WITH over 30 years of experience in manufacturing textile and apparel for international customers, Catalist-listed KTMG is now looking to develop its own product line.

 

The company, with manufacturing facilities in Malaysia and Cambodia, on Monday announced the launch of its business-to-consumer brand XCF, as it expands its manufacturing to personal protective equipment (PPE).

 

Chief executive officer Damien Lim told The Business Times that it is time for the group to dip its toes into the consumer market.

 

" We want to utilise our experience in textile and apparel manufacturing to move downstream. We see this as a good opportunity because we already have the expertise and the manufacturing know-how," he said.

 

XCF, named after the company' s stock code on the Singapore Exchange, was launched following the group' s entry into the production of PPE in April in a bid to help combat the spread of the virus.

 

KTMG had recently fulfilled a contract from the Malaysian authorities to manufacture disposable isolation gowns for the country' s frontline healthcare personnel. It will continue its efforts to support the PPE supply market, the group said.

 

XCF' s flagship product is the Max Filtration Face Mask priced at S$18 on its e-commerce site. The brand will expand its product offerings to include activewear and lifestyle apparel by next year, said Mr Lim.

 

The launch of its e-commerce business also comes amid the growing importance of going digital. KTMG' s customers in the United States, Europe, United Kingdom and Canada saw business take a hit when retail stores were ordered to shut at the height of pandemic. But those who have gone digital were able to cushion some of the impact, said Mr Lim, citing that some customers generate 60 to 70 per cent of sales online.

 

For traditional customers, on the other hand, e-commerce only accounted for about 10 to 15 per cent of sales. " Before this (Covid-19) happened, no one would have predicted there would be a day where everyone will have to shut down stores and not go to the shopping mall," he said.

 

But with the ongoing pandemic, e-commerce had been pushed into the mainstream with more businesses ramping up efforts to improve their digital infrastructure.

 

Mr Lim is expecting more of KTMG' s customers to start focusing on their online business as well.

 

For the six months ended June 30, 2020, KTMG' s net profit fell to around S$200,000 compared with S$300,000 a year go after excluding the one-off, non-cash acquisition and transactions costs arising from the reverse takeover of S$2.5 million.

 

KTMG was formed following the completion of a reverse takeover by Lereno Bio-Chem of Knit Textile and Apparel in 2019.

 

Revenue fell 30.4 per cent to S$25 million due to the movement control order imposed by the Malaysian Government in March, which disrupted the group' s production capabilities.

 

While the pandemic had inevitably hurt the business, Mr Lim said that there is still plenty of opportunities for the group to grow.

 

For one, brewing and persistent tension between the US and China will benefit KTMG. The company had received more enquiries from retailers looking to shift their manufacturing output from China, said Mr Lim.

 

Meanwhile, sustainability in fashion is gaining traction as businesses and consumers start to recognise the environmental impact of fast fashion. Part of KTMG' s efforts include using sustainable cotton at its factories as well as being part of non-profit organisation Better Cotton Initiative.