PUTRAJAYA, March 10 ― Nitrile glove manufacturer Hartalega Holdings Bhd will invest RM7 billion over a period of 20 years to build a Next Generation Integrated Glove Manufacturing Complex in the Kota Perdana Special Border Economic Zone (SBEZ), Bukit Kayu Hitam, Kedah.
Hartalega chief executive officer Kuan Mun Leong said the investment included the construction of 16 manufacturing facilities in two phases on 101.17 hectares of land in the SBEZ, which is expected to create 12,000 jobs.
“Each phase will see eight manufacturing facilities and Hartalega's target is for the first phase to be completed in 2024,” he said after the signing of a sale and purchase agreement between Hartalega NSM Sdn Bhd and Northern Gateway Free Zone Sdn Bhd here, today.
The agreement is for the acquisition of land in the SBEZ for RM228.69 million.
Hartalega NSM is a subsidiary of Hartalega Holdings, while Northern Gateway is a wholly-owned entity of the Minister of Finance Incorporated.
The ceremony was witnessed by Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz and Kedah Mentri Besar Muhammad Sanusi Md Nor.
Kuan said the operational expansion was important for Hartalega to accelerate production capacity while taking into account the long-term perspective towards structural increase in global demand.
“Our growth strategy remains focused on Malaysia given its comprehensive ecosystem and supply chain for the glove sector.
“This domestic direct investment will also contribute to the country's economic development, as well as drive economic development in the northern region,” he said.
Kuan added that upon completion, the facility in Kedah was expected to contribute almost five per cent to Kedah's total gross domestic product.
“The long-term expansion plan in Kedah will add 80 billion pieces of gloves per year, bringing Hartalega's total capacity to 143 billion pieces annually,” he said.
Asked about the average selling price (ASP) of rubber gloves as demand for the product surges, he said it would still be guided by market dynamics.
“Prices will remain high as the demand is still strong. It is positive for the industry,” he said in response to Top Glove Corp Bhd's move in raising the ASP by three to five per cent.
Kuan also said the company did not see any concern about oversupply this year as increasing glove consumption was due to the Covid-19 pandemic.
He said despite a reduction in new Covid-19 cases in Malaysia, the majority of countries are still fighting against the pandemic. ― Bernama
