Hartalega - Producer of Synthetic Rubber Gloves

Company Background

Hartalega is the world’s largest producer of synthetic rubber gloves, used mainly in the healthcare industry. Besides its own brand, the company is also an original equipment manufacturer that makes high-quality surgical and laboratory gloves. The company was founded in 1988 by Kuan Kam Hon, who is now executive chairman. He is an entrepreneur who built his fortune as a house builder, and later by dealing in woven labels and badges. Annual production capacity of the company is over 13 billion gloves, which was nearly 30% of Malaysia’s exports in 2013.

Its products are exported to about 40 countries. Sales in the U.S. make up about half of the company’s revenue, followed by Europe and Asia.

Like Top Glove, its rival, which is the leader in natural rubber gloves, Hartalega was able to grow rapidly, especially in the mid-2000s, when hospitals in developed economies such as the U. S. and Europe began to switch from latex to nitrile gloves.

Nitrile gloves cause fewer problems with skin allergies. Ownership in Hartalega is controlled by the Kuan family, which was led by second-generation Managing Director Kuan Mun Leong.

Vision, Mission and Goals

Hartalega has enjoyed many successes over the years, yet e will never be content. We aim to push the boundaries of technology and practice a culture that is driven to deliver.

Vision

To be the Number One glove company that produces and delivers the best and most innovative gloves in the world and to be recognised as a caring company to the community and environment.

Get quality help now

WriterBelle

Verified

Proficient in: Economics

4.7 (657)

“ Really polite, and a great writer! Task done as described and better, responded to all my questions promptly too! ”

+84 relevant experts are online

Hire writer

Mission

To deliver the best possible protection to people who work with their hands in exposed and challenging environments by providing consistently superior, safer, and more convenient gloves in chosen product markets.

Goals

To develop the capabilities of our people, and to expand our workforce with fresh talent. A key initiative implemented is our Competency Development Programme (CDP). The various components of the CDP enable us to equip employees with the necessary skills and knowledge. This also subsequently allows us to create a talent pipeline of potential future leaders for the Group.

Core Values

Our Core Values are embodied in the acronym, SHIELD, which stands for:

These values represent the qualities that Hartalega incorporates in all that we do, in order to propel the Group forward and enable us to realise our Vision and Mission to deliver the best possible protection via our high quality gloves.

Board of Directors

• Mr. Kuan Kam Hon
• Executive Chairman
• Mr. Kuan Mun Leong
• Managing Director Mr. Kuan Mun Keng
• Executive Directors Dr. Danaraj A/L Nadarajah
• Executive Directors

Components of The General Environment

Political, Economic and Social Factors

Hartalega’s groundbreaking achievements are a result of their seamless production systems, and uncompromising efficiency. They cultivate a culture of correct practice, resourcefulness and drive to be the best attributes which have supported the company throughout its growth to become the world’s largest supplier of Nitrile gloves.

The leaders and innovators guiding Hartalega through its many successes, are renowned for turning challenges into opportunities, and have demonstrated this with their stand out decision making from day one. The inspiring decision to engineer production lines in house rather than import unreliable ones from overseas, was the first of many brave business moves made by founder Mr Kuan Kam Hon, and sets the precedent for today’s global success.

The ingenuity and resourcefulness demonstrated by Mr Kuan, and actioned by his team of specialist engineers formed a benchmark in Hartalega’s history, and signified the beginning of an era where all key production systems and technologies were developed in house. In this way, Hartalega improved efficiency and surpassed industry standard. This philosophy of innovative excellence is steeped into the culture of hartalega today and drives them to push the boundaries of invention and technology in order to produce the best clinical gloves in the world.

As consumer demand increase and market trends evolve, Hartalega will endeavour to adapt, grow and deliver excellence in order to sustain their pole position at the head of the industry.

Technology Factors

The Next Generation Integrated Glove Manufacturing Complex (NGC) project was accorded the Entry Point Project (EPP), as part of the Government Economic Transformation Program (ETP) due to its high economic impact. NGC will contribute significantly to the transformation of the glove industry in Malaysia from one that is regarded as low-tech and foreign labour intensive, to one that is acclaimed to as high-tech and innovation driven with large number of skilled workforce. Hartalega company use the following technologies:

• High-Tech Production plants
• High level automation with implementation of industry 4.0
• Fastest production lines in the world running at 45,000 pcs/hr
• Centre of Excellence (R&D)
• Advanced R&D facilities
• Employment of scientists to carry out research and development
• Renewable Energy
• Environmentally friendly clean energy technology
• State of the art technology in fuel management system and also highest standard in population control

At the core of Hartalega ’s expansion, is passion for product innovation and engineering technologies. The new innovation model concentrates on science-based R&D and proprietary engineering technologies that will generate patents and tacit company know-how. This new generation of science-based R&D will create opportunities for new sources of market growth.

Components of The Task Environment

Effect of Supplier

Establishing the value or the contribution made by the supplier in meeting for buying firm’s needs. It can also relate to the determination of the supplier’s worth in Hartelega’s supply base structure. In order to effectively, the evaluation of supplier performance due to price, quality and delivery.

The relationships that includes such as qualitative factors and high trust levels. Buyers captive arises when the buyer has one source to buy from such as when there is only one supplier or manufacturer of product. So, both firm’s to reduce cost and share profits.

Effect of Competitor

A competitiveness is increase the demand for control and coordination within an organization. The competitor for an organization interacts with production technology, the number of products and the extent of product design. They generate understanding about the past, present and future strategies.

How to monitor the way competitors do business:

1. The products and services they provide and how they market them to customers.
2. The prices they charge.
3. How they distribute and deliver.
4. The devices they employ to enhance customer loyalty and what back- up service they offer.
5. Their brands and design values.

Effect of Distributers

Distributors are sell the products and acquire and assimilate new knowledge to improve their services and consequently, the sales of manufactured products. Distributers tend to focus on organization which supports them well. They also support, reduce costs and optimize processes, as well as manage inventories which creates value for manufacturers and customer alike. The distributor is most often the relationship manager in term of aftercare, troubleshooting and dispute resolution. This emphasizes why a distributor needs to service it’s customer well if it wants to maintain a healthy consumer demand.

Effect of Customers

Customers are helping Hartalega Sdn Bhd by meet its goals and they maintain close contact with them. They can get close to customers by conducting marketing research and other feedback methods that encourage customers to share their thoughts and feelings. Customers reaction to the design of a product may influence the type of raw materials used in the product. Finally, customers are the reason an organization is in business. Customers are not only key to revenue and profits, they are also key to creating and maintaining jobs within the organization.

Issues and Potential Solutions

Hartalega Holdings Berhad is a gloves manufacturer and began their business with the vision of produce gloves that protect life (Hartalega 2013). Hartalega has experienced tremendous growth in the market and there are many issues and problems that faced by them. The first issue that faced by Hartalega is issue about labor. The recent governments policies about foreign labor have cause a great concern for the gloes industry. The gloves industry has voice out their concerns towards the issue because hired labor would have an impact on the manufacturer’s costs. Besides, more and more glove manufacturers are using automation and it will decrease the reliance on manpower.

Next, pollution is one of the most important issues that faced by Hartalega as their company’s reputation has affected by the negative news or rumors. Hartalega was received complaints from the Deputy Minister in the Prime Minister’s Dept and a few residents of Taman Suria and claim that they are causing air and water pollution. Hartalega deny all the accusation and declare that they are operating legally according to the Malaysian environment regulatory standard. This might affect the reputation and the creditworthiness of Hartalega and might cause the market share decrease in this particular time frame.

Furthermore, the economic have influence glove industry will continue to be unstable due to rises in material and production costs. Moreover, high latex price also is one of the issue that faced by Hartalega. Latex prices continue to be volatile would bring an effect to its margin. Supply of latex may be reduced due to the weather conditions. During the dry season in Thailand and Malaysia, it would decrease production latex. Thus, price of latex during dry season will be slightly higher compare to other season. Besides that, issue that faced by Hartalega is fluctuation of US dollar. USA is a key market for glove industry and has contributing part of the market share of Malaysian industries. Fluctuation on US dollar has affected the margins of the company.

Potential Solutions

Remote environment is that factors affect a form of decision making abilities, but are beyond its control. Political, economic, sosial, technological and ecological factor are the factors that include in the remote environment. The first factor is political factor. Hartalega has exports almost all of their products mainly to the developed countries such as USA, Brazil, Japan, Germany, Europe, Malaysia and others. Hartalega also has expanded its business successfully to China and India. Gloves sales have increase but a little drop in the selling prices. Major output of the company is made up by nitrile gloves. The total costs of the gloves increases due to the high output and increase in labor costs. Besides, the recent governments policies about foreign labor have cause a great concern for the industry. Hartalega have to adjust the wage structure of their workers due to the minimum wage ruling that regulate by the government. Stringent government regulatory also is a threat for Hartalega.

There are many government regulations and policies need to be follow by the company such as minimum wage legislation, guidelines on buffer zones and more. If the companies fail to follow or break the rule that enforce by government , it may bring them into trouble, such as they might receive penalty from the government. Next is economic factor. Fluctuation of US dollar, raw materials prices increase and fuel costs rising has bring an impact towards the gloves industry with challenging economic conditions. Fluctuation on US dollar has affected the margins of the company. The nitrile gloves have experienced declining its margins due to high raw materials price and face competition with their competitors.