Kuala Lumpur – The list of groups diversifying into the manufacture of rubber gloves in Malaysia has being joined by PNE PCB Berhad, a manufacturer of printed circuit boards.
Group subsidiary PNE Glove Sdn Bhd is to set up five gloves production lines with each yielding approximately 300 million pieces per year, PNE announced 7 Jan.
On an annual basis, PNE said it expects to produce around 1.5 billion pieces of gloves to narrow the global gloves demand-supply gap.
To that end, PNE Glove has signed an agreement to lease industrial buildings in Klang, Selangor, to serve as a base for its production operations.
PNE’s decision to move into the production of gloves is in response to the surge in demand for these products due to Covid-19 – and the impact of the pandemic on its existing business.
PNE pegged the capital expenditure to commission and install all five glove-dipping lines and related facilities at around RM60.0 million.
This, it said, would include the set-up of the automated glove-dipping lines, purchase of equipment and components such as formers and moulds, and other necessary systems and certifications.
PNE expects to fund the above capital expenditure as well as any additional funding requirements for the operations of this new venture via a combination of a fund-raising exercise, bank borrowings and/or own-generated funds.
The group is currently identifying suppliers/distributors for the supply of raw materials required for the production of rubber gloves.
“Subject to the lead time for site preparation, installation of the new glove-dipping lines and availability of raw materials, the production of the rubber gloves is expected to commence in stages by the fourth quarter of 2021,” it stated.
As the gloves business could result in a diversion of 25% or more of the group’s net assets and contribute over 25% to net profits, the company will seek the approval of its shareholders for the project.
Further information on this project and the Malaysian rubber gloves market in the Jan/Feb issue of ERJ magazine.