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The Star – LKL To Boost R&D To Cater To Industry Demands

Crucial segment: Healthcare workers carry out swab tests in Penang. The government is
committed to improving the sector, which augurs well for players like LKL.

PETALING JAYA: LKL International Bhd, a manufacturer of medical and healthcare
beds, is geared up to improve Malaysia’s low bed-to-total population ratio (BPR) to
international standards.
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.

February 3, 2022

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