Wednesday, October 12, 2011

More producers forced to suspend work

More producers forced to suspend work

The country is counting the cost as more manufacturing companies suspend their operations because of the severe flooding.

Many Japanese companies have temporarily halted production. They include two Ajinomoto units, Sony's digital-camera plant, a Mitsubishi Motors Corp auto plant, Hitachi's refrigerator-compressor factory, Toshiba's two plants making microchips and hard disks, Nippon Meat Packers' two units, Pioneer's two auto-electronics facilities, and Hoya's lens plant.

Others are one of the world's largest manufacturers of hard drives for personal computers, Western Digital, and KCE Technology and Stars Microelectronics (Thailand).

Thai Reinsurance, the only reinsurer in the Kingdom, conceded yesterday that it would be affected by the flooding that has killed at least 281 people and destroyed or damaged a large amount of assets across the country. The company expects to shoulder net damage claims of about Bt260 million. This will drive up this year's loss ratio by 5 percentage points to 48 per cent. The historical loss ratio averages 45 per cent.

Because of the rising water level around the Bang Pa-in Industrial Estate in Ayutthaya, where it is located, Stars Microelectronics (Thailand) decided to halt its operations from yesterday's night shift and plans to resume production from next Monday. This is to ensure employees' safety and protect its property as far as is possible.

KCE Technology, a subsidiary of KCE Electronics, a maker of printed-circuit boards, shut down its plant in Ayutthaya's Hi-Tech Industrial Estate after a request from the estate operator to suspend production for safety reasons, according to the company's filing to the Stock Exchange of Thailand.

Ajinomoto, a Japanese maker of seasonings, halted production at two units because of the flooding, according to Bloomberg.

Production at its drinks unit has been suspended since October 3 after the plant was flooded, while output at a frozen-food unit has been halted since last Friday after workers were ordered to evacuate, according to a company statement to the Tokyo Stock Exchange.

Western Digital said yesterday that production in Thailand had been halted to protect employees, and output would therefore be constrained in the current quarter.

Sony suspended operations at its Ayutthaya plant for digital cameras on Tuesday, spokesman Hirofumi Otsuru said. It plans to wait at least until tomorrow before reopening.

ON Semiconductor, a US-based maker of chips that help computers manage power, expects some loss of revenue in the current quarter and into next year after suspending production at its Sanyo Semiconductor unit, it said in a statement on Tuesday.

The subsidiary accounts for 10 per cent of the group's production, ON Semiconductor said.
Mitsubishi Motors plans to suspend Thai production until Saturday, company spokesman Shigeru Jibiki said.

While the auto-maker's facilities have not been damaged, the delivery of parts from some suppliers has been delayed, he said. The company expects production to be cut by 1,500 units.

Production at Hitachi's plant that makes compressors for refrigerators has been halted since Friday, spokesman Yuichi Izumisawa said.

Hitachi Metals also suspended operations at two plants making components used in hard disks and autos, he said.

Toshiba has suspended production since Tuesday at its two factories that make chips and hard disks, spokeswoman Kaori Hiraki said.

Nippon Meat Packers has suspended operations at two units since Saturday because of the flooding.

Pioneer, a maker of car-navigation systems, has idled two plants, and Hoya has suspended operations at a lens plant.
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