08/31/2014

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MALAYSIA: Hartalega to expand glove output

Its executive chairman Kuan Kam Hon said however that production was expected to go up by another 5 billion pieces in the financial year 2016, bringing the total capacity projection to around 18 billion pieces.

"The 5 billion pieces represent about 40 % of our existing production capacity of around 12 billion pieces. So, obviously, our bottom line will grow in absolute terms,” he said.

Hartalega, the world's largest synthetic glove manufacturer, registered its highest turnover to date of RM1.1 billion for its financial year ended 31 March.

For its first quarter ended 30 June, it registered a lower net profit of RM57.1 million compared with RM62.9 million a year earlier and increased revenue of RM279.2 million from 278 million.

This increase in production capacity will begin from November, when the first two production lines at its new next generation integrated glove manufacturing complex (NGC) begin operations.

The NGC is expected to provide average year-on-year capacity growth of 15 % per annum over the next eight years, with total production capacity increasing to 42 billion pieces per annum once fully completed.

For the financial year 2015, Kuan said Hartalega was expected to take a 2 % to 3 % hit to its profit margin due mainly to internal costs spent on NGC, including on staff training for the managers and engineers who would be based there.

Hartalega managing director Kuan Mun Leong said that despite the challenging economic climate and impact of lower average selling prices, the group's results were buoyed by the robust demand for nitrile gloves.

He said this demand had outpaced the demand for natural rubber gloves for the first time last year and was expected to continue growing at around 15 % over the next two years.

Source: Daily "The Star", Kuala Lumpur; 27 Aug 2014
(Syed Rashid Ali, Karachi, Pakistan)

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