KUALA LUMPUR: Hartalega Holdings Bhd's subsidiary Hartalega NGC Sdn Bhd is buying 60.57 acres in Sepang, Selangor from Kumpulan Tanjung Balai Sdn Bhd for RM158.31 million.
In an exchange filing today, the glove manufacturer said the acquisition came in line with the upsurge in demand of medical glove across the globe due to the unprecedented global pandemic event.
Covid-19 has created higher safety and hygiene awareness across all industries.
As a result, the medical glove industry was expected to undergo a structural step-up in demand with rising awareness on the importance of hand protection, Hartalega said.
Hartalega said the acquisition would enable the company to create greater value and earning potentials for its stakeholders.
The plot is located strategically adjacent to Hartalega's existing Glove Manufacturing Complex (NGC) Sepang with infrastructures were readily available.
"The existing expansion in NGC Sepang is scheduled to be completed by 2021. Upon completion, the annual installed capacity will increase to 44 billion pieces," it added.
Hartalega said the land would be used to build additional glove manufacturing facilities (NGC 1.5) to increase their installed capacity of 19 billion pieces annually.
Coupled with the previous acquisition of 95 acres of land in Banting to build NGC 2.0, the total annual installed capacity would increase to 95 billion pieces upon completion by 2027, said Hartalega.
In a related news, Hartalega said it was reimbursing RM40 million in recruitment fees previously paid by migrant workers to employment agents collected during recruitment process.
Chief executive officer Kuan Mun Leong said the group was strongly committed to continuously enhancing its social compliance policies in line with international benchmarks.
He said Hartalega had targeted to begin remediation by the fourth quarter of 2020, to be completed over 24 months.
"This is an ongoing process that we always strive to improve on and we are pleased to mark our progress to date with the reimbursement of recruitment fees.
"This follows our previous Zero Recruitment Cost Policy instituted in April 2019, to protect the welfare of migrant workers and ensure that they are free from any recruitment costs," he said in a statement today.
Kuan said over the past year, the group had been engaging with multiple stakeholders to find a solution to this issue.
"The issue of recruitment fees paid to third parties by migrant workers is a complex global issue, requiring multi-stakeholder involvement to reach a solution as it is a shared responsibility.
"Towards the later part of 2019, we made the decision to remediate migrant workers who joined us prior to our Zero Recruitment Cost policy.
"Earlier this year, we appointed a third-party non-profit organisation with a proven track record in social compliance and recruitment fee remediation to conduct interviews with affected workers," he said.
Kuan said despite a delay caused by the Movement Control Order (MCO), these interviews were concluded in June this year.
"Meanwhile, we are also working with another external independent party to review our remediation plan.
"The wellbeing of all our people has always been of utmost priority to Hartalega, regardless of nationality or background.
"We are dedicated to ensuring that we continue to progress in our social compliance journey, to safeguard the welfare of our employees," he added.