DESPITE being a new entrant in Malaysia’s overcrowded personal protective equipment (PPE) playground, Komarkcorp Bhd has found an ideal strategy to develop its own niche as an original equipment manufacturer (OEM) of face masks.
Beyond being an OEM of face masks, the company which was once synonymous with the manufacturing of self-adhesive labels and stickers is focusing on churning out fashionable face masks which are not subject to government-set ceiling prices unlike similar medical grade products.
The reported rise in revenues quarter-on-quarter (qoq) speaks volumes on the development of this niche market.
Various social media channels have indicated that Komarkcorp now is the preferred OEM partner of choice for top selling mask brands like Jovian Essentials, Formula Health and the D’Coeur brand due to the high quality materials, individual packaging, food grade ink printed designs and the fact that it is all 100% locally made.
Executive director Roy Ho Yew Kee was tight-lipped when asked on the identity of the company’s main clients, but the scores of cartons being loaded onto trucks on a daily basis is testament to the growing momentum of Komarkcorp’s turnaround process.
Komarkcorp is currently running 30 production lines at its Balakong plant which is able to produce 360 million pieces of face mask per annum at maximum capacity.
Following a surge of demand, plans are afoot for the group to deploy up to 128 production lines with 102 production lines for three-ply face mask and 26 lines for respiratory face mask by 2023.
“This expansion plan will give us an annual maximum capacity of 1.22 billion units of three-ply face masks and 312 million units of respiratory face masks,” projected Ho. “We do harbour an ambition to be Southeast Asia’s largest face mask manufacturer.”
To achieve such targets, Komarkcorp is in the midst of completing a second plant in Meru, Klang which boasts a built-up area of 80,000 sq ft (slated to commence operation by end 2021) as well as to re-locate its Johor’s factory to potentially cater for exports to Singapore.
The company also plans to raise up to RM65.4 mil from a rights issue exercise based on the illustrative price of 8 sen per rights shares to fund its expansion plan and to fulfil the group’s ambition to be one of the largest face mask manufacturers in Southeast Asia.
Moving forward, Ho expects the production of face masks to supercede its legacy labelling business by a ratio of 70:30 looking at the trend of the quarterly numbers.
“Despite the new business taking on bigger responsibility for the group, the flow on effect has also impacted the legacy printing business positively. Designer and fashion masks require food-grade ink to be non-toxic as opposed to imported prints from unverifiable sources,” envisages Ho.
With its OEM fashion focused face mask production running at full speed – and with an expansion plan intact – Ho expects Komarkcorp to return to the black effective 2Q FY4/2022.
“A turnaround can be anticipated, judging from our OEM order book that has not stopped increasing since the lifting of the full movement control order FMCO in end-August,” reckoned Ho.
“Contrary to general consensus, the mask donning trend is not solely predicated to the Covid-19 pandemic. Historically, we have witnessed post pandemic situations like SARS in 2003 where civilians continued to don masks as a matter of habit and hygiene.”
Add to the recent adoption of the actual face masks by the public as a form of a fashion accessory, Ho expects demand to stay strong for a while.
“Also, we are entering an intensive six-month festive season where there will be a surge of demand for fashionable face masks. The factory will be busy for the foreseeable future.”
For the record, Komarkcorp saw its net loss widened to RM2.65 mil in its 1Q FY4/2022 ended July 31, 2021 (1Q FY4/2021: RM1.57 mil) despite its revenue having surged 54% to RM13.41 mil during the period (1Q FY4/2021: RM8.68 mil), which mostly attributes to write offs of inventory in the Thailand silo.
At 11.24am, Komarkcorp was down 1 sen or 10% to 9 sen with 136,200 shares traded, thus valuing the company at RM52 mil. – Nov 22, 2021
