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Hartalega Plant To Commence Ops In A Year
Posted Date : 28th August, 2013
"By September, 2014, we will have our first line of production and the other lines will come onstream progressively," managing director Kuan Mun Leong said.
PETALING JAYA: Glove maker Hartalega Holdings Bhd's Next Generation Integrated Glove Manufacturing Complex (NGC), to be located in Sepang, is expected to start operations in a year with construction slated to begin next month.
"By September 2014, we will have our first line of production and the other lines will come onstream progressively," managing director Kuan Mun Leong said.
It was previously reported that construction was expected to start in December last year.
Speaking to the media after a shareholders' meeting here, Mun Leong said some RM1.9bil had been budgeted for this facility.
It would be financed via a combination of internal funds, bank borrowings and the conversion of a portion of its warrants.
The entire project will take place over eight years and its production capacity is expected to grow an average of 15% every year, said Mun Leong.
This is the firm's most significant investment to-date.
Once completed, the NGC will quadruple the company's total installed capacity to more than 42 billion pieces of gloves per annum. It will have 72 production lines in total.
Meanwhile, director of corporate finance and business development Kuan Mun Keng dismissed concerns of oversupply of nitrile gloves in the market even as Hartalega's competitors are also busy ramping up production capacity.
He noted Malaysia's exports of nitrile gloves increased by 26% last year.
"We believe that this trend will continue as emerging markets have yet to adopt to the trend (of using nitrile gloves), growth will come from these markets."
China's healthcare reform as well as the growing awareness on personal hygiene in emerging markets will provide such impetus, he added. Currently, Hartalega's largest markets remain the developed nations like the United States while its exports to emerging markets such as China and India remain "very small," said Mun Keng.
Hartalega recently set up subsidiaries in China and India to capitalise on the growth potential from these two markets.
At last look, Hartalega shares closed 24 sen lower to RM6.36.
Its first-quarter net profit rose 17.8% to RM62.9mil from RM53.4mil a year earlier.
Its pre-tax profit also rose 17.2% to RM81.9mil while revenue was up 12.2% to RM278mil from RM247.6mil previously.