Founded in the 1890s Ansell Limited (ASX: ANN) is one of Australia’s oldest (and some might say most successful) manufacturing companies. Over its journey, it has manufactured everything from car tyres, gas masks, condoms and weather balloons.
International Exposure
Ansell is a global business with sales operations in over 50 countries and end-users in many more. According to its Annual Report, Ansell estimates that over 90% of revenue is sourced offshore with developed markets generating most of the takings. Importantly, a large majority of their future sales is expected to come from emerging markets which will only grow as global socio-economic prospects improve.
Market Leader
Ansell is a market leader in the manufacturing of several safely products for the healthcare industry, some of these products include the examination and surgical gloves and heavy-duty protective gloves for chemical handling (leveraging a strong presence in the industrial sector). Their competitive position is further strengthened by the fact most of their products are patented and must comply with stringent standards.
An important flow-on effect is their ability to push any generated profits in research and development (R&D) activities. This will ensure their product line is constantly evolving and pivoting to meet consumer demands. In my opinion, this is a fundamental aspect of any manufacturing process and can further solidify their market-leading position.
Management & Shareholder Alignment
Magnus Nicolin has been with Ansell since 2010 and, I think, is one of the reasons for the company’s continued growth and international expansion. Most importantly he is aligned to shareholders with his equity and performance rights.
Bear Case
Like all manufacturers Ansell is not immune to an increase in the cost of raw materials, this is compounded by the fact they are also subject to volatile commodity prices. In addition, operating in international markets opens the company up to currency volatility.
Conclusion
Ansell is a global leader in its field and much like CSL Limited (ASX: CSL) Ansell is the envy of its global peers –- something every Australian should be proud of. With a growing market share and a long track record of success, I plan to keep holding Ansell shares for years to come.
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At the time of publishing, Anthony owns shares in all companies mentioned.
