Asian Property Review talks to Mah Sing’s Founder & Group Managing Director, Tan Sri Dato’ Sri Leong Hoy Kum on its new plans to adapt to the new normal.
In the event an effective Covid-19 vaccine is found, how would this impact Mah Sing’s plans for a glove manufacturing facility?
Our new venture would not be affected as we believe the prospect of glove manufacturing is still promising after the pandemic, underpinned by stricter regulations and the increase in awareness of the importance of hygienic practices.
According to a RHB Investment Bank’s report dated 19 November 2020, a deployment of COVID-19 vaccine could be a new demand source for gloves, possibly up to 18 billion pieces per annum, having assumed that 60% of the world’s population of 7.5 billion people would get the vaccine in two doses annually.
As each contact with a person would lead to the usage of one pair of disposable gloves, a vaccine development will generate demand of 18 billion pieces per annum in the short term, and that the demand will recur on an annual basis if the vaccine protection period is only up to a year. This is equivalent to 6.8% of the 263 billion pieces per annum global gloves demand in 2019. RHB Investment Bank opines that the long-term outlook remains positive.
According to Malaysian Rubber Glove Manufacturers Association (MARGMA), even before the Covid-19 pandemic, the rubber glove industry has also been growing at an average of 8% to 10% for the past 25 years.
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2. It has been said three key issues need to be addressed before a glove manufacturing facility can be operational:
• The availability of contractors to build production lines;
• Shortage of foreign workers; and
• Constraint of nitrile raw material.
Would these pose a challenge to Mah Sing’s plans?
Mah Sing Healthcare has already signed the letter of award to purchase new machineries for 12 production lines in an effort to expedite the set-up process for Phase 1 of Kapar factory. Fabrication works for the new machineries has already started at the equipment supplier’s factory.
Currently, we have commenced piling works to accommodate 12 units of new, high speed glove dipping machines at our Kapar glove manufacturing factory, and installation of the initial lines was to commence in November 2020; and on track to meet our initial targeted production date of April 2021 to meet strong pent-up demand.
As for the human resource, we will be progressively recruiting employees with the relevant glove manufacturing experience. The foreign worker freeze is the main challenge faced by the whole industry, but our new lines will have auto stripping and auto stacking so we can rely on hiring more skilled local workers as well as more engineers and chemists.
To reduce reliance on workers, we will also continuously look at more automation and digitalisation to enable us to work more efficiently.
We have entered into letters of intent with several raw material suppliers for supply of both Nitrile-butadiene rubber and latex raw materials when operation commences.
3. In terms of property, how does Mah Sing plan to overcome the low sales volume due to the MCO (CMCO and EMCO)?
The MCO and CMCO period has generally been challenging for all developers as site progress of all projects was halted during the MCO period and there were also delays in loan approvals for sales conversions. However, we were able to mitigate the impact of COVID-19 and manage our operations through our on-going digitalisation efforts, implementation of cost savings measures and supported by the stimulus packages introduced by the government.
During June and July 2020, we continued to launch 3 new projects and we have 2 new launches lined up in Q4.
4. Are there any areas of Budget 2021 that Mah Sing would like to improve on or change?
We hope that the government can continue to work with financial institutions to relax lending requirements, especially for first time homebuyers. Our proposed incentives for first time home buyers include reinstating maximum loan tenure to 45 years from the current 35 years; higher margin of financing up to 95% for first property, higher debt service ratio; and using gross income rather than net income in loan applications review. We also hope the government will reconsider the DIBS scheme again in the future.
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