PETALING JAYA: Iconic Worldwide Bhd remains confident that its new personal protective equipment (PPE) venture is the way forward for the company and says it should see some returns on investment from this business by the end of next year.
This is despite the availability of Covid-19 vaccines here and globally, which could translate into lower demand and hence, pricing, for PPE.
Group executive director James Tan said the Penang company is “passionate and confident” about this new venture as it is in it for the long-haul.
“The reason we ventured into this sector is not for the short-term, and not for Covid-19 purposes only, ” Tan (pic) told StarBiz.
According to Tan, the Penang company will be spending some RM155mil to build more PPE manufacturing facilities in Batu Kawan and should see some returns in nine to 12 months after full production capacity of 12 glove production lines kick in by the end of the year.
“We are targeting to fully complete and commission our face masks and glove production facility in Batu Kawan in the shortest time possible.
“In the meantime, we are also sourcing for suitable land for another production plant as our ultimate target is to have 60 glove dipping production lines, ” Tan added.
The company, raised some eyebrows last year when it diversified into the business of PPE, stating that it wanted to be the fifth-largest glove maker globally, in less than five years.
Kean Tet, who is Tan’s father, had in January 2019 surfaced as a major shareholder in the group which was previously known as Sanbumi Holdings Bhd, a company focused on property.
The Tan family then made the decision to diversify into the PPE business.
“We believe that the population worldwide is getting more concerned about hygiene and people will continue to use PPE such as gloves and face masks in public areas, especially in the service industry, ” Tan said.
“Before the pandemic outbreak, the mindset of the public was that those who wore PPE in public areas were either sick or having some virus.
“But now, even people in western countries are able to accept and acknowledge the importance of wearing a face mask, ” he said.
“Governments around the world are also more prepared to face another possible pandemic outbreak and will continue to encourage the use of the PPE, ” he added.
Under its property development business which is ongoing, Tan said the company continues to generate revenue through progress claims from its property projects that have been fully sold out.
As for its hotel business, he said Iconic was experiencing a pick-up in occupancy as movement restrictions have eased.
He, however, did not elaborate on this.
Iconic, which made a net profit of RM3.3mil in its latest quarter, runs the Iconic Hotel in Seberang Perai.
At last look, its shares were at 46 sen apiece, valuing the entire company at RM194mil.