KUALA LUMPUR: Hartalega Holdings Bhd is on track to commence construction of its RM1.5bil next-generation integrated glove manufacturing complex by December.
Deputy managing director Kuan Mun Leong said the company had identified a piece of land in Sepang and was currently in the process of getting the necessary approvals.
“We need to ensure the relevant approvals are given before we enter into the sales and purchase agreement (to acquire the land).
“Construction is expected to start end-2012. We’re on track to get it done before the close of this calendar year,” he said after the company’s AGM.
Executive chairman and managing director Kuan Kam Hon said Hartalega always had the interest of shareholders in its mind before embarking on any project.
He said the land could set the company back by RM100mil if it did not get the regulatory approval. “It’s an ambitious target to start construction by December. The worst-case scenario will be March 2013.”
Mun Leong said the complex would have 72 production lines and would be built in two phases.
“The capital expenditure will be front loaded. For the first three years, we plan to invest between RM300mil and RM400mil annually.”
He said the complex would be equipped with the latest technology to help the company increase its glove production to 42,000 pieces per hour from 40,000 pieces now.
“When the complex is completed, it will produce some 24.5 billion pieces per annum, bringing our total capacity to 38 billion pieces a year,” he said.
Executive director Kuan Mun Keng said Hartalega had not lost any market share and that all its productions lines were now running at full capacity.
“We recognised that our margin has dropped slightly due to competition. We need the capacity to come in. Going forward, margin expansion is not the objective of the company.
“The earnings per share (EPS) growth will be our objective. Our margin can be 17% or 18% but our EPS will continue to grow.”
Source: The Star Dated: 15/08/2012
