Iconic Worldwide Bhd, which is in the tourism and property development businesses, plans to diversify into manufacturing and trading of personal protective equipment (PPE) which includes disposable face masks and gloves with a total investment of RM155.51 mil.
The company said in a statement that it plans to install and commission glove and disposable face mask production lines with a minimum production capacity of 3.1 billion pieces of gloves per annum and 222.7 million pieces of face masks per annum.
Iconic managing director Datuk Tan Kean Tet said: “We expect that the demand for PPE will continue to be sustainable even after the recovery of Covid-19 pandemic due to the prevailing public awareness on the need for self-protection and hygienic practices.
“Therefore, it is timely to capture the rising demand for the product offerings under the PPE business. We will also be targeting countries with high Covid-19 infection rates such as European and the United States as principal export markets for the PPE business.”
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, as well as two main types of disposable face masks namely 3-ply disposable medical face mask and N95 disposable medical face mask.
“We are also in the midst of preparing the necessary applications and liaising with local authorities to obtain the relevant regulatory approval for the PPE business in Malaysia.”
At the initial stage, Iconic intends to set up six double former glove production and dipping lines upon completion of the new facility and the remaining production lines will be gradually set up over the next six months.
As for disposable face masks, Iconic intends to expand existing face mask production with the setting up of five production lines within two months upon completion of the new facility and set up an additional five production lines gradually over the next 10 months.
The RM155.51 mil investment will be used for land acquisition, construction of new facility, installation and commission of production lines, other equipment as well as working capital. It will be funded via a combination of internally generated funds, bank borrowings, and/or fund-raising exercise.
Iconic intends to acquire a parcel of land measuring six acres in Batu Kawan, Penang for the construction of the new manufacturing facility.
A total of 22 production lines comprising 12 gloves dipping lines and 10 masks production lines will be installed and commissioned over the next 12 months, for a total cost of RM78.2 mil.
Currently, Iconic is involved in the development and sale of commercial and residential properties and provision of tourism and other related services such as hospitality management.
For the financial year ended March 31, 2020, property development and tourism contributed 67.2% and 30.4% to its revenue respectively.