KUALA LUMPUR: Hartalega Holdings Bhd is buying of 250 acres of land in Kubang Pasu, Kedah from Northern Gateway Free Zone Sdn Bhd (NGFZ) to build new factories to expand its glove manufacturing operations.
In a statement to Bursa Malaysia on Wednesday it said the acquisition marks Hartalegas latest phase of growth, with an investment of RM7bil to build 16 manufacturing facilities over the next 20 years in Northern Corridor Economic Region.
It had entered into a sale and purchase agreement with NGFZ to purchase the land. NGFZ is wholly owned by Northern Gateway Sdn Bhd (NGSB), a unit of the Ministry of Finance Incorporated (MOF Inc).
NGSB is the master developer for the Kota Perdana Special Border Economic Zone after securing the relevant authorities approval on the Kota Perdana Master Development Plan on Jan 13,2019.
Hartalega said the purchase consideration of RM228.69mil for the 250 acres is RM21 per square feet.
Concurrently, both parties also signed an option agreement for Hartalega to purchase another 130 acres of land in the same location.
It said the upside was potential cross-border trades growth between Thailand and Malaysia; attractive incentive scheme offered by authority while the site is next to North South Expressway. NGFZ will provide the main infrastructures.
The acquisition comes in line with the upsurge in demand of medical glove across the globe due to the unprecedented global pandemic event. Covid-19 has created higher safety and hygiene awareness across all industries.
As a result, the medical glove industry is expected to undergo a structural step-up in demand with rising awareness on the importance of hand protection.
The acquisition will enable the company to create greater value and earning potentials for its stakeholders, it said.
Hartalega said the investment will be part of the companys growth plans towards 95 billion pieces by 2027.
It added the acquisition will enable to company to benefit from the attractive incentive scheme offered by authority.
In line with governments aspiration to drive the economic growth in the northern corridor regions, the investment in Kota Perdana SBEZ is a fine example of public-private partnership project to spur the economic development and create multiplier effects to the surrounding communities and provide job opportunities, it said.
Meanwhile, Finance Minister Tengku Datuk Seri Zafrul Aziz, in announcing this latest investment addition into Kota Perdana SBEZ by Hartalega, said:
The strategic investment decision by Hartalega, being the worlds largest nitrile glove producer is an endorsement of Kota Perdana SBEZs rising status as a new and preferred investment destination.
“It has always been the governments strategy to encourage growth and innovation-focused industry players who can raise productivity and contribute to the nations economy.
“We are, therefore, very pleased to support the expansion of Hartalega in Kota Perdana SBEZ.
Tengku Zafrul said most significantly, the project is expected to generate more than 12,000 jobs and help upskill local talent and vendors, while supporting infrastructure development.