SUPERMAX Corporation Bhd is expected to increase net profit by 29.5 per cent to RM163.9 million in financial year 2010, according to MIMB Research.

This is due to the group's capacity expansion of 21.5 per cent in financial year 2010 and 23.65 per cent in financial year 2011, it said in a research note on Wednesday.

The estimation was in line with Supermax's in-house earnings forecast of RM168 million, said MIMB Research, the research division of MIMB Investment Bank Bhd.

With 14.5 billion pieces of glove production capacity as at financial year 2009, and then expanded by 4.2 billion to 17.6 billion pieces per annum in financial year 2010, Supermax has become the second largest glove manufacturer in the world.

'For future expansion, it plans to increase its production line to 185 lines by 2011, which would boost its production capacity to 21.7 billion,' said MIMB Research said.

'Thus, we believe that the expansion will facilitate Supermax to cater to promising demand of gloves,' it said, adding that the world consumption of gloves was expected to increase by eight to 10 per cent per annum.

In addition, MIMB Research said ventures into China and India are 'a great opportunity for Supermax as these markets have a combined population of 2.5 billion'.

'Apart from the huge population, the potential of these markets has also been driven by the reforms of healthcare and regulations in China, India, Mexico and Russia, the China-Asean Free Trade Agreement and the brighter outlook of China market,' it said. - BERNAMA