GEORGE TOWN: Semiconductor test equipment maker Pentamaster Corp Bhd is investing over RM100mil over the next three years in a medical device plant as the company seeks to diversify into the medical device business to broaden its revenue base.
Group chairman CB Chuah told StarBiz that the group was now in the process of submitting application to get approvals from the US-based Food & Drugs Agency (FDA) and Malaysian Drug Agency (MDA) for the business.
“The plant in Batu Kawan will produce single-use medical devices for the healthcare industry, targeting in particular the dual safety pen needle and safety intravenous (IV) catheter market.
“We have invested RM40mil into the plant and now we are setting up a RM60mil production facility in it.
“The RM60mil will be spent over the next three years to produce medical devices, ” he said.
According to Chuah, the Pentamaster group has registered a subsidiary company called Pentamaster MediQ Sdn Bhd to undertake the medical devices business venture for design and manufacturing of single use medical devices.
Chuah added that the approvals should be obtained in the next few months and the production should commence before the mid of 2021. According to Chuah, around half a billion people are living with diabetes worldwide and the number is projected to increase by 25% in 2030 and 51% in 2045.
“One of the core products, we are making, is dual safety pen needles, which are used by diabetic patients to give insulin shot or injection into their bodies.
“The other product is safety IV catheters, designed for the administration of fluids and drugs and for withdrawing blood, ” Chuah added.
Chuah said that the pen needle market is projected to reach US$1.8bil by 2024 from US$1.1bil in 2019, growing at a compounded annual growth rate (CAGR) of 10.8%.
“The global intravenous catheter market is projected to generate revenue worth US$5.5bil by 2022, registering a 6% compounded annual growth rate (CAGR) for the 2016–2022 period.
“Safety IV catheters are expected to continue holding the larger market share, accounting for 70.2% revenue in 2022 as compared to the conventional IV catheter.
“In 2021, we expect the medical device business to contribute 10% to our revenue, and in 2023, the contribution should hit 30%, ” he added.
Chuah said currently, most of the safety pen needle available are designed with a single side safety feature.
“Only very few manufacturers in the world provide two sided safety or dual safety pen needle.
“Pentamaster MediQ will be among the top five manufacturers in the world to produce dual safety pen needle, ” he said.
The group is co-developing the dual safety pen needle with an European.
“We both will be the co- authors of the patent that is going to be filed later.
“Our dual safety pen needle comes with a special mechanism whereby the tips of the needle are covered or protected after used, that makes it safer in disposing the used pen needles. Pentamaster will promote the product under its own brand name, ” he added.
Moving on, Chuah said the group will invest selectively to diversify.
“The electric vehicle industry is a potential growth segment where we hope to have a stronger presence, ” Chuah said.
According to a BloombergNEF report, the sales of combustion engine cars are expected to drop by 23% in 2020, while the sales of electric vehicles is forecast to dip by 18%.
“The electrification of transport for the long term is projected to grow.
“The report says combustion engine cars will decline in the long term.
“Electric models, which will account for 3% of global car sales in 2020, is projected to rise to 7% in 2023, at some 5.4 million units, ” Chuah added.
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