Iconic diversifies into PPE manufacturing with total investment of RM155.51 million
4 month ago, 02-Sep-2020
Datuk Tan Kean Tet
KUCHING Iconic Worldwide Berhad (Iconic) today said it intends to diversify its existing core businesses to include the manufacturing and trading of personal protective equipment PPE) which includes disposable face masks and gloves with a total investment of RM155.51 million.
A filing with Bursa Malaysia shows that the group plans to install and commission glove and disposable face mask production lines which are expected to yield a minimum production capacity of approximately 3.1 billion pieces of gloves per annum and approximately 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, andor fund-raising exercise.
Iconic has identified and plans to acquire a parcel of land measuring approximately 6 acres located 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 course of 12 months, for a total cost of RM78.2 million.
The Board will be seeking prior approval from its shareholders for the Proposed Diversification at an extraordinary general meeting to be convened. Barring any unforeseen circumstances, the Proposed Diversification is expected to be completed by second half of 2020.
Furthermore, the new factory is expected to be completed within 12 months from the commencement of construction and operate by second half of 2021.
Iconic Worldwide 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 products offerings under the PPE Business. We will also be targeting countries with high Covid-19 infection rates such as European & 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. It shall also provide an opportunity for the Group to grow its revenue and enhance its business portfolio to drive an improved financial performance.
We intend to manufacture and trade latex and nitrile gloves for household, industrial and medical use, as well as 2 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 6 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 course of the next 6 months.
As for disposable face masks, Iconic intends expand existing face mask production setting up a total of 5 production lines within 2 months upon completion of the new facility, and set up an additional 5 production lines gradually over the course of the next 10 months.
The PPE Business will be spearheaded by Kean Tet and Tan Cho Chia (executive director of the group), supported by the existing Iconic management team.
They are both experienced in the areas of management and executions of business planning as well as supervision of the daily business operations.
Additionally, the group has appointed Nexus TAC Sdn Bhd as the consultant for the PPE Business to provide guidance and advise the management team of the Group with regards to matters involving the manufacturing of face masks and application for International Organization for Standardization (ISO), CE endorsement and FDA certification.