KUALA LUMPUR (June 16): Komarkcorp Bhd, a packaging machinery and self -adhesive label maker, is investing up to RM20 million to venture into the manufacturing of face masks.

In a statement today, the group said the money will be raised via a private placement of up to 30% of its issued shares, as well as internally-generated funds and bank borrowings.

The funds, it said, will be used on 30 production lines for the manufacturing of face masks, particularly KN95 and three-ply, with annual production capacity of up 120 million and 522 million pieces respectively within 24 months.

“In conjunction with this, the group had on June 15 incorporated a wholly-owned subsidiary, namely Komark Mask (M) Sdn Bhd, to undertake this new business,” it said in the statement filed with Bursa Malaysia.

Komarkcorp said there has been a prevalent shortage of disposable face masks since the global outbreak of the Covid-19 pandemic in January, which saw global stockpiles and supply chains of the items being outstripped by the overwhelming demand.

“The group is looking to leverage on its existing expertise in the manufacturing sector of close to 40 years and embark on the manufacturing of face masks, after identifying an attractive business opportunity in exporting face masks to countries with high Covid-19 infection rates.

“Based on the group’s initial estimates, the new venture is expected to enjoy attractive profitability margins with a relatively short payback period from commencement of full operations,” it added.

As a start, Komarkcorp said it intends to set up six production lines within four months to produce some 104.4 million three-ply surgical masks and 24 million KN95 face masks in a year. The remaining 24 production lines will be set up gradually over the course of 24 months.

“This new production centre will be constructed to be a cleanroom with anti-static floor, as well as controls for temperature and humidity. The cleanroom will also be subject to audit by and registration with the Ministry of Health and the relevant certifications will be obtained from the Medical Device Authority Malaysia and Good Manufacturing Practice,” it said.

Going forward, Komarkcorp said it expects the global demand for face masks to sustain based on a few factors including the fact that the wearing of face masks in public places has been made mandatory in over 50 countries.