KUALA LUMPUR (June 29): Pecca Group Bhd is the latest Bursa Malaysia-listed company to jump on the bandwagon of venturing into producing personal protective equipment (PPE) — such as face masks, face shields and PPE garments — to the commercial and medical sectors.

In a statement today, the car leather upholstery maker said its wholly-owned subsidiary, Pecca Leather Sdn Bhd (PLSB), will repurpose its existing production lines and leverage its in-house talent of craftsmen and facilities to execute the PPE business.

The group has allocated a capital expenditure (capex) of RM2.2 million for the purchase of machinery and set-up of cleanroom facilities for production of face masks.

It plans to commence commercial production in the next one to three months once approvals of the authorities are obtained.

“Given the scale, reach and high contagiousness of the virus, we surmise that the Covid-19 pandemic will be around with us for a long time. With that, we believe demand for PPE will remain high in the new normal environment for the foreseeable future,”  Pecca managing director Datuk Teoh Hwa Cheng said.

“By venturing into the PPE business, we can therefore fulfil the demand gap with quality products at reasonable prices. This also allows us to optimise utilisation of our idle resources and generate additional revenue for the group.

“Furthermore, with a proper set-up and more comprehensive offerings, we will certainly continue donating PPE to the medical community under our corporate social responsibility programme,” he said.

He added that the group had thus far emphasised the medical sector and healthcare workers as its priority, such that its PPE products will be produced in a cleanroom setting. "We want to ensure our products are of high quality and suitable for medical use. As such, we are also applying for the relevant certifications for potential export in the future.”

PLSB is currently in discussion with several healthcare product distributors to market and distribute PPE products to the commercial and healthcare industries.

Still, Pecca’s core business continues to be manufacturing and supply of automotive leather seat upholstery, while the PPE business will be a new revenue stream for the group once commercial production commences.

The capex required for the PPE business will be funded through internal funds. Pecca has a solid balance sheet with zero borrowings, backed by net cash per share of 48.4 sen and net assets per share of 91.2 sen as at end-March 2020.

Shares in Pecca closed 2.5 sen or 2.9% higher at 89.5 sen today, giving it a market capitalisation of RM168 million.