Ansell looks to expand capacity as Covid lifts results

Richmond, Australia – Australian producer of protective systems, Ansell Ltd is looking to invest $95-105 million (€80-88 million) in the next 12 months to expand production capacity and efficiency, as the Covid-19 pandemic drives demand.

The company increased manufacturing capacity for ‘chemical protective clothing’ products at its production facilities in Xiamen, China and Colombo, Sri Lanka, by 40% following the pandemic.  

“We are in the process of expanding capacity further at those plants,” said Ansell in a 25 Aug full year financial report statement. 

In addition, the company said it was “localising production” in Brazil and Lithuania, but did not elaborate further. 

Furthermore, Ansell is working to complete a $32 million (€27 million) expansion programme at its Lat Krabang, Thailand plant, which started in October 2019.

The project, according to Ansell, will increase the facility's manufacturing capacity of single use gloves by roughly 35%.

In addition to ongoing investment in capacity, Ansell said its next year's capex of $95-105 million will focus on automation to drive efficiencies. 

For the 2020 fiscal year, ended 30 June, Ansell saw its results lifted by the Covid-19 pandemic, as demand was particularly high for exam/single use gloves.

The company recorded sales of $1.6 million, up 7.7% compared to the year before. EBIT was up 8.3% year-on-year at $219 million, driven by sales growth and favourable raw material costs.

Ansell’s healthcare business, which manufactures products such as exam/single use gloves for the healthcare industry, grew 13.8%, posting sales of $895 million for the full year. 

The business, Ansell said, entered the fiscal year with strong momentum which was further accelerated due to Covid-19 related demand.

Sales in the industrial unit came in at $719 million, registering a modest 1.3% growth, “despite severely impacted macro backdrop.”

Here, Ansell said, increased demand for chemical protective clothing and gloves "more than offset" softness in products for mechanical applications.