RUBBER glove maker Kossan Rubber Industries Bhd (7153) will spend RM60 million in the next two years to expand its operations in Klang, Selangor.
The plans include two new plants, increasing production lines, buying new machinery, upgrading existing equipment and boosting research and development.
Kossan managing director and chief executive officer Lim Kuang Sia said the new plants on 8ha near its existing factory will help meet increasing world demand in addition to producing high-end rubber gloves for the premium market.
"The expansion is also part of our plans to reduce our dependency on foreign workers, beef up automation and innovation, boost productivity and reduce cost," Lim told reporters after Kossan's annual and extraordinary general meetings in Kuala Lumpur yesterday.
He said the first plant will be completed by October, while the other will be ready by next year, bringing Kossan's number of plants to 12, producing 14 billion pieces of gloves a year, or some 14 per cent share of the world's rubber glove market.
Lim also said that Kossan, among the top five rubber glove producers in the country, will launch a new range of glove products for high-end markets like the US, Europe and Japan, as well as emerging markets like China.
Plans to set up its first overseas plant either in Indonesia, Vietnam or Thailand are still being considered.
"This is part of our ongoing expansion plans and we are looking at all possible locations in these countries. We have not decided on the timing of the move and will be cautious and prudent," Lim said.
On another front, he said the firm was open to mergers and acquisitions, but was carefully assessing the offers on its plate.
"If the offer creates value and is at the right price, we might take it."
Kossan has no fixed dividend policy, but has consistently paid 25 per cent of total earnings to its shareholders.
-- by Business Times
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