Handing an edge to Malaysia

Kuan Mun Leong.

Hartalega Holdings Bhd had to overcome all odds to become the world’s largest nitrile glove producer. Coming from humble beginnings, the business run by the Kuan family is constantly exploring new technology and innovation to put Malaysia’s name on the world map.

Despite the company’s success in stamping its name in the global market, the Kuans have never compromised their spirit of patriotism and love for their country.

Managing director Kuan Mun Leong, who is the youngest among the second Kuan generation, says: “Malaysia is our home. We want to continue our growth in the country and hope to see more forthcoming business-­friendly policies with the emergence of the ‘new Malaysia’.

“Malaysia is leading the world in gloves and we have a complete “glove ecosystem” that is unique. This is our edge over other glove-producing countries.

“The prospects for the glove industry in the country are bright. Over the years, Hartalega has invested well over RM2bil in Malaysia.”

Kuan, who learned the trade from his father Kuan Kam Hon, the founder of the company, adds that the invention of the lightweight nitrile glove has helped to strengthen Malaysia’s leadership position in the glove industry.

Today, nitrile gloves comprise about 60% of the world’s consumption of gloves and the majority of nitrile gloves are produced in Malaysia.

Global excellence

“Our nation’s dominance in nitrile glove production has attracted many related foreign direct investments into Malaysia such as nitrile material and hand mould manufacturers.

“Our nation’s dominance in the glove industry as a whole has also created many opportunities for businesses such as chemical suppliers, engineering companies, machine fabricators and producers of packaging materials, among others, to thrive in Malaysia.

“Moving forward, we want to propel Hartalega towards global excellence in everything that we do and benchmark against the most admired companies in the world,” he says in an interview with The Star.

Kuan notes that the company will continue to climb the technology ladder and seek new advanced technologies.

As far as manufacturing is concerned, Hartalega’s desire is to have a completely connected smart factory or Industry 4.0, he says, adding that to date, it already has a few Internet of Things technologies operating at its facilities.

The launch of the world’s first non-leaching antimicrobial gloves will support the company’s growth and the goal is to get them to be adopted globally as the new standard of gloves, he stresses.

Sharing some of the proud moments from the company’s journey, Kuan says Hartalega is proud of cultivating a culture of innovation and productivity.

Kuan says: “Our passion for innovation has always been the driving force behind our growth and success. We constantly seek to differentiate ourselves from our competitors by focusing on technological advancements and new products to cater to the evolving needs of the market.

“Our latest milestone is the world’s first non-leaching antimicrobial glove, which we launched in Europe in May.”

Providing active protection against healthcare-associated infections, this technological breakthrough is the first ever to contain a new active microorganism-killing molecule, designed to prevent the spread of bacteria to and from surfaces and people.

Kuan notes that this product is truly a game-changer for the industry as it is the first in the world to have this kind of efficacy and performance. The antimicrobial glove is set to be available in hospitals around the world and is being produced at a low cost in order to reduce barriers to access.

On its expansion, he says Hartalega is progressing well with its expansion plans via the state-of-the-art Next Generation Glove Manufacturing Complex (NGC).

A RM2.2bil investment, the NGC will comprise seven state-of-the-art manufacturing plants housing the most technologically advanced production lines in the industry.

Once it is completed, the NGC will see Hartalega’s total installed capacity increase substantially to 44 billion pieces per annum.Not only that, the NGC will also incorporate the most advanced production technologies, attractive workplace design and a dedicated Learning Centre to inspire more innovation.

Business journey and hurdles

Reminiscing on Hartalega’s business journey and the hurdles it had to overcome, Kuan says the company had to endure challenges in the production of the lightweight nitrile gloves, as the majority of glove makers in the market believed that such a feat was impossible.

At the time, the industry was impacted by a combination of factors such as adverse exchange rate fluctuations and protein allergy issues in natural latex gloves.

Sensing with acute foresight that disruptive research and development was crucial to overcome this issue, Hartalega took the bold move to invent the world’s first lightweight nitrile glove.

At a time when the glove manufacturing industry was producing nearly 100% natural latex gloves, Kuan says, the thought of shifting to nitrile was untenable, given that the entire manufacturing process would need to be re-engineered to accommodate the production of nitrile gloves.

Nevertheless, Hartalega knew that however insurmountable the task seemed, a revolutionary disruption to products, technology and processes was what the market needed, Kuan explains.

Focusing its research and development efforts on elastic thin nitrile gloves, in 2005 Hartalega introduced the world’s first lightweight thin gauge nitrile gloves weighing 4.7g, when the industry average was at least 6g, mimicking the stretchiness and softness of natural rubber gloves without protein allergy risks.

A year later, Hartalega took it a step further and launched a 3.7g lightweight nitrile glove. The market, he says, was not ready for this kind of innovation, with many not recognising the product’s benefits or believing that it could be replicated on a large-scale.

However, he says, Hartalega’s lightweight nitrile glove soon proved to be a game-changer and disruptive innovation which ultimately transformed the landscape of the industry.

Kuan adds: “From a market that was once traditionally dominated by natural latex, nitrile gloves have now taken the lead. In 2005, natural latex had a 95% share of the global glove market. Today, it has shrunk to below 50%, overtaken by nitrile gloves due to the switching momentum that Hartalega created.

“Since then we have certainly cemented our niche in the market, maintaining our pole position as the world’s leading manufacturer of quality nitrile gloves to this day.”

Some of the notable achievements include being part of the leadership team that brought Hartalega to where it is today – the most valuable glove company on Bursa Malaysia and the only glove company on the top-30 FBM KLCI list.

Kuan says the company has also doubled its size from a revenue of RM1.1bil in the financial year (FY) 2015 to RM2.4bil in FY2018. The company has also added RM1.3bil in revenue in three years, which he feels is an amazing achievement.

Future of the glove industry

What are some of the important things one should consider when building up a business, especially in the glove industry? Kuan says that since the glove industry is a home-grown and relatively young industry in Malaysia, there are no prescribed best practices.

“We have to find our own way to deliver the best results and continuously reinvent ourselves in many aspects. At the same time, we need to continue to develop new products and manufacturing technologies.

“There is no readily available technology for the glove industry, so we have to develop new technologies to make ourselves more efficient.

“There is a lot of trial and error when it comes to running a glove business. There were many failures behind the successes of Hartalega that you see today. One must have grit to succeed.

“In running a business, there are many variables. Targets are always moving, so we need to make quick and accurate decisions. This is why those who pay more attention to details will hit the target first and win,’’ he says.

As for the future of the glove industry, Kuan says that in order to remain in Malaysia and retain its No.1 position, there is an urgent need for glove manufacturers to step up in many aspects, especially in areas such as product innovation, manufacturing technologies and people practices.

This is premised on the need to sustain Malaysia’s glove manufacturing competitiveness, he says, adding that the industry not only needs to grow its manufacturing capacities, but its capabilities as well.

The group consistently takes a longer view of the business and derives its strategies to capitalise on opportunities and deal with challenges to achieve its long-term vision, Kuan says.

“To this end, Hartalega will need to be prepared to create global mobility for our manufacturing operations. In order to achieve global mobility, we are working around the clock to develop the Group’s capabilities in a holistic manner.

“This includes building our people’s capabilities, embracing Industry 4.0 technology and improving our business systems and manufacturing processes.

“Ultimately, we need to establish a blueprint of best practices which we can emulate at manufacturing plants locally and abroad,” he says.

 

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