‘DEMAND WILL PERSIST FOR NEXT 3 YEARS’
Consumption will not decline even if vaccine is found, says Hartalega chairman
HARTALEGA Holdings Bhd does not foresee an oversupply scenario for medical gloves in the next three years, despite the development of vaccines to combat the Covid-19 pandemic.
Its executive chairman Kuan Kam Hon said although the coronavirus infected only three per cent of the world population, the consumption of medical gloves had grown tremendously in the past few months, which it estimated to be around 130 billion pieces to date.
“The demand will remain as the standard operating procedure (SOP) for treating patients has changed.
“Even after a Covid-19 vaccine is found, it will only mean a three per cent drop in demand for gloves,” he said after Hartalega’s annual general meeting yesterday.
Hartalega’s net profit surged 133.6 per cent in the second quarter to RM219.72 million from RM94.06 million a year ago, driven by a 38.5 per cent jump in sales volume and the higher average selling price (ASP).
Its revenue grew 43.7 per cent to RM920.09 million in the same period from RM640.1 million previously.
Reuters previously quoted an official with the Chinese Centre for Disease Control and Prevention (CDC) as saying Covid-19 vaccines being developed in the country might be ready for use by the public as early as in November.
It added that China had four Covid-19 vaccines in the final stage of clinical trials, of which three had been offered to essential workers under an emergency use programme in July.
Meanwhile, managing director Kuan Mun Leong said the group remained committed to ramping up production to meet global demand for nitrile gloves.
“In order to cater to this demand growth, as well as taking a longer-term perspective towards the structural step-up in demand, Hartalega is accelerating capacity expansion via our Next Generation Integrated Glove Manufacturing Complex (NGC).”
Mun Leong said to date, the group has commissioned 10 out of 12 production lines at Plant 6, while for Plant 7, the first production line was on track for completion next month.
He said Hartalega was further scaling up its expansion plans with the acquisition of a new plot of land adjacent to Plant 7.
“Going beyond this, our longterm capacity growth will be propelled by our next expansion phase, the NGC2.0, which will in
volve a capital expenditure of RM1.5 billion.
“We aim to commission the first production line of NGC 2.0 in the first half of 2022. Once fully completed by 2027, the group’s total annual installed capacity will rise to 95 billion pieces per
annum,” he added.
The group has recommended a final single tier dividend of 2.1 sen per share in respect of its financial year ended March 31 this year. This brings its total dividend paid out to 7.75 sen per share.