PACKAGING solution provider and automatic labeling machine manufacturer Komarkcorp Bhd plans to raise RM23.07 million via a private placement to expand its face mask manufacturing business.
The group announced recently, it would be issuing 96.22 million new shares or 20 per cent of its existing share base to independent third party investors.
Based on its illustrative issue price of 24 sen apiece, the group would be raising RM23.07 million, of which RM22.24 million would be deployed for the expansion of its face mask manufacturing business and the rest to defray the expenses associated with the private placement.
Komarkcorp noted that it has installed and is currently operating six production lines for three-ply face masks and one production line for KN96 face masks.
It has placed orders and is in the midst of finalising the purchase of machinery for an additional 19 production lines for three-ply face masks and four production lines for KN95 face mask – which are expected to be installed and operational by the second quarter of the year.
The company remarked that its face mask manufacturing operations are currently housed at its existing factory cum headquarters in Balakong, which has a built-up area of 150,000 sq ft. Of this area, 50,000 sq ft has been allocated for the manufacture of face masks.
“To house a total of 115 production lines, the group will need to acquire another factory building. To this end, the group intends to acquire a new factory building with a built-up area of approximately 80,000 sq ft, at a targeted price of RM20 million.
“A factory of this size is estimated to be able to house up to 80 face masks production lines, thus catering for any potential future expansion of the face masks business. At this juncture, the group is looking to acquire a factory close to its Balakong factory to centralise its supply chain as much as possible,” it said.