Hong Seng Consolidated Berhad accepted a Letter of Intent (LOI) from Mitsui & Co (Malaysia) Sdn Bhd (Mitsui) to form a strategic partnership for Hong Seng’s nitrile butadiene latex (“NBL”) business at Kedah Rubber City and tank farm integrated logistics services business at Penang.
This strategic collaborations shall further strengthen Malaysia’s dominance in the global glove industry with its world-class technologies and capabilities.
According to the LOI, Mitsui expressed its intention to provide a one-stop supply chain management for feedstocks and raw materials of Hong Seng’s NBL plant, as well as finance and provide raw materials for the tank farm established by Hong Seng’s fully-owned subsidiary HS Petchem Sdn Bhd.
“We are very proud to be a part of this national project in Kedah Rubber City which is expected to contribute RM14.7 billion to the country’s Gross Domestic Product (GDP) and create 14,500 spillover jobs at various levels within 15 years once it is completed by 2030,” Hong Seng Group Managing Director Dato’ Seri Teoh Hai Hin said.
“The strategic partnership that we will form with Mitsui will enable us to leverage on the expertise and global network of Mitsui in the chemical supply industry, while helping to strengthen Mitsui’s market in Malaysia,” added Dato’ Seri Teoh.
To recap, HS Petchem had accepted the Letter of Offer on 1 November 2021, issued by Penang Port Sdn Bhd for sub-lease of a part of an industrial land located at Prai Bulk Cargo Terminal, Pulau Pinang. The Group plans to construct a tank farm for the feedstock storage and supply of Butadiene and Acrylonitrile petrochemicals as well as provisioning of logistics services for the delivery of the said feedstock.
The Group said that due to the rise in demand of nitrile gloves, the raw materials required are also in severe shortages, therefore, by setting up its own feedstocks tank farm facilities, Hong Seng will be able to capture a substantial market and fill up a void in the supply chain. The construction is expected to be completed within 18 months in sync with the production commencement of the NBL project.