KUALA LUMPUR: Property group Mah Sing Group Bhd has proposed to diversify its core businesses to include the manufacturing and trading of gloves and related healthcare products.
In its statement to Bursa Malaysia on Thursday, it said its indirect unit Mah Sing Healthcare Sdn Bhd (MSHB) will buy 12 new gloves production lines which can produce up to 3.68 billion pieces of gloves a year.
It said glove production would be carried out in Klang where the MSHB had entered into a tenancy agreement with Minho Kilning (Klang) Sdn Bhd to occupy a warehouse in Kawasan Perindustrian Ladang Sungai Puloh.
Mah Sing said the diversification was to enhance the group’s medium-term financial performance by tapping into the global market to reduce the over reliance on the domestic market for its property business in view of the cyclical nature of the property sector.
“The group anticipates that the proposed diversification can help to mitigate potential downside risk of the group arising from the wide-ranging effects of the coronavirus disease (Covid-19) to the local and global economy,” it said.
It also said the group has over 40 years of experience in the manufacturing of plastic moulded products which had contributed to a steady stream of income over the years to the group.
Mah Sing added there are potential synergies to be derived among the gloves business, plastic business and property business.
“The gloves business can leverage on the existing processes from the plastic business such as the raw materials procurement, quality control, research and development, logistics and supply chain planning and from the property business, reliance can be placed on the strength of the branding and marketing, business development, project planning and human resource divisions, ” it said.
Mah Sing said once it has received shareholders’ approval for the diversification, additional funding would be required for the operation of its gloves business.
“Such financial commitment is expected to be funded via internally generated funds (including those to be generated from the initial operations of the gloves business), bank borrowings, the proposed issuance of up to RM100mil nominal value of seven-year redeemable convertible sukuk Murabahah announced on Sept 24 and/or other fund raising exercises to be undertaken in the future, ” it said.