ALOR STAR: Hong Seng Consolidated Bhd's move to shelve its RM3 billion project to build and operate a nitrile butadiene latex (NBL) manufacturing plant in Kedah Rubber City (KRC) is purely a business decision.
Menteri Besar Datuk Seri Muhammad Sanusi Md Nor insisted that the move has nothing to do with state administration's shortcoming in fulfilling the investor's need in rolling out its project in the country's first dedicated rubber industry park covering an area of 494.5 hectare.
"I was informed on Hong Seng's possible withdrawal (from the proposed investment) last year. It is 100 per cent a business decision, due to the current market situation. It has nothing to do with state not delivering our part to fulfil the investor's needs.
"The state government has fulfilled our part in terms of land acquisition to enable TNB (Tenaga Nasional Bhd) to build high voltage transmission line for KRC, it is all done.
"We have also accommodated the investors request for a smaller buffer zone size while the water supply for the initial stage of KRC operation is also ready. Hence, on our side, we have done our part," he said at a press conference after chairing state-owned Kulim Technology Park Corporation (KTPC) board meeting at Wisma Darul Aman here today.
Present were state Industrial and Investment, Higher Education, Science, Technology and Innovation Committee chairman Dr Haim Hilman Abdullah and his predecessor Datuk Dr Ku Abdul Rahman Ku Ismail.
Sanusi believed that Hong Seng's decision to shelve its proposed investment would not be a major setback to KRC.
"This is just the first phase. There are more rubber latex downstream industries which are suitable for KRC. The NCIA (Northern Corridor Implementation Authority) as the developer of KRC has approached other potential investors," he said.
Meanwhile, Ku Abdul Rahman, who is also Kubang Pasu member of Parliament, said Hong Seng's decision to scrap its plan to build and operate NBL manufacturing plant in KRC was due to stiff competition with synthetic gloves manufacturers from China.
"The synthetic gloves market in Malaysia has suffered a significant dive due to stiff competition with manufacturers from China.
"Its price suffered a significant plunge from US$100 for every 1,000 pieces previously to under US$20. Local manufacturers are suffering hefty losses. Thus they are forced to call off the investment," he said.
However, he believed that the local gloves manufacturing players would probably shifting their focus towards advanced surgical gloves manufacturing to tap into increasing demand in the global market.
Last Wednesday, Hong Seng announced that it was shelving a RM3 billion project to build and operate a NBL manufacturing plant in KRC, amid a downturn in the glove industry.
It was reported that Hong Seng bought 42.49 hectares of federal land in KRC for RM45.74 million from NCIA to develop the plant in 2020.
Following its decision to suspend the NBL plant, the company said it will renegotiate with NCIA to explore alternative use of the land.
In response, NCIA said the agency remains committed to developing the KRC as planned, despite Hong Seng's decision to abort its plan to build NBL manufacturing plant there.
It was reported that NCIA has said phase one of the project has been completed on schedule and KRC is ready to receive investments from the rubber industry-related sectors that focus on downstream rubber product production, research and development (R&D) as well as services and support.