Malaysian rubber products manufacturer Kossan Rubber Industries Bhd plans to set up a new manufacturing plant in Jakarta, Indonesia, in the second half of this year. According to its General Manager of Group Corporate Affairs and Business Development, Edward Yip, the company has already acquired a piece of land in Jakarta for about US$2 million and is investing an additional RM10 million to build a factory to produce technical rubber products. The plant is part of the company’s expansion and growth strategy to increase production capability and earnings.
Indonesia is one of the world’s largest rubber producer, and having a plant there would increase the group’s production efficiency, Yip is quoted to have said in local press, adding that the firm is targeting to have a higher profit margin with lower production cost.
Yip also said that Vietnam is another country in the pipeline of the company’s expansion plan to produce gloves for export, considering that the country is one of the emerging rubber producers in the world, besides having a big market.
In Malaysia, the firm has secured more than 32.32 ha of land for expansion. Another three plants are under construction and expected to start up from the first quarter to second quarter of 2014, with a production capability of five to six billion pieces of nitrile gloves, he said.
The consistency in capacity growth is in line with the company’s target to produce 32 billion pieces of gloves/year by 2017.
Meanwhile, Kossan reported its strongest earnings growth in the industry last year, growing at 37% year-on-year in September 2013. Yip said the company has been consistently growing since its inception with an unbroken profit record and uninterrupted dividend payments to shareholders since its listing in 1996.