HARTALEGA Holdings Bhd is poised for a 40 per cent jump in rubber glove capacity growth to 17.2 billion pieces in the next financial year ending March 2016.
Group managing director Kuan Mun Leong said the first phase of the Next Generation Integrated Glove Manufacturing Complex (NGC) from now to 2017 would see the group's capacity soaring by five billion to 17.2 billion pieces a year.
“We’re expanding to reduce lead times to meet demand and capitalise on strong global demand.”
He added that the NGC production lines, in Sepang, is expected to start contributing to Hartalega’s bottom line as early as the end of this year.
Kuan was speaking to reporters after the group’s shareholders meeting,here, yesterday.
Since 2010, Hartalega — the world’s biggest synthetic-glove maker — has faced fierce rivalry from Top Glove Corp Bhd, Supermax Corp Bhd, Kossan Resources Industries Bhd and Latexx Partners Bhd as they switch more of their production lines to make nitrile gloves.
In dispelling rumours of overcapacity, Kuan said: “That’s not entirely accurate. As of now, our order book is full and we have a backlog of up to two months.”
He cited the Malaysian Rubber Gloves Manufacturers Association announcement that rubber glove exports, particularly for the healthcare, food, electric/electronics and automotive sectors will continue to rise by eight per cent to 178.6 billion pieces at the end of this year.
Safeskin Medical and Scientific, a Thailand-based unit of United States firm Kimberly-Clark Corp, is also reported to be closing its rubber glove plant in Songkhla province. This is expected to open market opportunities for other glove suppliers in the region, like Hartalega, to serve Kimberly-Clark’s clients.
While Hartalega is not the biggest in terms of capacity, it is the world’s most valuable glovemaker, worth RM5.18 billion, at yesterday’s price of RM6.83.
In the last four months, Hartalega shares have been on an uptrend. Investors like this particular glovemaker because of its upperhand know-how in staying ahead of its competitors.
Hartalega has earned its name as the world’s fastest glovemaker by investing big time in fully automating its production lines.
Kuan and his team of mechanical engineers have cranked up their new production lines to run at a breakneck speed of nearly 50,000 pieces of gloves per hour while the industry average is still lagging behind at 26,000 pieces per hour.
Hartalega’s factories are now able to churn out 12.2 billion gloves
a year and these are shipped to
more than 40 countries. This translates to Hartalega having a 16 per cent grip on the world’s demand of some 75 billion pieces of nitrile gloves a year.