Initially, it aims to set up five production lines with a total capacity of 1.5 billion pieces a year.
Towards that end, the group has entered into a lease agreement with GPA Holdings Bhd’s wholly owned subsidiary, GP Autobat Sdn Bhd, for the lease of certain industrial buildings in Klang, Selangor, for its glove production operations.
It highlighted that the decision to venture into the sector is due to the “swell in demand” as a consequence of the Covid-19 pandemic.
The Malaysian Rubber Glove Manufacturers Association has projected an annual demand growth rate of 15-20%, with global demand set to hit 420 billion pieces of glove and Malaysia’s projected export revenue of RM34 billion.
The current global shortage of rubber gloves is anticipated to last beyond the first quarter of next year.
PNE PCB revealed the total capex for the commission and installation of the production lines and related facilities is estimated to be at RM60 million, which covers automated dipping lines, purchase of equipment and components such as formers and moulds, and other necessary systems and certifications.
The capex and any additional funding requirement for the group’s venture will be satisfied with a combination of fundraising exercises, bank borrowings and/or internally generated funds.
Currently, PNE PCB is identifying suppliers or distributors for the supply of raw materials required for the production of rubber gloves. It expects the production of rubber gloves to begin in stages by the fourth quarter of 2021.