KUALA LUMPUR: Iconic Worldwide Bhd (IWB) has started the development of a pipeline of new personal care products under the Iconic Medicare brand, along with new glove products, to capitalise on a projected revival in consumption, travel and industrial activities post-Covid era.
"We continue to bet on long-term glove demand, which has historically risen in tandem with increased public awareness of personal hygiene and the dangers of infectious diseases, particularly in emerging markets," IWB chairman Datuk Seri Tan Kean Tet said in a statement.
"As economies re-open and day-to-day activities increase, demand for Iconic Medicare products will accelerate.
"With the expansion of our glove product range and our new personal protective equipment (PPE) product pipeline, the company will leverage our established brand presence and manufacturing capabilities to capture this market opportunity," he said.
Iconic Medicare products include a range of nitrile and latex gloves and disposable face masks.
"We believe face masks will continue to be a key source of revenue for the company, as the Iconic Medicare brand is already established with a recognisable presence in the market," Tan said.
"Demand for face masks has been sustained in the post-Covid era. Consumers are now well aware of the importance of wearing face masks. As a result, it has become the 'new normal' for people to wear face masks in public areas," he said.
Expanding on IWB's outlook on the glove manufacturing industry, Tan said it is well known that it has entered a consolidation phase.
"In the coming quarters, we expect this to lead to an easing of market oversupply. As a result, glove ASPs (average selling prices), which had been declining until early 2023, are stabilising.
"At this rate, ASPs are trending towards pre-pandemic levels, which implies glove demand is on a recovery path," Tan said.
He said IWB had significantly invested in automation technology for its glove dipping lines.
This will boost the sustainability of the company's glove production activities while lowering manufacturing costs and driving IWB's competitive edge as the market recovers.
On the property front, IWB is developing a new commercial and affordable housing project in Alma, Penang.
This project involves the development of 751 units of affordable housing and 16 units of commercial shop lots, with an estimated gross development value (GDV) of RM255 million.
This project builds on the success of Iconic Point, Iconic Worldwide's recently launched commercial development, and will further diversify the company's real estate portfolio.
For the financial year ending March 31, 2023 (FY23), IWB posted a net loss of RM24.33 million after writing down the value of its glove inventories.
The impairment, made during the fourth quarter (Q4), represented a one-off adjustment amounting to approximately RM17 million.
The adjustment was made to account for differences between the initial cost of producing the gloves and masks in its inventories and the realisable value of those inventories.
While the adjustment impacted the value of both inventories, it was more significant when it came to IWB's glove inventory.
The initial cost of IWB's glove inventories was higher to account for cost components, including the cost of starting the new factory and other operatng expenses needed to bring new products to market.
"We remain optimistic about the underlying fundamentals of the glove manufacturing industry. However, this strategic, one-off adjustment will enable IWB to shift its focus towards seizing new business growth opportunities.
"It is not reflective of our belief in the glove industry's positive outlook, and, as we pointed out earlier, we remain excited about its future growth potential.
"In addition, we expect the normalisation of raw materials costs to enable the glove manufacturing business to be profitable in the near future," Tan said.