EPG turns to healthcare market after sales drop

EPG turns to healthcare market after sales drop

SET-listed Eastern Polymer Group (EPG), Thailand's top plastic moulder by capacity, is considering a move into the lucrative healthcare plastics market after suffering sales drops in its automotive products and insulation materials in air conditioners because of the pandemic.

Chalieo Vitoorapakorn, EPG's deputy chief executive, said the company is conducting a feasibility study to find viable products in the sector to move into commercial production in coming years. The study is expected to be completed by year-end.

He said the new business unit will require only a small capital expenditure because most of EPG's existing plastic moulding machines can be modified to accommodate the new production lines.

EPG operates three core businesses: plastics for auto parts under the Aeroklass brand; plastics for thermal insulation for air conditioners under the Aeroflex brand; and plastic packaging under the EPP brand.

All three businesses have suffered drops in sales due to the pandemic and government lockdown, which has hit the auto and insulation product sectors particularly hard.

Mr Chalieo said EPG already modified some production lines to produce in demand items for the pandemic like face shields, surgical masks and hand sanitisers.

Originally the products were produced as charity, but because of the sustained global efforts to fight the virus, the company will produce a commercial multipurpose face shield under the Aeroklas brand.

EPG has already donated almost 200,000 sets of the protective equipment in Thailand. The second and third models of the face shield are in the R&D phase.

Mr Chalieo demonstrates EPG's new face mask and face shield products.

"We believe people working in the food sector will continue to wear face masks as conditions normalise following the pandemic because people will still be concerned about the possibility of future outbreaks," Mr Chalieo said.

He said once the new face mask models reach the same quality of protection against the virus as an N95 face mask, the masks could be sold at a retail price of 100 baht per mask in Thailand and US$15 or about 500 baht in the US.

EPG estimates revenue for the next fiscal year 2020/21 (from April 1, 2020 to March 31, 2021) will drop 12% to 9 billion baht, compared with the fiscal 2019/20 revenue of 10.2 billion baht due to the economic recession and the effects on related industries in its supply chains.

EPG is still maintaining targeted growth of high gross profit margin per revenue of 28-30%. Revenue and profits from new businesses will be calculated in the ongoing feasibility study.

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