This figure, according to a Nikkei Asian Review (NAR) report is close to 10 per cent of its headcount.

“It helped us to mitigate the cost increase due to the minimum wage hike,” NAR quoted Hartalega Managing Director Kuan Mun Leong as telling reporters who attended the company’s annual general meeting.

The company has also reduced costs by optimising energy consumption and redesigning its production line, but did not reveal savings. Earlier this month, the company announced a 10.4 per cent year-on-year decline in net profit in the second quarter due to stiffer competition and higher costs.

Earlier this year, NAR said, rival company Top Glove announced it was pruning 5 per cent of its 7,000 foreign workers after the government raised the levy on foreign workers to RM2,500.

The government set the new minimum wage at RM1,000 for Peninsular Malaysia and RM920 for Sabah and Sarawak from July 1. The natural gas tariff also rose by 5.95 per cent from July 15, following a 17.1 per cent increase in gas prices on Jan 1

“The market has bottomed out,” NAR quoted Hartalega Executive Chairman Kuan Kam Hon as saying. “The pricing pressure will lighten.”

The company said that talk of oversupply in the market was unfounded and it is “perceived intensified competition” that has driven glove prices down.

Hartalega’s main products are nitrile gloves for the healthcare and industrial sectors. The company expects stronger demand in health care as nitrile gloves replace natural latex ones. Nitrile is a synthetic rubber and more resilient.

Global demand for rubber gloves is growing at 8 per cent annually, according to the Malaysian Rubber Glove Manufacturers Association.

Hartalega’s largest markets are North America (56 per cent), Europe (28 per cent), and Asia Pacific (15 per cent), according to NAR.

Hartalega has invested RM2.2 billion in its Next Generation Integrated Glove Manufacturing Complex in Sepang, which has more automated manufacturing. It has already completed two plants but delayed commissioning two other plants that should now open by October. The new plants can each produce some 3.8 billion pieces annually.

“We delayed plant three and four to better regulate the expansion to the market,” NAR quoted Kuan as saying. “We do not want to put out a huge capacity and have it turn against us by driving glove prices down.”