PETALING JAYA: Mask manufacturers are continuing to invest in the business even with the product slowly being formally phased out of daily lives, as the “mask culture” is here to stay, they say.
While acknowledging that there may be a “minor” impact on demand, they say generally, demand will remain steady in the long run.
Iconic Worldwide Bhd group executive director James Tan noted that although wearing face masks outdoors was now optional, it was still encouraged, especially for high-risk individuals and those unvaccinated.
“In addition, the mask mandate remains in place for indoor settings.
“Therefore, we do not foresee a material impact on our face mask business,” Tan told StarBiz.
He said the Penang-based company, which currently derives some 50% of its profits from mask sales, was still at a “growing stage” and expects revenue from its mask business to climb steadily as the market recognises its brand and quality of its products.
“We have good feedback from our customers and most of them return for more and also recommend our masks to their family and friends,” Tan said.
Notably, Iconic, which is also involved in the property and hotel businesses, has invested approximately RM10mil in mask machines and supporting facilities equipment so far, and has since recouped all of its capital investment.
According to Tan, the group will continue to upgrade its machines and tools for more efficiency.
Likewise, another mask manufacturer Pecca Group Bhd also says the wearing of masks will continue to provide individuals with a sense of protection and help to reduce community infections of respiratory diseases.
“Therefore, we will continue to serve this need with our medical-grade and fashionably-styled products,” executive director Kelly Teoh said.
“We believe that the ‘face mask culture’ is here to stay, due to new hygienic standards that we have to adhere to even after the pandemic,” she told StarBiz.
Mask manufacturing currently makes up about 10% to 30% of Pecca’s total profits.
The company is also involved in the manufacture of automotive leather seat interior.
Pecca, according to Teoh, has invested about RM6mil to RM8mil in its face mask business, expanding its production capacity up to the current seven production lines with an output of up to 30 million units of face masks a month.
This capital investment has been recouped and the company will be reinvesting to further improve its range of product offerings, Teoh said.
“As Malaysians return to their normal lives for work and leisure in indoor settings, the face mask remains ever more important for our health and safety.
“A high-quality face mask is the last defence shield for all diseases, not just Covid-19,” she added.
On profit margins, Teoh said in the past, the company “definitely did feel the pressure to cater to the mass market, thus developing more affordable or lower-range products”.
“However, we realised that the majority of our Malaysian consumers value high-quality face masks and there is a consistent strong demand for it.
“Moving forward we intend to continue developing higher-value and more advanced respirator type-masks to maintain or even increase our margins,” Teoh said.
Also commenting on margins, Iconic’s Tan said as the company grew its face mask business, it managed to reduce its operation cost through mass production.
“We started with two machines and now we have more than 20 machines and there is economies of scale.
“We also have better bargaining power now with our raw material suppliers.
“Another cost-saving exercise we undertake is constantly upgrading our machines. By doing so, we are able to speed up production and also reduce the rejection rates.
“With all these sustainability measures, we are able to comfortably reduce our selling prices while maintaining our profit margin,” he said.
Tan reckoned that up to 40% to 50% of Malaysians will still continue to wear masks even if the government announces further relaxation policies on the matter.
“We are here for the long term and we have built a brand for the Malaysian market where Malaysians are now able to have access to a safe and reliable product without relying on China products.
“We don’t know if or when the virus will evolve, in the future. It is better to be prepared.”