Sanichi Technology Bhd, AT Systematization Bhd and PNE PCB Bhd (PNEPCB) have teamed up with a US company to produce ventilators.
The companies hope to meet global demand of such product, which is expected to increase by RM8.56 billion over the next seven years.
The companies today entered into a Memorandum of Understanding (MoU) with Arzon Solar, LLC (ARZ) to form a joint venture company (JVCo) to design, research and produce of medical grade mechanical air ventilators for local and overseas healthcare markets.
The MoU was signed by Sanichi managing director Datuk Seri Pang Chow Huat, while ATS and PNEPCB were represented by managing director Choong Lee Aun and executive director Kua Khai Loon respectively.
ARZ was represented by its chief executive officer VahanGarboushian.
The parties agreed that the shareholding shall be divided into Sanichi (30 per cent), ATS (30 per cent), PNEPCB (30 per cent) and ARZ (10 per cent).
In a joint statement today, the companies said the MOU enabled the parties to undertake design, development and production, product testing, obtaining the necessary licenses and certificates as well as the distribution and marketing for the product.
The Malaysian companies will be responsible for the production of the product and obtaining the necessary licences and certificates required.
ARZ will distribute and market the product for both domestic and international markets.
The ventilators will be distributed and marketed to niche healthcare industry.
Ventilator is a machine that moves breathable air into and out of the lungs.
It delivers breaths to a patient who is physically unable to breathe, or is breathing insufficiently.
The MoU also provides PNEPCB particularly with an opportunity to expand its foothold in the healthcare business, while leveraging on the favourable outlook of the healthcare industry.
"As the coronavirus crisis accelerates, the board of PNEPCB views this is an appropriate time to capitalise on the increase in demand on the medical ventilators in Malaysia and around the world," it said in an exchange to bourse filing today.
Garboushian said the company had spent a lot of time and effort to research and design ventilators, which were almost ready for production.
"But, time does not permit us to manufacture and market these ventilators alone. Covid-19 pandemic has trust us to work with our Malaysian partners to speed up the customisation of design to meet local compliance of each targeted countries, production and marketing of these ventilators worldwide for the sake of mankind," he said.
Pang said all four parties would invest in a JV company for the production of the final product.
"This is a timely penetration into the niche healthcare industry, considering the global mechanical medical ventilators market is valued about at US$1.05 billion currently and the outbreak of Covid-19 has caused the surge in demand for ventilators.
"Together, we want to ease this worldwide shortage of ventilators to save lives and serve the global community well," he added.
Choong said the global market for mechanical air ventilator is estimated to reach US$3.02 billion by 2027, an increase of almost US$2 billion over the next seven years.
"This pie is super big. Too big for all four of us to fill the order. AT Systematization has the track record in the production of medical devices. Currently, we are a certified contract manufacturer of endoscope and have been producing endoscopy accessories metal parts for medical device manufacturers," he said.
He added that the company would capitalise on its expertise and experience, together with its ISO 13485 medical certification, to pool its comprehensive business experience to keep up with complexity, quality and compliance at once.
Kua said PNEPCB had decades of old experience to manufacture printed circuit boards for customers from Japan, US and Europe.
"Covid-19 has made us work together in this joint venture. We are very optimistic we can bring value to this joint venture which needs companies with great expertise and experiences.
"We believe that our ventilators will be a very innovative international product that will be able to ease the demand of the industry globally," he added.