[ad_1]
KUALA LUMPUR (Oct 15): Real estate developer Mah Sing Group Bhd today announced its proposal to diversify into the manufacture and marketing of gloves and healthcare related products to take advantage of the long-term favorable prospects for the healthcare industry. gloves and the additional demand created by the Covid-19 pandemic.
In a statement to Bursa Malaysia today, Mah Sing said that the diversification will also provide the group with access to the global market, thereby reducing over-reliance on the domestic market for its real estate business, which is cyclical in nature.
“The group anticipates that the proposed diversification may help mitigate the potential downside risk to the group arising from the wide-ranging effects of the Covid-19 pandemic on local and global economies,” Mah Sing said.
“As the group’s contribution from the proposed diversification is expected to be 25% or more of the group’s net profit going forward, the proposed diversification will provide an additional income stream to the group rather than relying on its core business. current, namely the real estate business, which is part of the group’s business plans to further improve the group’s financial performance.
“Despite the proposed diversification, the company will continue the group’s existing business activities,” said Mah Sing, who also manufactures plastic products.
Mah Sing said its indirect subsidiary Mah Sing Healthcare Sdn Bhd (MSHSB) will acquire 12 new glove production lines that are expected to produce an estimated production capacity of up to 3.68 billion pieces of gloves per year.
According to Mah Sing, MSHSB signed a lease with owner Minho Kilning (Klang) Sdn Bhd last Thursday for MSHSB to occupy part of a piece of land, which measures approximately 313,548 square feet, with a single-story warehouse and office of two plants, within the Ladang Sungai Puloh industrial zone along Jalan Kapar in Klang, Selangor.
“The signing of the lease allows Mah Sing to start its glove business as the glove assets will be installed, installed and commissioned on the property,” said Mah Sing.
Mah Sing said that the company will seek approval for diversification from its shareholders at an extraordinary general meeting (EGM) to be convened based on Bursa’s listing requirements, as the diversification contribution is expected to be 25%. or more than Mah Sing’s net profit.
“Subject to all relevant approvals being obtained, the proposed diversification is expected to be completed by the fourth quarter of 2020,” said Mah Sing.
Hong Leong Investment Bank Bhd has been appointed lead advisor for the diversification of Mah Sing.
At a virtual press conference today in conjunction with Mah Sing’s announcement of the planned diversification, company officials indicated that the glove manufacturing company is expected, for now, to comprise two phases, resulting in MSHSB have 24 glove production lines with a total annual capacity of about 7.36 billion pieces of gloves.
They said that after the initial 12 glove production lines, the second phase can accommodate another 12 lines and increase capacity by another 3.68 billion gloves a year. Gloves produced by MSHSB will mainly be exported to countries such as the United States and Europe, according to officials.
“In light of the promising global prospects and the vibrant nature of the glove business, we are committed to being a long-term player and delivering greater value to our shareholders, as well as striving to be one of the largest glove manufacturers. of the industry in the future. We may even explore specialty gloves in the future, “said Mah Sing Group Managing Director and Chief Executive Officer Tan Sri Leong Hoy Kum.
“Based on our 40 years of being in plastic [product] manufacturing business, we believe we can enter it (in glove manufacturing). Our response period is also very fast, ”Leong said.
Mah Sing CEO Datuk Steven Ng Poh Seng said the group had allocated RM150 million as capex for the first phase of the glove manufacturing business.
Ng said that the group’s glove business will be financed with internally generated funds.
On the Bursa break at 12.30pm today, Mah Sing closed two sen or 2.76% at 74.5 sen, with a market value of around RM 1.81 billion. The stock saw some 19 million shares traded.
Read also:
Mah Sing says explore the manufacturing division list
[ad_2]
