Thursday, December 15, 2011

Production at Thai plants to normalise by 3Q next year, says Eng Teknologi

KUALA LUMPUR (Dec 15): ENG TEKNOLOGI HOLDINGS BHD [] said the production level at its two subsidiaries affected by the floods in Ayuththayya, Thailand would only return to normal by the third quarter of 2012 as the output was meant for major customers that had also been affected by the floods.

It said on Thursday that flood waters had receded at the manufacturing facilities of both Engtek (Thailand) Co., Ltd. (ETCL) and Altum Precision Co., Ltd. (APT).

The company said that decontamination and cleaning work were currently underway at the facilities and was expected to be completed by next week, adding that restoration work would commence after that.

It said insurance loss adjustors had conducted a preliminary assessment of the damage caused by the floods, and that initial assessment indicated that the machinery damage was widespread due to rust, corrosion and contamination after being submerged in flood waters above two metres since October 2011.

'Meanwhile management is currently working on the detailed documentation for the insurance claims which is expected to be finalised and submitted to the insurers by the end of December 2011.

'Thereafter further assessment will be made by the insurers while operations gradually resume,' it said.

Eng Teknologi said the insurance claims process was expected to be completed within three to six months.

'Whilst production capacity of ETCL and APT may be fully restored by the second quarter of 2012, production level at both ETCL and APT are only expected to return to normal by the third quarter of 2012 as the output is meant for major customers which have also been affected by the floods.

'The floods have caused a substantial disruption to the supply chain of key hard disk drive components and the whole hard disk drive industry in Thailand,' it said.

The company said the supply chain situation would only be normalised in the next three to six months.

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