Face masks still profitable despite tighter margins, says SCGM

By Emmanuel Samarathisa

WHILE some manufacturers of face masks have complained that the ceiling price of the product is too low, plastic packaging specialist SCGM Bhd believes the group can still rake in a profit despite relatively low margins.

SCGM managing director Datuk Seri Lee Hock Chai told FocusM that despite the ceiling price, the group has forecasted the venture to be “profitable” even with lower margins compared to other products.

“We started by producing face shields since February 2020 by purchasing three ultrasonic sealing machinery and repurposing one of our production lines. The current daily production capacity for the new medical face shields is 21,000 units.

“In anticipation of higher demand for medical face shields, SCGM will purchase an additional two ultrasonic sealing machines and also a face mask production machine that should arrive this month,” Lee said.

The group’s “swift shift”, he added, was a “testament to our versatile manufacturing expertise as well as our deep-rooted network of supplying medical equipment.”

SCGM, which makes thermoform food packaging products, ventured into protective face shields after receiving orders from hospitals locally as well as in Singapore. The group had been able to make the shift due to its ample stock of polyethylene terephthalate, the raw material used for face shields.

SCGM currently supplies private pharmacies and hospitals throughout the nation. Recently, the group has received inquiries from government hospitals.

SCGM’s foray into face masks comes at a time when other peers, such as private entity Ideal Healthcare Sdn Bhd, have threatened to quit producing due to the government’s lowering of the ceiling price to RM1.50 from RM2.

Ideal Healthcare CEO Haminnuddin Hamid told news portal Free Malaysia Today (FMT) that local manufacturers were disadvantaged because of higher import duties and costs for raw materials compared to finished products.

Haminnuddin told FMT that his company will cease its production of face masks once it has used up all its available materials.

“This is simply because it is difficult to get raw materials from overseas as the price keeps increasing,” he said.

Meanwhile, SCGM’s Lee also said the group did not condone the practice of panic buying for its range of medical equipment, from face shields to kidney trays.

“Our strict adherence to fixed price policy is to ensure our medical front liners receive the essential tools in combating the Covid-19 pandemic,” he said.

SCGM’s share price closed 7.52% lower at RM1.23 on April 1. – April 1, 2020

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