Demand for gloves to outstrip production capacity over next 3 years - Hartalega

15 Sep 2020 / 18:47 H.

KUALA LUMPUR: The rubber glove industry will not be able to meet market demand in the next three years, said Hartalega Holdings Bhd executive chairman Kuan Kam Hon.

“Glove dipping is a long process. The expansion or transition period (to meet the demand) is at least three years.

“Even in the fourth year, if you have extra (rubber gloves), they’d go into inventory building. When you have a supply shortage, you are not able to build up inventory,” he told reporters after the company’s annual general meeting here today.

Kam Hon said Hartalega, the world’s largest producer of synthetic rubber gloves, was expanding its capacity by about 20 per cent per annum, which is slightly more than the organic growth in the industry.

Meanwhile, Hartalega chief executive officer Kuan Mun Leong said the COVID-19 pandemic had changed users’ behaviour, driving up the demand for rubber gloves.

“Demand for rubber gloves in developed countries has increased by 30 per cent. While the per capita consumption used to be low, now the usage has more than doubled in developing countries,” he said.

Mun Leong said as the company continued to ramp up capacity, it was aware that the baseline for global demand had shifted.

“The COVID-19 pandemic is expected to drive market demand and we are focused on playing our role in protecting frontliners in the ongoing fight against this global crisis,” he said.

He said in order to cater to this demand growth, as well as taking a long-term perspective towards the structural step-up in demand, Hartalega was accelerating capacity expansion via its Next Generation Integrated Glove Manufacturing Complex (NGC) in Sepang, Selangor.

“To date, we have commissioned 10 out of 12 production lines for Plant 6, while for Plant 7, the first production line is on track for completion next month,” said Mun Leong.

Hartalega is also scaling up expansion plans with the acquisition of 24.23 hectares of land adjacent to Plant 7.

This would see the construction of four additional plants, namely Plants 8 to 11, adding an installed capacity of another 19 billion pieces of gloves per annum once completed, he said.

“Our long-term capacity growth will be propelled by our next expansion phase, the NGC 2.0. We aim to commission the first production in the first half of 2022.

“Once fully completed by 2027, it will see the group’s total annual installed capacity increase to 95 billion pieces per annum,” added Mun Leong.

He said this would enable Hartalega to not only maintain its position as a frontrunner in the industry but also continue contributing to safeguarding lives around the world.

Meanwhile, the company has approved a final dividend payout of 2.1 sen per share for the financial year ended March 31, 2020. - Bernama

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