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Mercator Medical has launched a nonwoven fabric products manufacturing plant

As announced, only one year after the construction began, Mercator Medical launched the production plant in Pikutkowo n…

As announced, only one year after the construction began, Mercator Medical launched the production plant in Pikutkowo near Włocławek, 5 km away from its logistics centre in Brześć Kujawski. The Pikutowo plant currently manufactures surgical drape sheets. However, the complete range of nonwoven products offered by Mercator Medical in Europe, imported mainly from the Far East, also includes various types of medical and protective clothing.

The launched production provides the basis for the certification of our products. We expect that we will be able to sell products from Pikutowo to customers through our own distribution channels in Q4. A facility located in Europe, in Poland, allows us to better respond to the needs of hospitals in terms of nonwoven products and increases business efficiency”, said Wiesław Żyznowski, PhD, President of the Management Board, Mercator Medical SA.

We are going to reduce the turnover time for nonwoven products from 4.5 to 1.5 months, thus freeing up cash by reducing stocks. In its first year of operation, the plant in Pikutkowo may earn approximately PLN 3.5 million of revenue, with the target value of PLN 15 million per year”, added Witold Kruszewski, Member of the Management Board for Finance at Mercator Medical S.A.

The current production capacity of the Mercator Medical Group’s nonwoven fabric products manufacturing plant is approximately 29,000 items per month. Ultimately, with only a few hundred thousand zlotys of expenditure, it will increase to 155,000 products per month. In addition, the Pikutkowo plant will also be able to manufacture medical dressings. The assortment of nonwoven products generates currently approximately 5% of Mercator Medical Group’s revenues, whereas dressings – approximately 4% of sales. The rest – approximately 91% of revenues – is generated by the sales of single-use gloves coming from the company’s own production, as well as purchased from third parties. Revenues of the Mercator Group for the last four quarters amounted to nearly PLN 284 million.

The estimated value of the bidding market for the surgical drape sheets is PLN 63 million in Poland, Romania, Bulgaria and Hungary, i.e. in markets where the Mercator Group currently sells its nonwoven range.

In three years we intend to increase the market share in Poland from 5% to 20%, using the competitive advantages offered by the Pikutkowo plant. This is also a good base for intensifying or starting the sales of surgical kits in other markets “, said President Żyznowski.

Investment in the Pikutowo plant absorbed PLN 4.2 million and will ultimately be financed by own funds in 80% and by a bank loan in 20%. The production hall together with office rooms and staff rooms has an area of 1,033 sq. m., and the building is located on a plot of 1 ha.

Construction of the Pikutkowo plant is one of the four pillars of Mercator Medical’s strategy for 2016-2018. The other three pillars are: construction of the nitrile gloves factory (a complementary product for the currently manufactured gloves of natural latex), expansion in Western Europe, and strengthening of the position in our region. In January this year we started extension of the gloves factory in Thailand by the addition of a synthetic latex gloves production facility (estimated investment: PLN 119 million). The first production line will be finished in the coming weeks, and assembly of the last one will be completed at the end of 1H 2018. As a result, starting from the second half of the year, Mercator Medical’s manufacturing capacity will increase by 150% and reach 3 billion gloves per year.

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Mercator Medical with its seat in Kraków is a producer and distributor of disposable medical and household gloves, medical dressings as well as medical nonwoven products whose history dates back to 1989. It has a dominant market position in Poland and is an important entity on the international scene.

The current construction of the second gloves factory in Thailand (the investment worth PLN 119 million is to be finished in the first half of 2018) will increase the company’s production capacity by 150% to reach 3 billion gloves per year. In Q3 2017 the manufacture of nonwoven products started in Pikutkowo near Włocławek. Mercator Medical has a distribution centre in Brześć Kujawski and runs direct distribution in Poland, Russia, Romania, Czech Republic, Ukraine, Hungary and Slovakia. Mercator Medical operations have a global reach – local distributors sell its products in nearly 50 countries on five continents, including the American market, and the company focuses on the ongoing geographic expansion .

Since 2013 Mercator Medical shares have been listed on the regulated market of the Warsaw Stock Exchange. The latest analytical reports prepared by brokerage houses indicate a 30%-50% growth potential for the company’s share price (DM BOŚ with TP of PLN 27.0, November 2016; Vestor DM with TP of PLN 23.1, September 2017). For more information: www.mercatormedical.eu.

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