Hartalega aims high as new plant gears into production

KUCHING: Hartalega Holdings Bhd (Hartalega), the country’s current largest nitrile gloves producer with a total capacity of approximately seven billion pieces of gloves is expected to see a better future in line with the start of production in its new plant.

In its latest research report, RHB Research Institute Sdn Bhd (RHB Research) highlighted that commercial production in its new Plant Five began with two new lines coming on stream in March. The company expected the remaining eight lines to be completed by November.

It underlined that the group predominantly manufactures nitrile gloves which constituted almost 80 per cent of its product mix. Apart from that, the group also had plans to decommission all ten of its lines in Plant One and replace them with six new high capacity lines.

This upgrade, added the research firm, would effectively append another one billion pieces to its annual capacity, in line with its focus on producing more powdered gloves to take advantage of the potential surge in demand from emerging markets such as China and India.

In total, both Plant Five and the upgrade works would raise Hartalega’s annual capacity from a current seven billion pieces to 10 billion after its completion.

The research firm noted that the group’s capital expenditure would amount to approximately RM120 million over the next two years to be funded internally and via borrowings.

Moving forward, Hartalega’s growth strategy would include growing organically by building new production capacity apart from leveraging on its technical know-how and expanding its nitrile glove exports to more developed nations.

This was on the back of developing human capital as well as improving its processes to enhance its competitiveness against peers.

RHB Research preferred Hartalega for its niche position as the largest nitrile glove producer in Malaysia and its technological capabilities that were well ahead of its competitors.