Blue Sail Medical Announces RMB 3.387 Billion Investment in New 30-Billion-Pair Annual Nitrile Glove Production Project

On June 8, Bluesail Medical announced that it plans to invest RMB 3.387 billion in a new project with an annual production capacity of 30 billion nitrile health protection gloves. Of this total, the planned capacity for the project in Zibo, Shandong Province is 10 billion units per year, while the planned capacity for projects outside Shandong Province or in “Belt and Road” countries is 20 billion units per year. The Zibo, Shandong project is scheduled to commence construction in the third quarter of 2020, marking another major move by Bluesail Medical in its health protection segment since the outbreak of the global COVID-19 pandemic.

Spurred by the global outbreak of the novel coronavirus (COVID-19) in 2020, worldwide demand for various medical protective supplies, such as nitrile gloves and PVC gloves, surged dramatically, leading to a sharp increase in prices. The pandemic has created a major turning point and strategic opportunities for the development of the medical and protective glove industry. Due to their superior protective properties, high tensile strength, ergonomic comfort, and wide range of applications, nitrile gloves have demonstrated significant long-term growth potential. During the pandemic, nitrile gloves played a crucial role, with particularly robust demand in the global market.

Liu Wenjing, Chairman of Bluesail Medical, commented on this new investment initiative: “The outbreak of the novel coronavirus (COVID-19) pandemic in 2020, coupled with the impact of influenza in the United States and the Ebola virus in Africa, triggered a surge in demand for disposable gloves, including nitrile gloves, leading to global supply shortages. This imbalance is expected to persist for a considerable period. Furthermore, as pandemic response becomes normalized, there has been a structural elevation in global public health and safety awareness. Countries, societies, and institutions are beginning to strengthen their emergency response systems, which will continue to drive rising demand for health protection products. Our new round of investment is based on global market demand and the continued implementation of the company’s ‘A’ strategy.”

With the continued rise in global infections, the expanding scope of the outbreak, and the recurring waves of the epidemic in many countries, the novel coronavirus appears likely to coexist with human society for the long term. Consequently, strong global demand for protective supplies is expected to persist for a considerable period. Since the outbreak began, Bluesail Medical has been steadily increasing its investments in the health protection sector.

The announcement stated that, prior to the outbreak of the COVID-19 pandemic, the Company had convened its Board of Directors on August 2, 2019, and September 20, 2019, to review and approve the public issuance of RMB 3.1 billion in convertible bonds. Of the proceeds raised, approximately RMB 600 million were allocated for investing in and constructing the “Annual Production Capacity of 4 Billion PVC Health Protection Gloves Project” and the “Phase III Annual Production Capacity of 200 Million Health Protection (Novel Gloves) Project.” Although the Sino-U.S. trade dispute had not yet been resolved in 2019, driven by the Company’s sustained confidence in industry development, it proactively initiated the investment and construction of the aforementioned projects using its own funds in October 2019. The first phase, the “Annual Production Capacity of 2.5 Billion PVC Health Protection Gloves Project,” was successfully commissioned on April 28, 2020, providing partial relief to the severely constrained production capacity. Meanwhile, in February 2020, the Company fully launched the convertible bond-funded projects, namely the “Annual Production Capacity of 2 Billion PVC Health Protection Gloves Project” and the “Phase III Annual Production Capacity of 200 Million Health Protection (Novel Gloves) Project.” On February 11, 2020, the Company announced the “60 Million Pairs/Year Surgical Gloves Project,” as well as additional projects such as the “1.25 Billion Pieces/Year TPE Protective Gloves” project, utilizing existing facilities.

Even after the aforementioned projects are put into production, they will still fall far short of meeting the sustained robust global demand for protective glove products. Therefore, it is necessary to implement further capital expenditure plans in line with market developments to satisfy global market demand.

Upon the successful completion and commissioning of the new annual 30-billion-unit health protection (nitrile) glove project, Bluesail Medical’s total production capacity for medical and protective gloves will reach nearly 60 billion units. The product portfolio will encompass a comprehensive range of series, including medical nitrile gloves, PVC gloves, latex gloves, and surgical gloves, catering to diverse application sectors such as the food and beverage industry, laboratories, electronics manufacturing, household use, civil applications, beauty and hair care, and pet care. This expansion will position Bluesail Medical as the company with the most complete glove product categories, the most rational industrial layout, and the most integrated industry chain globally.

Meanwhile, the new project aligns with Bluesail Medical’s strategic development plan for its health protection segment. It is reported that since 2016, Bluesail Medical has formulated an “A+X” development strategy, namely a dual-drive model of “Health Protection + Medical Devices,” and has been continuously advancing its implementation in accordance with this strategy. The proposed annual production capacity of 30 billion nitrile gloves for health protection not only implements the company’s long-established business development strategy in the health protection sector but also responds to the new market changes and conditions emerging since the global outbreak of the pandemic. The aim is to further consolidate the company’s leading position in the global medical and protective glove industry and enhance its long-term sustainable profitability.

Bluesail Medical is also gradually transitioning from the "Global Glove King" to a leading global health protection enterprise, with its full industry chain for health protection being further implemented.

In recent years, Bluesail Medical has continuously expanded its product matrix in the health protection segment through independent R&D innovation and strategic investments. In 2016, an M&A fund under Bluesail Medical acquired a controlling stake in Wuhan Bikair, whose core business involves various medical first-aid kits. Wuhan Bikair is a key supplier to Mercedes-Benz and BMW, as well as the exclusive global supplier to Tesla. Since the outbreak of the pandemic, Wuhan Bikair rapidly developed various epidemic prevention and care kits, making significant contributions to the fight against the virus. The product layout of the health protection segment was also accelerated during the pandemic, with expansions into the upstream and downstream industrial chains of non-woven fabrics and the addition of new product lines such as disinfection and care. Currently, Bluesail Medical’s health protection products have extended from its core business of medical and health protection gloves to cover multiple product series, including medical protection, disinfection and care, and emergency rescue, thereby establishing a complete industrial chain for health protection.

Through ten years of persistent independent research and development, Bluesail Medical has achieved significant breakthroughs in its technological reserves for automation, intelligence, and informatization. These advancements include independently developed automatic batching systems, fully automated online glove former counters, fully automated packaging, fully automated logistics, fully automated warehousing systems, fully automated temperature and process parameter control systems, and real-time online monitoring technologies, thereby realizing full-process automation from raw material intake to product output. Meanwhile, the company has made leapfrog improvements in the scientific management of power systems and human-machine interaction. Automation across the entire production process and intelligence in key processes have been largely realized, as Bluesail Medical rapidly advances toward its goals of establishing unmanned and smart factories.

Bluesail Medical’s indirect controlling shareholder, Bluesail Group Co., Ltd., owns a thermal power plant, enabling an integrated combined heat and power (CHP) strategy through self-generated electricity and steam. This provides significant convenience and cost advantages in its energy structure. Meanwhile, subsidiaries under Bluesail Group can partially supply the key raw materials required for the company’s production, granting it complementary advantages across the industrial chain. As the only glove manufacturer globally with its own energy sources and related supply chain, Bluesail Medical enjoys stronger comparative advantages in operational efficiency, cost control, and pricing power over industry trends and upstream/downstream partners.

Production bases for medical and protective gloves to be established outside Shandong Province or in “Belt and Road” countries will also fully leverage the resources, brand influence, and geopolitical advantages of its subsidiary, Biosense International, in Southeast Asia. By strategically deploying operations along Belt and Road countries, the Company will form a diversified, multinational production layout, further mitigating risks associated with concentrated manufacturing, expanding its capacity for medical and protective gloves, and strengthening its competitive edge in the industry.