Latex giant Ansell bullish despite Trump’s tariff moves
Personal protective equipment giant Ansell is confident it can weather the tariff storm, workers’ rights concerns in Malaysia and a US investigation into medical imports.
The Melbourne-based business held its annual general meeting on Wednesday, with chairman Nigel Garrard reflecting on a “successful” year for the international company.
Ansell produces latex gloves and other PPE in nine countries; These include Asian countries that Donald Trump’s administration has hit with above-the-baseline tariffs.
The main manufacturing hubs Malaysia (19% tariff) and Sri Lanka (20%) pose the greatest exposure to Ansell, with a smaller footprint in China (30%).
Given that Ansell makes nearly half of its US$2 billion ($3.1 billion) in annual sales in the US, tariffs are naturally concerning.
“Our teams responded to the higher tariffs through price increases while also reducing our sourcing exposure to China, where imports are relatively more highly tariffed,” Mr. Garrard said.
“We are trying to transfer all the costs of the tariffs to our customers as appropriate.”
Ansell sees its place in the market improving, given that most of its competitors source from Asia and “the economics of shifting production to the US remain difficult,” according to its annual report.
President Trump also launched a national security investigation into medical imports in September, naming PPE that Mr. Garrard said Ansell would handle through industry bodies.
“There will be a result next year,” he said.
“Our view is that there are no national security issues with the gloves or gowns we supply… so we do not expect there to be a material change.”
Mr Garrard also addressed allegations of worker abuse at Malaysian supplier Mediceram following the ABC’s report in September that more than 200 Bangladeshi workers were mistreated.
Allegations include wage theft, forced labor and “debt bondage” where workers are forced to pay huge fees to recruiters to find roles for them.
“We are pleased to report that recruitment fees have now been fully refunded to existing workers,” he said, adding that the same had been done for more than 20,000 workers.
“Workers’ rights are not an easy situation in Asia.
“When you look at the history of what this company has done, sometimes I think Ansell is in an unfair position.”
The chairman said Ansell had been misled by Mediceram, which signed the supplier code of conduct, but downplayed its role in the overall business, saying it represented less than 0.1 per cent of global supplier spend.
The abuses were lodged as a complaint with a business conduct watchdog, which Ansell said would “deal with it in good faith.”
Last year, Ansell achieved sales growth of 9.4 percent in healthcare and 5.6 percent in industrial segments.
Trading began immediately after the end of the general meeting on Wednesday, with the share price rising almost seven per cent to $36.70 in the opening hour.
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