Hartalega to spend RM250mil on technology, automation in FY27

Hartalega Holdings Bhd intends to allocate roughly RM250 million in capital expenditure (capex) during financial year 2027. The primary focus of these investments is to enhance production technology and expand automation. Hartalega's Chief Executive Officer, Kuan Mun Leong, stated that the company plans to upgrade existing production technology instead of constructing new lines.

The initial capex set aside for financial year 2027 was RM234 million, but actual spending is expected to surpass that amount. Additionally, the company anticipates spending around RM10-15 million on artificial intelligence technology, bringing the total capex to approximately RM250 million for upgrading technology. Hartalega aims to implement scalable technologies and processes that have been validated through proof-of-concept projects, rather than adopting untested systems.

Plant 9, the group's newest manufacturing facility in Sepang, serves as a model for this transformation, having reduced its workforce by 27% using automation and AI technologies. The company intends to replicate these best practices and technologies across all its manufacturing operations as it operates approximately 100 production lines.

Hartalega has recently restructured its organization, production lines, and technologies over the past 18 months to improve efficiency. The revival of Plants 3 and 4, which were previously dormant following weaker demand post-Covid-19 pandemic, is also part of this transformation. These plants will not merely return to their previous operating models but will incorporate new technologies and practices, such as halving the workforce at Plant 3 while increasing output by 8.0% per production line.

The revival of Plants 3 and 4 is expected to contribute at least nine billion pieces to Hartalega's current output of about 37 billion pieces.