Iconic Worldwide diversifies into PPE manufacturing

The demand for PPE is expected to continue to be sustainable even after the recovery from the pandemic

by NUR HAZIQAH A MALEK / pic credit: ANNUAL REPORT

ICONIC WORLDWIDE Bhd plans to invest some RM155.5 million to diversify into manufacturing and trading of personal protective equipment (PPE), disposable face masks and gloves.

The company, which is primarily involved in tourism and property development, plans to instal and commission glove and disposable face mask production lines which are expected to yield a minimum production capacity of 3.1 billion pieces of gloves and 222.7 million pieces of face masks per annum.

“The RM155.51 million investment will be used for land acquisition, construction of new facility, installation and commission of production lines, other equipment and working capital.

“It will be funded via a combination of internally generated funds, bank borrowings, and/or fund-raising exercise,” the company stated in a filing to Bursa Malaysia yesterday.

Its MD Datuk Tan Kean Tet said the demand for PPE is expected to continue to be sustainable even after the recovery from the pandemic due to prevailing public awareness on the need for self-protection and hygienic practices.

“It is time to capture the rising demand for product offerings under the PPE business.

“We will also be targeting countries with high Covid-19 infection rates such as European countries and the US as principal export markets for the PPE,” he said.

He added that the proposed diversification will provide an alternative income stream to the group, which will reduce its business concentration risk and mitigate its reliance on the existing core businesses.

“We intend to manufacture and trade latex and nitrile gloves for household, industrial and medical use, and two main types of disposable face masks, namely three-ply disposable medical face mask and N95 disposable medical face mask.

“We are also in the middle of preparing the necessary applications and liaising with local authorities to obtain the relevant regulatory approval for the PPE business in Malaysia,” he said.

The company plans to acquire a parcel of land measuring six acres (2.43ha) in Batu Kawan, Penang, for the new manufacturing facility’s construction, which is expected to be completed within 12 months and operational by the second half of 2021.

A total of 22 production lines comprising 12 gloves dipping lines and 10 masks production lines will be installed and commissioned for 12 months, for a total cost of RM78.2 million.

At the initial stage, the company intends to set up six double former glove production and dipping lines upon completion of the new facility and the remaining will be gradually set up over the following six months.

It also intends to expand on existing face mask production by setting up five production lines within two months upon the new facility’s completion and set up an additional five production lines in the next 10 months.

As of June 10, the company announced its wholly owned unit Iconic Medicare Sdn Bhd to venture into the business, in which the group has acquired and installed face mask production machines in a rented manufacturing facility in Juru, Penang.

Currently, the production machines are producing a minimum of 30 million pieces of face masks per annum.

The group is involved in the development and sale of commercial and residential properties and tourism services provision, in which both contributed 67.2% and 30.4% to its revenue respectively for the financial year ended March 31, 2020.

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