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MSCM Holdings invests RM59 mln for new venture in glove business

MSCM Holdings invests RM59 mln for new venture in glove business

25 Aug 2020

MSCM Holdings Bhd has allocated RM59 million in capital expenditure to kickstart its new business venture in glove making and appointed Howellcare Industries Sdn Bhd as its turnkey project partner.

The company is currently involved in investment holdings, search and advertising, information technology, supply chain management, and money lending businesses.

Executive chairman Datuk Teoh Hai Hin said the company aims to transform MSCM into a formidable listed company by expanding into various new pillars of business, namely hire purchase and leasing of trucks and machinery, manufacturing of gloves, and healthcare.

“We have identified that this new venture will not only contribute positively to our earnings, but also complement our existing core segments extremely well,” he said in his speech before witnessing the signing ceremony between its wholly-owned subsidiary, Hong Seng Glove Sdn Bhd and Howellcare here today.

Meanwhile, executive director Jeff Chong Koon Meng Seng said the group eyes to return to the black in the next financial year ending March 31, 2022 with glove business expected to contribute 70 to 80 per cent of its revenue.

He said the glove plant, which will be built on 2.02-hectare land in Sungai Petani, Kedah, will have six production lines with a capacity 1.5 billion pieces per annum.

“We are targeting for two lines to start production in the second quarter of 2021, and will add one new line every month to bring the total to six lines.

“Based on the assumption of the expected output of each double former glove production dipping line is 240 million pieces per annum and with assumptions of latex price of around US$1,500 a tonne, we believe the return on investment (ROI) will be in the fourth quarter of 2021,” he said.

Chong said with the demand for gloves showing no signs of peaking, he believed it would pick up and grow even higher post COVID-19 pandemic.

He said the target market would be the US and European countries but all depend on demand and the price.

Even though large glove-makers are currently increasing production to meet growing global demand, Chong said it will not hinder the entry of several new players into the industry, as the demand for gloves will remain firm for the foreseeable future.

“Malaysia, currently produces 65 per cent of the world supply and the government expects the export will climb 45 per cent this year.

“Global demand is also expected to grow 30 to 50 per cent in the next two years, as countries around the world are experiencing a resurgence of the COVID-19 pandemic,” he said.

The group’s semi-automated plant will create about 800 jobs, with priority given to locals.

Source: Bernama Posted on : 25 August 2020