How Much Will It Cost For You To Start A Small Cosmetic GMP Factory In Malaysia (With KKM Approval for product notification)

This is a long overdue post. more like a year overdue. 

For those who don't know; hi my name is Nisha, im a pharmacist by profession and ive been one of the co founder of SoapLab since 2013. 

We generally supply raw materials and teach people how to make handmade cosmetics that are specifically for troubled skin and sensitive skin.

During covid we had ventured into manufacturing; mainly for our handmade clients who are also small business owners whereby they needed their products to be notified with KKM whenever they want to expand their business.

During that time; my idea was to create an Airbnb like concept for GMP factory so that they could come and make their products in the factory; Soapworks (our sister manufacturing company). 

For that reason we had taken the space in Subang Jaya (rental was higher but at least it's 'easier' for people to come since it was in Klang Valley).

However; that whole Airbnb plan didn't workout; and so we just decided to continue manufacturing for whoever who needed it. 

Unfortunately though; just when we moved in, flood happened and 4 years later; the maintenance from that was too high for us to bare (especially since manufacturing isn't our main 'business' revenue). 

Every month there was some issues like longkang sumbat causing water back flow into our clean room, electrical problems etc.

Anyways; we had to make the hard decision and we decided to relocate.

long story short; I decided to relocate it to my hometown as 'rental' was lower; and its a smaller place. 

By now we already knew what manufacturing will look like and personally; running a factory is not my cup of tea; but we still have OEM clients and so we just needed a place to service them.

So we started moving end of 2024 and here's the cost of setting up a small; 700sqft GMP facility.

Planning

We decided to relocate the factory to my hometown which is about 1.5 hrs away from Subang. 

The rental there is generally more affordable and manpower is also easily available. 

To start; we had to look for rental and get all the paper work done. this takes about 2-3 weeks from 'looking' to stamping. 

The rental; be prepared to keep for 10-12 months before you can even operate in it. 

in this case; lets assume your rental is RM 2000 x 10 + RM 5000 for utility & deposit = RM 25'000

After that; submit plan to NPRA. This is supposed to be done in 14 working days; however; there will be back and forth emails for explanation etc so it took us almost 2 months before we got the hard copy approval for plan. The application for this is Rm 1000

Once that is done, it's time to go to the local council. Here you will need to get two things done; 

1) Renovation Permit

2) Temporary Licence Permit

3) Signage Permit

For renovation; you will need to hire their panel architect. price depends on the 'plan'. so for this put aside between RM 3500-RM 12k

Then; for licensing it will cost a year's licence between RM 800-1500 depending on your location. But this takes a very long time. 

This planning process here took us close to 9 month before we started renovating

Total cost spend here: RM 25000 + RM 1000 + (RM 3500-12'000) + (RM 800-RM 1500)

= RM 39'500 (lets assume the highest estimation here so if got extra you won't get heartache)

Renovation

Now the renovation is very dependent on who your contractor is and how your condition of your premise is. The one I took was abandoned for 10 years and so my work was more; however I'll not be putting in that cost here so assume yours is 'perfectly' new premise. 

My renovation; was mostly DIY. almost everything I sourced it myself and my contractor was paid just for wet works. So here's the rough cost on how much it will be if you had 'DIYed' like me. x 2 if you were to let your contractor to handle everything for you. 

Generally this is the cost

1) Partition for 14 rooms = RM 25'000

2) Plaster Ceiling with side curve for easy cleaning = RM 15'000

3) Outside Flooring = RM 5000

4) Inside clean room rounded flooring (like hospital) = RM 9k ++ 

5) Doors & Handles = RM 500 x 14 =RM 7,000.

6) Waterproofing and paint = RM 20'000

7) 14 airconds & installation = RM 27'000

8) Water Filter from main pipe & RO Water = RM 15'000

9) Minor Repairs & Cleaning = RM 5000

10) Electrical & Lights = RM 12000

Renovation cost: RM 140'000

Other Must Have For GMP:

1) Calibration certification for 14 thermogyrometer, 2 viscometer, 2 pH meter, 5 balancer = RM 3400

2) Stainless steel cross over bench = RM 8450

3) Pest Control Contract = Rm 2500-3000

4) Air Conditioning Maintenance Contract = RM 15'000

5) Water & Lab Contract = (we didn't need to pay coz we are already using their service)

6) Water filter maintenance contract (prepaid for a year at RM 2000)

7) Documentation & SOP (we already have this so reusing our old SOP but if it's your first time you will have to hire a consultant if you are not from this field. Be prepared to pay RM 15-30k)

8) Machines, equipments and tables  (we are using our existing but previously we purchased them at almost RM 80'000)

Total Must Have= RM 141'850

Total Cost

So The Total Cost To Start a small GMP Factory is:

RM 39'500 + RM 140'000 + RM 141'850 = RM 321'350

Im sure ive forgotten somethings but just to be safe; keep aside RM 350k

don't be like me as I didn't calculate all this initially (4 years ago). my budget was just cost of renovation and a little extra. But seriously! everything else quickly catches up. 

Luckily at that time SoapLab was already 11 years old; so we had some company savings that could be used in this. 

Is it Worth It?

well it depends. If you already have existing business or if you are already servicing regular ongoing clients then yes. But if you are just starting out or selling like 100pcs a month then no it's not worth it. because besides money; the biggest headache is actually maintenance and documentation. 

when I was operating it at bigger scale in Subang; I felt like a fireman every single day. something will always go wrong; and almost every repair was in 4 figure. 

personally I hated it; and there was no peace and silent like ever. Not at work; not at home (my kids were below 10 then).

But now; now that I know how it was; I would never have invested in the first factory (it was double the cost cause it was in subang and its 3x the size). This is one business venture that I didn't enjoy at all and if it wasn't for our existing clients; I wouldn't have done this.

Truthfully; if you can outsource; outsource. currently we do manufacturing for small quantity like 500pcs so if you are just starting out or looking to expand your existing small business and require KKM NOT; you can always contact us. 

However; bear in mind we are a small facility. so we do have our own limitations. Like I don't have aerosol making machines; or tiny vial making machine etc. ours is straight up just filling into bottles/ jars, regular products like soap, lotions, hair care and skincare. If you wanted to know more what we do; click here.

I hope this helps and if you have any questions; please don't hesitate to contact us:-)

Love;

Nisha