“Pecca Leather will repurpose some of its existing production lines and leverage on its present pool of craftsmen as well as production facilities to pursue the PPE business. The company has allocated RM2.2 million in capital expenditure for the purchase of machineries and the setup of cleanroom facilities for the production of face masks,“ Pecca said in a stock exchange filing today.
Pecca Leather is in the midst of applying for the approvals and certifications from all the relevant authorities for the production of the PPE. Subject to the approvals being obtained from all the relevant authorities, the production is expected to commence within the first quarter of financial year ending June 30, 2021.
Pecca Leather is currently in discussion with several key distributors to market and distribute its PPE products to their clientele in the commercial and healthcare industry.
“The company is of the view that the market demand for PPE will continue to be well above normal for the foreseeable future post-Covid-19 new normal. Furthermore, repurposing existing production lines is part of Pecca Leather’s plans to fully utilise its present idle resources and to generate additional revenues,“ it said.
In addition, the PPE business is part of the company’s corporate social responsibility program to join the combat against the Covid-19 pandemic in Malaysia by supporting and equipping the frontline healthcare personnel with the crucial protective equipment.
On the potential risks related to the PPE business, it said Pecca Leather has, throughout the years, established its track record and expertise in undertaking the manufacture of high-quality industrial products and as such, believes that Pecca Leather is able to mitigate these risks.
Subject to the approvals being obtained from all the relevant authorities, the PPE business is expected to contribute positively to the earnings and will enhance net assets per share of Pecca and its group of companies for the financial year ending June 30, 2021. The PPE business will be funded through internally generated funds.
The company will continue its focus on its core business of manufacturing and supplying high quality automotive leather seat upholstery.
Source: The Sun Daily