Personal protective equipment giant Ansell is confident it can ride out a tariff storm, labour rights concerns in Malaysia, and a US investigation into medical imports.
The Melbourne-headquartered business staged its annual general meeting on Wednesday, with chairman Nigel Garrard reflecting on a “successful” year for the international company.
Ansell makes latex gloves and other PPE in nine countries, including Asian nations whacked with above-baseline tariffs by Donald Trump’s administration.
Key production hubs Malaysia (19 per cent tariff) and Sri Lanka (20 per cent) carry the biggest exposure for Ansell, with a smaller footprint in China (30 per cent).
Given Ansell makes almost half of its $US2 billion ($A3.1 billion) in annual sales in the United States, the tariffs are naturally a concern.
“Our teams have responded to the higher tariffs through price increases, while also reducing our sourcing exposure to China where imports are tariffed at a comparatively higher rate,” Mr Garrard said
“We are endeavouring to pass all of the costs of the tariffs on to our customers as is appropriate.”
Ansell is bullish on its place in the market, given most of its competitors also source from Asia and the “economics of shifting production to the US remain difficult” according to its annual report.
President Trump also opened a national security probe into medical imports in September, specifically naming PPE, which Mr Garrard said Ansell would engage with through industry bodies.
“There’ll be an outcome sometime next year,” he said.
“Our view is that there are no national security issues with gloves or gowns that we supply … so we don’t expect there to be any material change.”
Mr Garrard also addressed allegations of worker abuse at Malaysian supplier Mediceram, following an ABC report in September of mistreatment to over 200 Bangladeshi workers.
Allegations include wage theft, forced labour and “debt bondage”, where workers must repay sizeable fees to recruiters for finding them the roles.
“We are pleased to report that recruitment fees have now been fully reimbursed to current workers,” he said, adding it had done the same for more than 20,000 workers.
“This is not an easy situation, labour rights in Asia.
“I think sometimes Ansell is unfairly positioned if you look at the history of what this company has done.”
The chairman said Ansell was misled by Mediceram, which signed its supplier code of conduct, while downplaying its role in the overall business, saying it represented less than 0.1 per cent in global supplier spend.
The abuses have been filed as a complaint with a business conduct watchdog, which Ansell said it would “engage with in good faith”.
Ansell boasted 9.4 per cent sales growth in healthcare and 5.6 per cent in industrial segments last year.
Wednesday trading began just as the AGM finished, with the share price leaping nearly seven per cent in the opening hour to sit at $36.70.
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