(Yicai Global) Oct. 24 -- Zhejiang Kanglongda Special Protection Technology will spend CNY1150 million (USD166 million) in Vietnam to build a production base for work gloves to increase the global supply capacity of the company's products and expand its overseas market.

A board meeting reviewed and passed the corresponding investment resolution yesterday, said an announcement released the same day by the major labor protection equipment supplier formerly known as Shangyu Dongda Knit and based in Shaoxing, Zhejiang province on the outskirts of Shanghai.

Located in an industrial zone within Phu Tho province in Vietnam's north within striking distance of China's southern border, the four-phase project will have an annual production capacity of 5 million functional labor protective gloves, 8 million tons of high-strength polyethylene fiber and 5 million cases of disposable gloves on completion. 

Phase one will end in two years, during which time a wholly-owned unit will be set up as the implementing entity.

It will hire local managers, the announcement said. The company will also forge close ties with local officials, trade unions and the Chinese embassy and devise a contingency response plan.

The announcement is silent as to whether China-US trade irritation is behind the investment, but A-share listed companies have announced their investment plans in Vietnam in succession in recent months, including surgical glove maker Shandong Intco Medical Products and hand tool maker Hangzhou Great Star Industrial. 

China's rising labor costs and infiltration into overseas markets are the drivers of these forays abroad.

Worker protection products from the Zhejiang-based company sell in overseas markets through various well-known distributors both at home and abroad, and many famous global protective clothing vendors including US-based MCR Safety, Canada's BBH, Feldmann of Germany, Poland's Raw-Pol and the Australian Paramount Safety are clients of the firm.

Editor: Ben Armour