Mr Nicolin said Ansell had been working to increase its internal manufacturing capacity to protect against external factors, “so that we can control our own destiny better”.
He said Ansell had not taken “untoward risk” but had secured long-term deals with suppliers to ensure it was not caught out by materials shortages.
“We have been thinking ahead and we think we are well covered,” he said.
In its presentation to investors, the company also warned that supply chain challenges may extend to shipping product, depending on COVID-19 case surges.
“There is a high likelihood that supply may be temporarily disrupted due to COVID-19 spikes at factories (our own and outsourced suppliers) and worsening shipping conditions and container availability.”
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The company is not anticipating any quick resolution of pandemic conditions. Mr Nicolin said there will probably be a need for annual COVID injections to cope with the variants of the SARS-Cov-2 virus.
“The vaccine is only expected to protect for 12 months … the question is what the new variants will do.”
Mr Nicolin said while the US and European vaccine rollouts look set to complete in the coming months, there is a strong chance that vaccinations in Asia, Africa and Latin America will continue well into 2022.
“It’s going to be spotty in a couple of areas. There are a lot of challenges left,” he said.
In a call with analysts on Tuesday morning, Mr Nicolin said the company expects heightened demand for protective equipment against this backdrop. “Everyone has got used to using PPE in a different way. You want to feel safe, especially if you have further mutations of the virus,” he said.
Shares opened 4.3 per cent higher to $40.25 before settling at $39.09, or 1.4 per cent higher, just after 1:00pm.
Analysts view longer-term opportunities for the company even after the pandemic, with JP Morgan’s David Low predicting in a note to clients that some key Ansell categories should boom further when “surgery volumes lift for an extended period as bulging [treatments] wait lists are addressed.
Ansell’s mechanical products unit was the only segment to see a decline in organic growth, down 1 per cent for the half due to lower activity in oil and gas sectors.
Ansell declared a US33.2¢ dividend, an increase of more than 52 per cent on the same time last year.
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Emma reports on healthcare companies for The Age and Sydney Morning Herald. She is based in Melbourne.
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