Full restoration of plant may take up to 1 year, says Notion VTec

Full restoration of plant may take up to 1 year, says Notion VTec

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KUALA LUMPUR (Oct 23): Notion VTec Bhd estimates that full restoration of structure and Certificate of Fitness following the fire incident last Friday at its main manufacturing plant in Klang may take up to a year.

In a filing to Bursa Malaysia Securities this morning, Notion said the fire source, apparently from a ventilation fan, spread to all the main plant roofing behind the main office in Notion Klang factory.

The company said the fire had affected more than 552 Computer Numeric Control (CNC) machines and Work-in-Progress (WIP) goods and the Quality Control “QC” building but not the rear building and the surface treatment plants are good and operational.

It said that as the Fire Department forensic team is doing investigation and there are still concerns of smoldering remnant smoke and the possibility of injury to falling structure, no personnel is allowed in.

“By Tuesday, Oct 24, the Management should be able to gain access to salvage the tooling, jigs and fixtures and do recovery and commence some production using some spare CNCs in Factory 3 located 1 km away.

“The building structure will need to be removed and rebuilt including the air supply and electrical wiring and ancillary equipment,” it said.

Notion said the insurer and adjuster team is on site to assist in helping Notion recover in the quickest possible time.

The company said it 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 to 200 million.

“Once we gain access to the site we shall be able to assess the extent of damage and provide a more accurate estimate of loss,” it said.

At this juncture, Notion estimates the affected segments are the camera, Hard Disc Drive top clamps and automotive parts but the company said it 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.

“It is not easy to out source 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.

“Notion has adequate financial resources to quickly make even cash payments to secure any equipment or CNC or materials,” it said.

The company said that the immediate effects of this outage in this affected Plant is about 50 to 60% of the Company sales revenue but with the fast recovery plan, Notion will have restored 75% of the outage progressively within 5 months and the balance within another 3 months.

Trading in the shares of Notion was halted from 9am to 10am this morning.