AT expands to build second factory, acquires 7.2 ha site
16 Jan 2021
AT Glove Engineering Sdn Bhd, a wholly owned subsidiary of AT Systematization Berhad (“AT”) has entered into a Sale and Purchase Agreement (SPA) with Seacera Porcelain Sdn Bhd, for the purchase of a 72,770 square meter plot of industrial land located in the District of Larut & Matang, for a consideration of RM 10.5m.
The deal, which is to be completed within 60 days, will be funded fully by cash and it reinforces AT to be an up and coming entrant into the glove making business, which has seen and continues to see unprecedented demand.
AT, last year embarked on a diversification exercise to take
advantage of a paradigm shift in global consumption of nitrile disposable
gloves. The Covid-19 pandemic, spreading across the globe, drove demand for
disposable medical grade gloves soaring, reaching up to 15x its historical
Malaysia, accounting for close to 70% of the world’s supply of gloves, has seen the industry flooded in the last 9 months of new players, none of which have had the speed, alacrity and determination of AT.
From its initial investment into its maiden glove factory in Chemor, building the entire operation from scratch, to its production of the first batch of gloves on Christmas Eve 2020, the company has been focused on breaking the barriers of what is traditionally a high level for entry.
Within 5 months of initial planning, AT is now in full expansionary production with an estimated 63000 pieces per hour capacity by month end.
Not resting on its laurels, AT Managing Director Choong Lee Aun has sanctioned the purchase of this new plot with the vision of establishing a new factory with the same zest and efficiency as its maiden Chemor plant.
“We have the desire, motivation and resources to be a
serious proposition in what is evidently a supply choke point in terms of
global accessibility of quality Malaysian made gloves, and to that extent our
plans for this new factory will reflect our seriousness and ambitions to
penetrate the global market
and be part of the whole ecosystem contributing to the strength and quality of Malaysian led exports,” Mr Choong said.
The new factory location, spanning almost 800 thousand square feet, will house up to 60 double former lines, churning out 35000 pieces per hour each line. The production capacity, once fully mobilised and operating at peak efficiency will be able to provide an output of 18 billion pieces per annum, making AT 1/5 of Malaysia’s top glove company TopGlove, who clocked 85.5 billion pieces in 2020.
“We see the demand for gloves to last longer and stronger, as the world struggles with coping with the pandemic. With new strains and mutations affecting the global economy, and a general increase in awareness for hygiene and protection, the global demand will likely find a plateau and last for a while to come,” Mr Choong added.
AT, having received CE certification recently, has been inundated with enquiries on contract orders which far outstrip its current demand. With the current third wave hitting Malaysian shores, production of gloves across the industry are being hampered by stop/start orders of key production lines, causing disruption in supply.
With further supply disruptions on the horizon, AT will look to take advantage of spot prices in the short term while it builds production capacity to handle the enquiries.