KUALA LUMPUR: The world’s largest synthetic glove manufacturer, Hartalega Holdings Bhd, is optimistic that the US will remain its biggest export market despite ongoing trade tensions.
Hartalega managing director Kuan Mun Leong said that currently the US contributes 54 per cent of its total sales as of end of financial year 2019 ended March 31. "The US is our core market with 90 per cent of it coming from medical gloves.
"We expect it to remain strong in the coming years, even though the trade spat is going on," he said at the company's annual general meeting here today.
Besides the US, Hartalega also exports to Europe (25 per cent), Asia Pacific (18 per cent) and South America (three per cent). "We are also looking into other new markets to strengthen our businesses," he said.
Kuan also added that the company is cautiously optimistic on its forecast, as right now the Chinese manufacturers are diverting their businesses to other parts of the world to avoid the additional tariffs imposed by the US government.
"The US market had shifted to Malaysia even before the trade spat started. The Chinese, on the other hand, are now moving to Europe, for example. On this matter, we can only analyse the full impact of the trade war in the next six months," he said.
On Sept 1, both China and the US began imposing additional tariffs on each other’s goods in the latest escalation of their bruising trade war, with China hitting a levy on US crude oil while the US began implementing 15 per cent tariffs on more than US$125 billion in Chinese imports, including smart speakers, Bluetooth headphones and many types of footwear.
On its expansion plans, Kuan said its next-generation integrated glove manufacturing complex would be completed and fully operational by 2021, which would increase the company's production capabilities from 34 billion pieces to 44 billion pieces per annum.
"As of now, our plant utilisation rates are 95 per cent, an increase from 88 per cent previously. We expect it to be fully operational by the end of this year backed by higher demand. "Following the completion, we will start looking for new land for our future expansion," he said. - Bernama