SEPANG: A doctor’s gloved hands are the first contact cradling a newborn baby that has just emerged from the mother’s womb.
In cherishing this momentous occasion, the humbling role of the rubberised medical device commonly goes unnoticed, despite Malaysia’s globe-trotting rubber glove sales team securing orders from hospitals in more than 190 countries.
All over the world, rubber gloves are used in the healthcare, food handling and cosmetics sectors.
Once dominated by western giants such as Kimberly-Clark, Ansell, Cardinal Healthcare and Baxter, Malaysia’s glovemakers, including Hartalega Holdings Bhd, Top Glove Corp Bhd, Supermax Corp Bhd, and Kossan Rubber Industries Bhd are now the global leading players in the rubber and nitrile gloves in the industry.
In an interview with the Business Times, here, recently, Hartalega managing director Kuan Mun Leong stressed the importance of facilitative policy-making in Malaysia’s rubber manufacturing that will catalyse export growth to more than RM10 billion a year.
For almost 20 years, Malaysia is the world’s top supplier of rubber gloves. Last year, the country exported more than 110 billion pieces of rubber gloves to more than 190 countries.
This makes up two-thirds of the global market for rubber gloves.
In the 1980s, it took 15 workers to produce one million gloves but with increasing automation of production lines, manufacturers have manage to reduce the headcount to four workers.
“At Hartalega, our productivity is much higher. Today, we only need 3.5 workers to make a million gloves,” said Kuan.
Under the 2016 Budget, the government reinstated reinvestment allowance for manufacturers with up to 60 per cent of capital expenditure in 2016, 2017 and 2018.
“We hope the government will consider extending the tax incentive to beyond 2018. We are reinvesting heavily to automate more processes and develop better performing medical gloves.”
“We are grateful for government’s support because automation is capital-intensive. As we expand, we hire more engineers, chemists and market development specialists.
“A longer term of reinvestment allowance, stretching across 20 years, and double tax deduction for talent development would go a long way to catalyse export growth. With the right support, our sector can contribute more to Malaysia’s gross national income,” he said.
Kuan gave an insight into how his family-controlled business, which counts his father, brother and cousins in decision-making positions, emerged as the world’s most valuable glovemaker.
With its shares trading at around RM4.50, RM7.5 billion worth Hartalega is a darling among pension funds and big-time investors in the stock market.
When Hartalega made its debut on Bursa Malaysia in 2008, the investing community of stock analysts and fund managers got to know that it is the world’s fastest glovemaker.
Hartalega was churning out 28,000 gloves per hour at that time.
What this means is that the company produces more gloves with less resources compared with its rivals. Today, Hartalega continues to earn fat profits for its shareholders as it banks on lean manufacturing.
Investors love Hartalega’s technological prowess that reaps productivity of some RM300,000 per worker while the industry’s average is only three quarters of that.
The company’s mantra is to sell gloves on quality rather than on volume.
Some investors like Hartalega for balancing the needs of people, planet and profits in its daily operations.
The company observes environmental protection as it consistently complies with the Department of Environment’s standards in wastewater treatment within its factories.
As Kuan walked the production lines, he reminded visitors to don hairnets to prevent accidental entanglement with fast-moving machinery or contamination of the medical gloves.
“We have 24 lines here and they are designed to run at 45,000 pieces of glove per hour,” he said.
He also highlighted that Hartalega has built-in chillers to pump cool air into the factory.
“My staff spends many hours here. So, it is only right we design a conducive working environment from ground up.”
Throughout the factory tour, there were signages written in sanskrit.
“It is important that every staff here, whether they are Malaysian or Nepalese, understands the importance of safety,” he said.
Lunch hour at Hartalega is at one o’clock. As the lights on the ceiling start to dim, many staff members make their way to the canteen, including Kuan.
He is at ease tucking in “economy rice” with his colleagues, no matter what their social background or job designation is in the company.
“Many of our employees are from Nepal and they practice Hinduism. We don’t serve beef in the canteen and we oblige to requests for more vegetable and mutton dishes on the menu.”
After lunch, Kuan took out his handphone and tapped on an app.
“Our factories run 24/7. To keep tabs, we have developed our own app. So, while I’m travelling overseas, meeting clients, I would know in real-time, which lines are running smoothly and which ones are not.”
This is an example of Hartalega embracing Industry 4.0, where its Bestari Jaya and Sepang plants are increasingly digitised, fitted with sensors and connected to boost cost efficiency.
As robotics, data captured via sophisticated sensors, predictive analytics and Internet of Things becomes increasingly integrated, manufacturers reap cost savings in real-time quality control and maintenance.
The Industry 4.0 way of doing business is a game changer because it elevates inter-operability, decentralisation of decision-making and real-time capabilities.
According to the Statistics Department, the manufacturing sector, which contributed RM626 billion last year, is a key economic driver.
It accounts for half of Malaysia’s RM1.16 trillion economy and more than 80 per cent of RM780 billion total exports.
Industry 4.0 or the fourth industrial revolution, has the potential to transform Malaysia’s manufacturing scene by helping to reduce reliance on manual labour and keep exports competitive.
A knowledge-based economy is in the making as more manufacturers move up the value chain. The first three industrial revolutions involve steam power, the assembly line and automation. Today, the fourth is essentially about “smart factories”.
In facilitating Industry 4.0, the government must consistently enforce data protection so as to create a trustworthy ecosystem within which manufacturers, their suppliers and clients feel comfortable to share confidential and proprietary information.
It is a myth that innovation is confined to the research and development (R&D) department.
“We want to encourage accountability among our colleagues and move away from silo mentality.”
Every other division within the company strives for excellence as part of Hartalega’s brand promise.
Kuan embraces calculated risk-taking, accepts that setbacks are inevitable and relishes on teamwork.
As it is, process improvement and product development that leads to best practices do not always work at the first try.
In times of repeated disappointments, it is very easy to subconsciously fall into the trap of denial, blame and self pity.
The boss, therefore, needs to be aware that what he says and does, has a direct bearing on the company’s culture.
In taking an objective approach Kuan and his team methodically document what works, what does not and what they can build upon.
“Trial-and-error, tinkering .. these are all part of problem solving,” he said.
Innovation usually starts from a nagging question at the back of the mind. The invention of the automated glove stripping mechanism started with the query, “how do we mechanise this repetitive and tiring process of removing gloves from the hand molds?”
In being innovative, sometimes, one has to go against the grain and perhaps, risk being criticised as “wasting money”.
“At Hartalega, we don’t have an annual R&D budget. We cannot be too calculative. We must dare ourselves to take on challenges. Some ideas fail but there’s nothing to be embarrassed about. We take these setbacks as lessons.”
Spotting a visibly tanned face, the 40-year-old Kuan revealed that he regularly de-stresses from work by playing golf or going for off-road expeditions on his mountain bike.