Hartalega CEO Kuan Mun Leong
KUALA LUMPUR: Hartalega Holdings Bhd
plans to spend RM300 million on capital expenditure (capex) over the next 12 months to increase production capacity and automation, said chief executive officer Kuan Mun Leong.
Kuan said Hartalega is focusing on smart manufacturing.
"We have earmarked RM300 million in capex for the next 12 months.
"Out of this RM300 million, about RM170 million will be invested in new capacity for production," he said at a press conference after the company’s annual general meeting today.
He said the remainder will go towards upgrading the company’s automation for its production lines, with a focus on more advanced automation technology.
"While it's difficult to provide an exact figure, we hope to reduce manual labour by 15 per cent to 20 per cent.
"This automation process will take up to two years to complete, representing a significant overhaul. Currently, our production lines are highly automated, with close to 85 per cent of processes already automated," he said.
Kuan said that due to changes in the competitive landscape, Hartalega need to further enhance its technology to achieve full automation, higher yield and increased output.
"This substantial investment will not only improve automation but also enhance the quality of packaging, which is not easily quantified in financial terms, but offers a competitive advantage," he said.
Regarding the strengthening of the ringgit, Kuan said the company faced some challenges as certain costs tended to rise.
"We will attempt to pass on these costs to customers because we adjust our prices on a monthly basis.
"For instance, in September, our pricing will reflect the impact of the stronger ringgit and we will transfer the increased costs to our customers," he added. - Bernama
