Hartalega sees increase in demand from US, despite ongoing trade war

The group also focuses on driving productivity and enhancing operational efficiency with the implementation of IR4.0 and IoT

by SULHI KHALID/ pic by HUSSEIN SHAHARUDDIN

HARTALEGA Holdings Bhd sees an increase in demand for its gloves from its US market and is confident it will remain the group’s biggest export market, despite the ongoing trade tension between Washington and Beijing.

MD Kuan Mun Leong (picture; right) said as of the financial year ended March 31, 2019 (FY19), the US market is accounted for 54% of the group’s total exports, followed by 25% to Europe, 18% to the Asia Pacific and 3% to South Africa.

“The US is our core market with 90% of demand is for our medical gloves. We expect it (US demand) to remain strong in the upcoming years, even though the trade spat is going on,” he said to reporters yesterday after the group’s AGM in Kuala Lumpur.

He said the company’s plant utilisation rates have risen to 95% since August from 88% despite the US-China trade tensions and point to stronger sales in the coming months.

Commenting on Hartalega’s expansion plans, Kuan said its Next Generation Integrated Glove Manufacturing Complex in Sepang will be completed and fully operational by 2021 and increase the company’s production capabilities from 34 billion pieces to 44 million pieces per annum.

“Upon completion, we will start looking for new land for our future (plant) expansion,” he said.

Kuan highlighted that the group is now focused on driving productivity and enhancing operational efficiency with the implementation of Industrial Revolution 4.0 (IR4.0) and Internet of Things (IoT) technologies.

The group is also working on securing US Food and Drug Administration’s (FDA) approval for the US market.

“With these plans underway, we are confident that Hartalega will be able to further reinforce our pole position in the sector and allow us to continue delivering sustainable growth over the long term,” he said.

Hartalega delivered a strong performance for FY19, recording improved top and bottom line growths, with a higher net profit of RM454.9 million supported by increased revenue to RM2.8 billion.

The group has declared a final interim dividend of 1.9 sen, to be paid on Oct 10, 2019.

Hartalega’s share price closed 15 sen or 2.9% higher at RM5.31, valuing the company at RM17.8 billion.

Listed on the Main Market of Bursa Malaysia in April 2008, Hartalega is the world’s largest synthetic glove manufacturer, currently exporting to over 60 countries across five continents.