Hartalega focuses on capacity expansion

HARTALEGA Holdings Bhd, Malaysia's largest synthetic glove maker, gained as much as 12 per cent before halving its gain on its trading debut yesterday.

The stock rose 22 sen to RM2.02 within few minutes of its debut before ending the day at RM1.91. A total of 22.81 million shares were traded.

Kuala Lumpur-based Hartalega sold 24.2 million shares at RM1.80 each under its initial public offering, raising RM43.2 million.

"We are happy with the opening premium, but the focus is more on our business," managing director Kuan Kam Hon told reporters after Hartalega's listing ceremony in Kuala Lumpur.

Kuan said the company is tripling production capacity to nine billion gloves a year, costing some RM230 million in investments.

Two new factories are being set up to complement Hartalega's existing three outside Kuala Lumpur, which are now capable of producing 3.2 billion gloves.

A fourth plant, costing about RM120 million, will be ready in September this year with a capacity of 2.9 billion gloves annually.

Kuan said works on the fifth factory should start in July this year and ready in 2010, giving the company an additional 3.1 billion pieces of gloves a year.

Hartalega is now the world's third largest synthetic gloves manufacturer after US' Kimberley Clark and a Chinese company, Kuan said.

"When the fifth plant is full capacity, we will be aiming for a higher spot in the global ranking," he said.

Some 75 per cent of Hartalega's output is now nitrile gloves, while the remaining 25 per cent is gloves made of natural rubber.

The company exports to 23 countries, with shipments to the US makes up more than 60 per cent.

Hartalega made a net profit of RM37.05 million on a RM240.91 million turnover in the year ended March 2007.