By LYDIA NATHAN
LKL International Bhd, provider of healthcare beds, peripherals and accessories, is adding more medical device brands to its line of products that would improve its profitability in the current financial year ending April 30, 2018 (FY18).
The company is also expected to experience further growth with the establishment of its new factory in Seri Kembangan, Selangor.
According to a statement released by LKL International, the group had committed a capital expenditure of RM10.5 million for the new factory and machinery, with the majority paid in FY17.
LKL International MD Lim Kon Lian said the group is reporting positive growth in the newly-established medical devices segment proven by the growing number of enquiries and shipment of products, as they are confident this division will be able to contribute to the performance of the company onwards.
“The inclusion of high-value medical devices in our range of products effectively strengthens our capabilities to meet a broader set of customer requirements in the healthcare sector, as we strive to become a leading supplier of choice,” he said.
Since June 2017, the group has initiated the distribution of Nihon Kohden medical devices, through its 70%-owned joint-venture company, TMI Medik Group Sdn Bhd.
Meanwhile, the new factory in Seri Kembangan that was acquired in April this year is currently undergoing renovations and will commence operations in the second-quarter ending Oct 31, 2018 (2Q18).
The factory is expected to support future growth demands by increasing storage capacity and the space necessary for new machinery.
“Furthermore, we expect to benefit from improved efficiency and lower wastage in our manufacturing operations once the new factory and machine come online in 2Q18.
“The greater automation and reduced labour dependency would allow us to mitigate cost escalations and strengthen our competitiveness in the international arena,” he said.
The fully operational Computer Numeric Control (CNC) punching machine (TruPunch 2000) is expected to boost the group’s operations efficiency and process accuracy with less wastage and reduce the dependency on manual labour alongside the CNC laser tube machine (TruLaser Tube 5000 Fiber), which will be in use in 2Q18.
The group recorded revenue of RM6.09 million for the current financial quarter ended April 30, 2017, slipping 34.58% compared to the preceding year’s corresponding quarter, on the back of lower revenue generated from the medical/healthcare bed segment due to the general economic slowdown.
The local market had the most significant portion of orders amounting to RM4.08 million (67.03%), followed by exports to Asia, the Middle East, Europe and Africa.
The current financial quarter under review saw the group’s profit decreased by RM0.299 million partly set off by the increase in gross profit margin due to the product mix sold in the current financial quarter.
Of the total FY17 revenue, RM16.9 million was derived from the medical peripherals and accessories segment, while RM9.6 million was derived from sales of medical/ healthcare beds.
Lim said the company recognised a boost in enquiry and sales of medical beds, peripherals and accessories over the past few months.
In addition to the increasing interest in the medical devices the group distributes, he added that this will contribute positively towards the company’s growth.