GEORGE TOWN (Aug 24): Poh Huat Resources Holdings Bhd’s major Vietnamese subsidiary Poh Huat Furniture Industries Vietnam Joint-Stock Company (Poh Huat Vietnam) has suffered an approximate US$2 million (RM8.44 million) loss in US-bound finished goods due a fire that engulfed two contiguous factory blocks yesterday.

In a filing with Bursa Malaysia, the group said the fire, which lasted from 3.20am till 10.15am the same day, destroyed the factory blocks that housed a finishing line and finished goods warehouses measuring 1.053ha.

“The affected buildings are located within Poh Huat Vietnam’s manufacturing facilities in the Province of Binh Duong (Binh Duong facilities), being the smaller of Poh Huat Vietnam’s two manufacturing facilities.

“The finishing line (in the buildings) comprised spraying line pallets, tow-conveyor system; woodworking machinery and work-in-progress furniture parts and finishing materials.

“The contents of the warehouse comprised mainly finish goods (completed furniture) for delivery to selected customers in United States. The rough estimate value of the finished goods destroyed is US$2 million,” the group said.

Poh Huat added that the rough estimate of the value of the manufacturing facilities, such as the factory building, spray line and woodworking equipment, and materials comprising finishing materials, furniture parts and finished goods destroyed is to be ascertained.

“All the assets, materials and finished goods are fully insured. Poh Huat Vietnam has initiated action in collaboration with its contractors and insurers to ascertain the actual extent and quantum of the damage caused by the fire,” it said.

Meanwhile, Poh Huat said other production facilities at the Binh Duong facilities were not affected and production activities were running as normal.

“Nevertheless, we expect a minimal interruption of about five days with regard to the affected facilities. The bigger factories in Dong Nai will be mobilised to mitigate the production and delivery interruptions.

“Poh Huat Vietnam is now assessing the operational and financial impact arising from the incident including seeking alternative manufacturing or warehousing arrangement within its two manufacturing facilities or third-party facilities if required, to mitigate the interruption caused by the fire,” it said.

The group added that Poh Huat Vietnam has commenced discussion with affected customers to reschedule shipments of furniture and plans to increase production hours from one single 12-hour shift to two eight-hour shifts to increase production for replenishing the lost shipments.

“An appropriate announcement will be made once the actual losses are ascertained and mitigating measures put in place,” Poh Huat (fundamental: 2.1; valuation: 2.4) said.

At 12.29pm, its shares fell 7.09% or 20 sen to RM2.62 with 568,500 shares traded, giving it a market capitalisation of RM300.96 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)