SINGAPORE - Malaysia-based UG Healthcare Corp launched its initial public offering (IPO) for a Catalist listing at 21.5 cents apiece.

The company, which manufactures and distributes natural latex and nitrile examination gloves, is offering 28.8 million shares to raise about $4.2 million in net proceeds.

The sum raised will be deployed to

* expand production capacity;

* expand sales and distribution network;

* undertake research and development of new products; and

* be used for general working capital.

The bulk of the offer is via placement, with only 1.8 million shares set aside for public subscription.

For the year to June 30, UG reported a 4.3 per cent rise in revenue to $49 million, on the back of higher sales of gloves.

Gross profit grew by 25.8 per cent to $10.2 million, in tandem with higher sales and an improvement in its overall profit margin, which increased by 3.6 percentage points 20.8 per cent, mainly due to lower raw material prices.

The group benefited from bulk purchase on raw materials and achieved economies of scale in production.

Net profit rose by 28.9 per cent to $4.9 million.

UG has two manufacturing facilities that are capable of producing up to some 1.3 billion pieces of gloves annually.

This is complemented by its extensive global distribution network, established through its own distribution companies based in the US, Britain, Germany, China and Nigeria, as well as through third party distributors.

This facilitates the sale of its products to more than 50 countries.

UG noted that usage of disposable gloves in healthcare industries in emerging markets has generally lags behind mature markets.

"With greater awareness of hygiene amongst healthcare professionals and the public, as well as a convergence toward internationally accepted healthcare standards, there is a potential for growth in demand for disposable gloves," it said.

The outbreak and prevalence of infectious diseases are a strong catalyst in the demand for disposable gloves, it added.

The IPO closes on Dec 4.