Unisem halts Chengdu ops on coronavirus concerns
O Plant closure to last from Feb 2 to 9, on the directive of Chinese city’s authorities
PETALING JAYA: Unisem (M) Bhd has become the first Malaysian manufacturer to order a halt to its operations in China over concerns on the spread of the coronavirus.
In a Bursa Malaysia filing, the group said its subsidiary Unisem Chengdu Co Ltd has stopped all operations at its plant on the directive of local authorities.
“[The closure runs] beginning Feb 2 to Feb 9. This is part of the measures taken to contain the coronavirus,” it said.
The impact from the suspension of its Chengdu operation remains to be seen.
According to the group’s FY18 annual report, Unisem’s Asian operations contributed 36.5% or RM492.96 million in revenue, 17.4% lower than its contribution of RM596.59 million in FY17.
Unisem Chengdu, employing 2,000 people, started operations in 2006 and provides full turnkey solutions; packaging capability, leadless packages, modules, microelectromechanical systems, wafer level chip scale package and flip chips.
For the third quarter ended Sept 30, Unisem reported first quarterly losses since FY13 with a net loss of RM3.2 million, from a net profit of RM35.15 million in the previous corresponding quarter on trade conflicts leading to supply chain realignment and sustained weakness in its automotive segment.
There were also one-off adjustments made including termination benefits for the group’s Indonesian operations, deferred tax, forex gain, inventory provision and grant income.
Its revenue also fell 10.8% to RM316.3 million from RM354.7 million a year before on lower sales volume.
On Bursa Malaysia yesterday, Unisem shares closed 4 sen lower at RM2.18, with 31,300 shares done. It has declined 13.1% from its recent peak of RM2.51.