Hartalega expects business recovery in 2H 2024 and 2025

Hartalega Holdings Bhd chief executive officer Kuan Mun Leong

KUALA LUMPUR: Hartalega Holdings Bhd expects to see business recovery from the second half of 2024 (2H 2024) towards 2025 and does not foresee uptake this year as the global importation of gloves remains low.

Its chief executive officer, Kuan Mun Leong said the global importation of gloves reduced significantly from 300 billion pieces per month before the COVID-19 pandemic to 15 billion pieces per month currently.

"Today, the market demand is still depressed and a lot of stocks in factories are now due for expiry and that is why the stocks are being released in the market with a lower price.

"Hence, we foresee the average selling price (ASP) to remain low and no uptake in demand for this year due to the phenomenon,” he said during a post-annual general meeting press conference, here today.

Kuan also said inventories have been kept since the beginning of the pandemic which normally comes to an end of shelf life between three to five years.

Nevertheless, he expressed confidence that Hartalega would be one of the beneficiaries once the market recovers as Malaysia will continue to become the main destination for buying gloves despite the challenging global economy and geopolitical tension.

Elaborating further on the decommissioning of its Bestari Jaya facility, Kuan said the exercise would make Hartalega more competitive and enable the group to consolidate the operations at Hartalega’s Next Generation Integrated Glove Manufacturing Complex (NGC) in Sepang, Selangor.

"The Bestari Jaya facility has 40 production lines and the speed varies from 30,000 pieces per hour to as high as 45,000 pieces per hour. In comparison, all production lines in NGC are above 45,000 pieces per hour.

"So, essentially we are making ourselves more competitive with technologies that could lower cost and consolidating the production capacity into NGC,” he said, adding that the group’s fundamentals remained strong with a healthy net cash position of RM1.6 billion as at March 31, 2023.

On expanding its market presence, he said Hartalega has been actively looking into businesses that could provide value for the core business and related to the healthcare industry.

As at June 30, 2023, Hartalega’s shareholders’ fund stood at RM4.6 billion, while market capitalisation is currently in excess of RM6 billion.

Decommissioning of its Bestari Jaya facility, which comprises four production plants, some of which have been operational since 2004, is targeted to be completed by the first quarter of the calendar year 2024.

At 2.30 pm, the shares of Hartalega were unchanged at RM1.97 with 2.89 million shares transacted. - Bernama

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Hartalega , AGM , Gloves , Kuan Mun Leong


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