Health and safety products manufacturer VIP Gloves (ASX: VIP) is readying for a significant increase in their manufacturing capacity with approval now secured from European regulators for their nitrile gloves, bringing with it increased margins on products sold.

The approval is widely recognised across the European Economic Area and signifies that VIP’s nitrile gloves conform with EU health and safety standards at a time when VIP Gloves has a 12 month production backlog due to heightened demand in response to the COVID-19 pandemic.

“Obtaining the CE Mark would allow VIP’s products to command higher selling prices while enabling us to expand our product distribution network directly to the European distributors as well as selling our products to existing distributors who service the European market,” said VIP Gloves Executive Director, Wee Min Chen.

Since the onset of COVID-19, VIP Gloves has continued to receive orders for their gloves which are manufactured in Malaysia, to the point where they are set to significantly expand their production capabilities.

With this demand, VIP has reported that they have increased the selling price of their gloves by 50% for the December quarter and are expecting to bring on their 7th and 8th production lines by April 2021.

For the quarter ending 30 September 2020, VIP Gloves reported $6.6m in sales revenue for a 37% increase in net cash flow to $1.4m for the quarter. The Company is expected to report their December quarter results this week.