Circuit board maker PNE PCB Bhd is venturing into the rubber gloves manufacturing and distribution space.

PNE said its wholly-owned subsidiary, PNE Glove Sdn Bhd, plans to set up five glove production lines with each making approximately 300 million pieces per year.

On an annual basis, it expects to contribute around 1.5 billion pieces of gloves to narrow global demand-supply gap

PNE Glove has also entered into a lease agreement with GP Autobat Sdn Bhd to lease certain industrial buildings located in Klang, Selangor to house its future glove production operations.

The group’s decision to diversify its business into the production of gloves comes amidst the swell in demand as a consequence of the Covid-19 pandemic

PNE said the capital expenditure to commission and install all five glove-dipping lines and related facilities is expected to be RM60 million, which will be funded via a fund-raising exercise, bank borrowings and/or internally-generated funds.

The group is in the midst of identifying suppliers/distributors for the supply of raw materials required for the production of rubber gloves

The raw materials are expected to be sourced locally and/or overseas. This is subject to the lead time for the set-up, installation and commencement of the glove-dipping lines and availability of raw materials

The production of rubber gloves is expected to commence in stages by the fourth quarter of 2021.

Going forward, the new business is expected to contribute 25% or more to the net profit of the group.

Meanwhile, the Malaysian Rubber Glove Manufacturers Association (MARGMA) has projected Malaysian exports of rubber gloves to reach between 250 billion and 270 billion pieces in 2020, an increase of between 33.69%and 44.39% from 2019 due to the ongoing pandemic.

For the year 2021, MARGMA estimates Malaysia’s rubber glove export revenue to hit RM34 billion amid an annual demand growth rate of 15% to 20%.

Globally, demand for gloves is set to reach 420 billion pieces.