for the withdrawal.

Kulim, NBPOL's single-largest shareholder, wants to sell its stake as it is unable to exert management control over the plantation group that is a source of significant employment in Papua New Guinea (PNG).

NBPOL, which is listed on the London Stock Exchange, has a market capitalisation of £750 million (RM4 billion) and is managed by a group of professional managers who own a 4.49 per cent stake via Pacific Rim Plantations Services Pte Ltd, PNG's West New Britain provincial government has an eight per cent stake.

NBPOL, which produces palm oil exclusively in PNG and the Solomon Islands, has 77,000ha of oil palm plantation, 12 palm oil mills and one refinery each in PNG and the United Kingdom.

The group is also PNG's largest sugar and beef producer via its more than 7,718ha of sugar cane plantations and 9,282ha of grazing pastures.

Besides Sime Darby, FGV were among the shortlisted companies for Kulim's stake, which is up for sale after Kulim failed to raise its stake from 49 per cent to 69 per cent in July 2013. Kulim first acquired interest in NBPOL in 1996.

Landing NBPOL stake would help FGV attain its 2020 targets, namely to achieve 8.7 million tonnes crude palm oil (CPO) production as well as a plantation landbank to 925,000ha.

Several others then entered the fray, including two plantation groups from Indonesia, Singapore's Wilmar International Ltd and plantation giants IOI Corp Bhd and Kuala Lumpur Kepong Bhd.

Yesterday, Sime Darby share price fell three sen to close at RM9.15 on Bursa Malaysia.
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Wednesday, October 1, 2014

Duly Noted !!!

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