PETALING JAYA: AT Systematization Bhd’s Line 1 glove dipping facility is 80% completed and the first batch of medical-grade nitrile gloves set to be produced in less than two months.
Its “plant within a plant” approach has accelerated the setting up process in the facility in Chemor, Perak which started five months ago in mid-July this year, compared to the usual one year taken by new entrants to glove business to complete their manufacturing facility.
The group said the facility will be made compatible with Industrial 4.0 (IR4.0) ecosystem, equipped with Manufacturing Executive System (MES) to provide real-time production monitoring and control, output control and monitoring, record retention to comply with standard regulations.
Its managing director Choong Lee Aun said it aims to have a “smart and high-tech” glove production business, to which there are plans to build an additional three-storey office building with IT room, production control room and office workplace for its team.
Production of Line 1 will commence in early December 2020, which would enable revenue contribution for the new glove business to begin in FY2021 and for every subsequent two months it will install two new glove dipping lines.
AT estimated that its glove production capacity to reach 2.6 billion glove pieces per annum by June 2021, based on round-the-clock production.
It revealed that each of its single former production line can run at a speed of 15,000 pieces of gloves per hour whereas each double former production line can run at a speed of 24,000 pieces of gloves per hour, effectively making it a strong proxy to the robust global glove demand.
The group estimated an annual turnover of RM860 million for the venture based on its maximum capacity and an average selling price assumption of US$80 (RM333) per 1,000 nitrile gloves.
This represents more than 40 fold increase over its annual turnover of roughly RM20 million for the financial year ended March 31, 2020.
By mid 2021, AT is expected to have one single former and 12 double former glove dipping line, and it is currently working on the 13th line due to a stronger-than-expected demand ahead of production.
It will invest a total RM120 million for the 13 dipping lines, along with the related facilities and new building.
Ultimately, the group aims to have a total of 20 lines, which will be installed in a new line in a new plant.
Choong stated that it is confident that the new glove manufacturing business will break even in less than a year.
“We have already received overwhelming response and queries on orders from foreign and local buyers, even before we start production. The tremendous demand is well beyond our expectations, and we are working fast to meet this huge demand.”
The managing director acknowledged that the rising glove price momentum might not be sustainable once a Covid-19 vaccine is developed, he believes that the long-term growth prospects remain intact, given the increased awareness of the importance of gloves following the pandemic.
Nevertheless, AT’s strategy following the pandemic is to implement digital manufacturing technologies such as plant equipment automation, advanced robotics and additive manufacturing.
“This initiative is in line with our core business of designing and manufacturing industrial automation systems and precision engineering solutions.”
Choong stated that the group aims to venture into the provision of design, engineering and technology works, fabrication as well as installation of machines for the manufacturing of gloves and other rubber related products in two to three years.