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KUALA LUMPUR: Mah Sing Group Bhd real estate group
has proposed to diversify its core businesses to include the manufacture and marketing of gloves and related sanitary products.
In his statement to Bursa Malaysia on Thursday, he said that his indirect unit Mah Sing Healthcare Sdn Bhd (MSHB) will purchase 12 new glove production lines that can produce up to 3.68 billion pieces of gloves per year.
He said glove production would take place in Klang, where MSHB had signed a lease with Minho Kilning (Klang) Sdn Bhd to occupy a warehouse in Kawasan Perindustrian Ladang Sungai Puloh.
Mah Sing said the diversification was to improve the group’s medium-term financial performance by leveraging the global market to reduce excessive dependence on the domestic market for its real estate business in view of the cyclical nature of the real estate sector.
“The group anticipates that the proposed diversification may help mitigate the group’s potential downside risk arising from the wide-ranging effects of the coronavirus disease (Covid-19) on the local and global economy,” he said.
He also said that the group has more than 40 years of experience in manufacturing plastic molded products, which has contributed to a steady stream of income for the group over the years.
Mah Sing added that potential synergies can be derived between the glove business, the plastics business and the real estate business.
“The glove business can leverage existing plastics business processes such as raw material procurement, quality control, research and development, logistics and supply chain planning, and from the real estate business , you can rely on the strength of the brand and marketing, business development, project planning and human resources divisions, ”he said.
Mah Sing said that once it has received shareholder approval for diversification, additional funds will be required to run its glove business.
“This financial commitment is expected to be financed through internally generated funds (including those generated from the initial operations of the glove business), bank loans, the proposed issuance of up to RM100 thousand face value of convertible sukuk convertible to seven years, Murabahah announced on September 24 and / or other fundraising exercises to be held in the future, “he said.
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