PPK Group (ASX: PPK) has a lot of balls in the air. Like, A LOT.
From mining to ballistic armour, lithium batteries and now face masks…(?)
Yep, their foray into the COVID boosted medical supply market has paid off, with the Therapeutic Goods Administration (TGA) approving their antiviral, antibacterial face masks for use in Australia.
The face masks are fancier than your stock standard blue disposable, integrating an ultra thin nano-scale coating of 99.95% pure copper onto the mask’s surface, enhancing its antimicrobial properties. The coating is called Copatac and is a patent-pending technology being commercialised by Survivon, a joint venture with PPK.
PPK owns just over 47% of Survivon having invested $4.5 million and funding the building of a mask manufacturing facility last year. Survivon has a distribution agreement with Swiss company HEIQ Materials AG. PPK’s strategic investment in Survivon was “a great opportunity to commercialise a new technology that is in such high demand and has so many uses beyond manufacturing of masks.” Executive Chairman of PPK, Robin Levinson “expect[s] this business to continue to grow in the short term as governments, specific industries and employees seek to protect themselves using Survivon’s products.”
Despite the mask hype seemingly cooling off, they remain vital in healthcare settings. In 2017–18, 39.9% of Australia’s health expenditure was spent on hospitals, with a further 34.2% spent in primary care settings. This has only increased with the pandemic, with a sizable portion of this is towards personal protective equipment. State governments are still vying for medical supplies, with the NSW government spending a staggering $150 million on a recent face mask order (which didn’t meet regulations so had to be thrown away…). Similarly, the Victorian government splurged $172 million on PPE not fit for purpose in 2021. Survivon’s Aussie made, high quality face masks seem an obvious choice after these blunders, and might even save taxpayers some money.
PPK may be slightly late to the face mask party though. According to Grandview Research, the global protective face mask market is expected to decline at a rate of -27.6% during the 2022-2030 period, a sharp fall from the USD $38.9 billion valuation estimated in 2021.
Market forecasts aside, Levinson is optimistic, commenting: “I believe that commercialisation of Survivon’s technology continues to represent a great opportunity for PPK. High quality, Australian-made face masks remain in demand, particularly while public health measures remain in effect both here and overseas. However, given the efficacy of this technology, I see it as having a much broader application in the PPE area in the future.”
For the half year ended 31 December 2021 PPK reported a cash balance of $2.8 million, with controlling interests in multiple assets, some of which are highly liquid.