Hong Seng on track with healthcare, hire purchase diversification - MIDA | Malaysian Investment Development Authority
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Hong Seng on track with healthcare, hire purchase diversification

Hong Seng on track with healthcare, hire purchase diversification

27 Nov 2020

Hong Seng Consolidated Bhd is on track with its diversification into gloves, healthcare and hire purchase business.

The company said the business diversification will provide additional income streams to the group and reduce over-reliance on its existing businesses in advertising and information technology.

This new business direction will also help to improve the group’s financial performance and enhance its prospect.

“The diversification into manufacturing and trading of gloves and other personal protective equipment (PPE) provides an opportunity for the group to venture into the supply of PPE, such as gloves and masks, which is a growing industry with foreseeable sustainable demand given the current healthcare condition that enforces the usage of PPE in a global context,” it said.

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Hong Seng has today issued a circular to seek the approval from its shareholders on December 15, 2020 for the said proposals.

Meanwhile, the group is also seeking shareholder approval for its turnkey agreement, which entails engaging Howellcare Industries Sdn Bhd to plan, design, supply, install and commission the glove production plant, as well as undertake all marketing and sale of the nitrile butadiene rubber gloves for the group for the initial stage.

The contract for the turnkey project is RM59.40 million.

On its healthcare business, its wholly-owned subsidiary, HS Bio Supplies Sdn Bhd (HS Bio) intends to venture into the healthcare-related services through eMedAsia Sdn Bhd via leveraging on the expertise and network of Koperasi Persatuan Perubatan Malaysia Bhd (KOOP MMA).

KOOP MMA is an investment vehicle of the Malaysian Medical Association’s (MMA) members.

MMA is the main representative body for all registered medical practitioners in Malaysia.

HS Bio is also identifying potential business partners in the field of diagnostic laboratory and/or pathology laboratory to support our group’s healthcare-related services.

The funding for the healthcare-related business for providing the supply of medical and healthcare products as well as healthcare-related services in addition to the provision of supply chain management services will be from the proceeds to be raised via the private placement.

“The estimated gross proceeds to be raised from the private placement for the proposed diversification into healthcare-related business is up to RM128.31 million,” Hong Seng said.

Hong Seng has also proposed to venture into the hire purchase business, which it believes is a strategic move to widen its financial services business.

“The proposed diversification into hire purchase business is expected to complement the money lending business of our group” the company said.

Source: NST Posted on : 27 November 2020