Notion VTec: Fire caused RM100m-RM200m loss
> Early estimate of damage at main plant in Klang; share price regains some ground after tumbling on Friday
PETALING JAYA: Notion VTec Bhd has estimated a loss of RM150 million to RM200 million from a fire at its main manufacturing plant in Klang, Selangor, last Friday.
“Notion has adequate insurance coverage – RM350 million for property damage, RM217 million for business interruption up to 18 months. Preliminary estimate of the loss is about RM150 million to RM200 million. Once we gain access to the site we shall be able to assess the extent of damage and provide a more accurate estimate,” it said in a filing with Bursa Malaysia yesterday.
The company’s share price gained some ground following the announcement, closing 3.5 sen higher at 73.5 sen, with some 109.6 million shares changing hands. It was the third most actively traded stock. On Friday the stock plunged some 26 sen to close at 70 sen when news of the fire broke.
The company said that investigations by the fire department’s forensic team are ongoing and no personnel are allowed in the premises due to concerns of smouldering remnant smoke and the possibility of injury from falling structures.
It expects to be able to gain access to salvage the tooling, jigs and fixtures by tomorrow and commence recovery and some production using some spare computer numeric control (CNC) machines in Factory 3 located 1km away.
“The building structure will need to be removed and rebuilt including the air supply and electrical wiring and ancillary equipment. The insurer and adjuster team is on site to assist in helping Notion recover in the quickest possible time,” it said.
Notion said the fire source was from a ventilation fan, which spread to all the main plant roofing behind the main office in Notion’s Klang factory located on Jalan Meru.
The fire at 1.51pm last Friday affected more than 552 CNC machines, work-inprogress goods and the quality control building. However, the rear building and the surface treatment plants were unaffected and operational.
“At this moment, the company estimates the affected segments are the camera, hard disc drive top clamps and automotive parts but the company will recommence production in Factory 3 using any spare capacity that Notion has as well as sourcing and renting suitable CNCs and, if needed, rent additional floor space to meet current and new customers’ requirements,” the company said.
Notion explained that it is not easy to outsource to other machinist companies as it requires safety certification and approved vendor, which will take time.
“Notion is committed to restore the orders requirement to the customers’ requirement,” it added.
Notion said it has adequate financial resources to quickly make cash payments to secure any equipment, CNC machines or materials.
In addition, it has laid out a fast recovery plan in order to fulfil customers’ orders and allay their concerns.
The company plans to redesign the roofing of the restored building to include an impervious ceiling layer over the production floor to protect and minimise any other fire oubreaks, and implement better safety and occupational measures and enforcement.
Meanwhile, the new high volume manufacturing of a lifestyle consumer product and another tubing project have not been affected by the fire incident as the new production lines are planned for in the southern region.
However, the company cautioned that there may be a slight delay in the planned production as manpower is now focused on the Klang plant for quick recovery.