LKL to boost R&D to cater to industry demands
03 Feb 2022
According to the Malaysian Investment Development Authority (Mida), the country’s hospital BPR stood at 1.98 beds per thousand residents in 2019 compared to the average BPR of 4.7 for the Organisation for Economic Cooperation and Development member countries in 2017.
In its annual report 2021, LKL executive director Datuk Chong Loong Men said the data revealed by Mida showed there was significant room for more hospital beds in Malaysia, given that the country’s BPR rate only grew by 1.1% per year from 2014 to 2019.
With the increase in demand for hospital beds, he believes that the private healthcare sector is set to capitalise on the low BPR through capacity expansion as local BPR is forecast to grow to 2.05 beds per a thousand residents in 2021.
“With LKL International having 28 years of experience in the manufacturing of medical and healthcare beds, we are prepared to help the nation on its journey to improve Malaysia’s BPR to be comparable with international standards,” Chong said.
The government is looking to construct new hospitals nationwide, establish rural clinics in Sabah and Sarawak as well as increase the capacity of public health service facilities, including the purchase of medication, consumables, personal protective equipment or PPE and health kits.
In Budget 2022, the government has allocated RM32.4bil for the healthcare sector, reaffirming its commitment to improving the country’s healthcare system.
However, a key challenge LKL faces is the higher cost of production from the rising cost of steel as well as the higher cost of labour, as fewer workers are available amid the Covid-19 pandemic.
The shutting of steel production facilities, coupled with the disruption of steel imports during the pandemic has resulted in the increased cost of steel, which is one of the key raw materials used in the manufacturing of hospital beds, noted Chong.
To address this challenge, he said the group would focus on improving operational efficiency in the manufacturing processes as well as investments in machinery to encourage greater automation, which would reduce its dependence on manual labour.
To remain competitive, the group would customise its manufactured products and also commit to research and development to cater to the demands of the industry.
Chong disclosed that LKL faced competition from the industry players and new players that were eyeing to profit from the increasing demand for medical equipment and other medical accessories during the pandemic. Having said that, he reckoned that the increase in competition could adversely affect the group’s future profitability.
As countries were forced to close their borders amid the pandemic, Chong also pointed out that Covid-19 had also affected LKL’s exports to countries such as the Middle East and Central America.
As such, he explained the group would continue its international marketing efforts to market its products that were internationally certified and meet customised requirements.
“This is the strength we rely on, while we continue making efforts and building upon these endeavours once international borders reopen,” said Chong.
Source: The Star