LEADING Malaysian automotive leather upholstery supplier Pecca Group Bhd is forking out a further RM5 mil in capital expenditure to expand its healthcare segment on the back of increasing market demand for advanced face mask models.
The expansion – to be undertaken by wholly-owned subsidiary Pecca Leather Sdn Bhd – involves the purchase of five new face mask production lines amounting to RM3 mil while the balance RM2 mil is set aside for building renovation.
The expansion is expected to be completed in the third quarter of 2021.
“As the COVID-19 pandemic increases in severity in Malaysia, the expansion will help us better serve the increasing demand for our high-quality face masks among the medical, corporate, and retail segments,” commented Pecca Group’s group managing director Datuk Kelvin Teoh Hwa Cheng.
“Our initial three-ply and four-ply face masks offerings which are made to international standards have been well-received by the market.”
Through is latest expansion, Pecca Group aims to introduce a greater variety of advanced face masks models such as KF94, KN95, and N95 duckbill as well as launch more premium and fashionable face mask offerings to cater to all lifestyle needs.
“We foresee our healthcare segment to grow into a sizable contributor to the group in the long run as we move towards a dual-core business model driven by both the automotive leather and healthcare segments,” projected Teoh.
The group’s healthcare segment currently has seven face masks production lines, mainly catering to three-ply and four-ply face masks.
The segment contributed in increasing measure to the group’s revenue since its commencement in August 2020 – RM4.8 mil or 12.3% of group revenue in 2Q FY6/2021 and RM5.9 mil or 13.8% for 3Q FY6/2021.
Registered with the US Food and Drug Administration (FDA) and certified to comply with the European Union’s CE marking requirements, Pecca Leather enables Pecca Group to export its face masks to Asia, Europe and the US.
Moreover, the group’s facility is registered with the Medical Device Authority Malaysia and is certified to meet ISO 13485:2016 Quality Management System requirements for the design, development and manufacturing of personal protective equipment (PPE) including three-ply and N95 masks for surgical/medical and general use.
The expansion plan will be funded entirely by internally generated funds.
At the close of this morning’s session, Pecca Group was up 12 sen or 2.7% to RM4.56 with 813,000 shares traded, thus valuing the company at RM857 mil. – June 8, 2021
