IFC mulls $150m loan to Chinese medical gloves maker Blue Sail to build new plant

The International Finance Corporation (IFC), which owns equity stakes in many large commercial banks in emerging markets, is mulling an investment in Blue Sail Medical, a publicly-traded medical consumables manufacturer in China.

The World Bank Group’s private sector arm is considering the provision of a seven-year loan of up to $150 million to Blue Sail. The loan is subject to approval from IFC’s board of directors, and discussions around the proposal are expected to happen as early as March 3, the lending agency disclosed on Monday.

If approved, the $150 million loan will be used to help the company set up a new plant to produce much-needed nitrile gloves that are used for the prevention of coronavirus.

The overall project cost, which is estimated to be up to $350 million, will be partially covered by Blue Sail’s internal cash generation, according to the IFC disclosure.

The new plant will have an annual capacity of 20 billion nitrile gloves and will be located in Zibo, a Tier-IV city in eastern China’s Shandong Province.

As part of the proposed loan, IFC could leverage its experience in emerging markets and help Blue Sail potentially expand into Vietnam or other developing countries, said IFC. It would provide Blue Sail with “long-term financing that is not available in the Chinese market” and “potential advisory… to support manufacturers in developing countries to start or scale up PPE (personal protective equipment) production.”

Before the proposed investment, IFC had launched a $4 billion financing platform in July 2020 to boost the production and supply of critical healthcare products in developing countries to help battle the coronavirus pandemic.

The initiative, in which IFC planned to contribute $2 billion in internal resources and to raise another $2 billion, is largely aimed at private sector project to manufacture products like personal protective equipment, ventilators and other medical equipment, coronavirus test kits, therapeutic drugs, and vaccines.

Surging demand may lead to almost seven-fold profit growth

The development comes as Blue Sail is expected to book an up to 593.5% growth in its net profit attributable to shareholders for 2020, as the COVID-19 pandemic drives up demand for medical gloves worldwide.

Its 2020 net profit is estimated at up to 3.4 billion yuan ($526.7 million), compared to 490.3 million yuan ($76.0 million) in 2019, according to the firm’s stock exchange filing on January 30.

Blue Sail’s stock has also gained approximately 72.5% over the past one year. It started listing shares on the Shenzhen Stock Exchange (SZSE) in China, after raising 700 million yuan in an initial public offering (IPO) in April 2020.

Founded in 2002, Blue Sail is involved in the manufacture of four major products, namely medical gloves, cardiovascular & cerebrovascular interventional medical equipment, minimally invasive surgical devices, and first aid supplies.

According to its website, the firm delivers products to over 110 countries and regions worldwide. It claims a 22% share in the global market of polyvinyl chloride (PVC) gloves.

Li Zhenping, founder of Blue Sail, currently holds close to 29.9% of the company’s stake.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.