KUALA LUMPUR, Malaysia—Malaysia's rubber glove industry is about to get another competitor.
PNE PCB Berhad, a manufacturer of printed circuit boards, said it would join the list of groups diversifying business and entering the rubber gloves manufacturing industry.
Group subsidiary PNE Glove Sdn Bhd plans to set up five production lines, each making about 300 million pieces per year, PNE said Jan. 7. The decision comes in response to a surge in demand for medical gloves, a direct result of the COVID-19 pandemic.
PNE expects to produce around 1.5 billion gloves annually, once its manufacturing lines are fully operational.
"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 said.
The group is identifying suppliers/distributors for the supply of raw materials required for the production of rubber gloves.
PNE Glove signed an agreement to lease industrial buildings in Klang, Malaysia, where it will establish a base for its production operations.
An initial $15 million investment is expected to cover the cost of installing and commissioning all five the glove dipping lines at the related facilities. That includes the setup of the automated glove-dipping lines, purchase of equipment and components such as formers and molds, and other necessary systems and certifications.
PNE expects to fund the capital expenditure, as well as any additional funding requirements for the operations of this new venture, through fund-raising, bank borrowings and/or own-generated funds.
As the gloves business could result in a diversion of 25 percent or more of the group's net assets and contribute over 25 percent to net profits, the company will seek the approval of its shareholders for the project.