PUTRAJAYA – 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) in 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.
Signing on behalf of Northern Gateway was its director Syaiful Hafiz Moamat Mastam. The ceremony was witnessed by Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz and Kedah Menteri 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 3% to 5%.
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.
During the event, Tengku Zafrul said that the potential of the SBEZ to attract new investments will accelerate the government’s efforts to revive the economy post-Covid-19.
He noted that the border town of Bukit Kayu Hitam has the advantage of being the main gateway for cross-border trade in the northern region.
“The main gateway in the north for cross-border trade with an estimated value of RM40 billion yearly should be capitalised on, to the maximum,” the minister said.
Tengku Zafrul said the development of property components in Kota Perdana SBEZ was part of the Finance Ministry’s efforts to rebrand the development concept at the border town.
“Major infrastructure development and construction of truck depots and internal clearance at the Kota Perdana SBEZ ground logistics hub will commence soon and scheduled to be completed by mid-2022,” he said.
Tengku Zafrul said Northern Gateway, with the cooperation of the Kedah state government, needs to focus specifically on exploring new investment opportunities especially in the high-impact secondary economic sector developed at Kota Perdana SBEZ to boost the country’s economic growth.
“In this context, raw materials and commodities from neighbouring countries that are being exported directly to major importing countries such as China, South Korea and Japan through Penang Port can be processed and turned into high value-added products using viable technologies, for our export market,” he said.
The minister sees Kota Perdana SBEZ as being on track to exploit the existing advantages that Malaysia and Thailand have, such as raw materials and infrastructure.
Another advantage, Tengku Zafrul noted, is Kota Perdana SBEZ’s geo-strategic location on the Asian Highway Network 2 connecting Singapore and Thailand as well as the Trans Thai-Malaysia gas pipeline route.
“These factors give it an edge to be potentially developed as an important hub in the global supply chain for the manufacturing industry, particularly medical devices and healthcare equipment, food products as well as automotive, electronics and electrical components,” he said.
Meanwhile, Sanusi opined that several sectors including e-commerce, food production and medical-based research and manufacturing industries could overcome the economic impact of the Covid-19 pandemic.
To this end, he said the Kedah state government would build a water treatment plant in Kodiang to ensure adequate water supply at SBEZ to attract investments to the area. – Bernama, March 10, 2021
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