Polarizer manufacturer BenQ Materials Corp (明基材料) yesterday said it has decided to shut down its manufacturing plant at the Southern Taiwan Science Park (南部科學園區) to lower operational costs and improve its competitiveness.
“The company must make structural adjustments to improve competitiveness amid operational challenges due to falling average selling prices and the yen’s appreciation against the US dollar,” BenQ Materials said in a filing with the Taiwan Stock Exchange.
The filing came after several Chinese-language media outlets reported that the company on Wednesday night unexpectedly notified more than 300 employees at its plant that would terminate production lines at the end of this month, because of increased rent at the science park.
BenQ Materials said in the filing that the surge in rent was one of the factors behind the plant’s shutdown, but the more worrisome challenges stem from falling average selling prices of its products and rising costs due to the appreciation of the yen.
The yen’s strength against the US dollar has seriously affected the company, which purchases the majority of its materials from Japan, the filing said.
BenQ Materials said it has decided to keep about 50 employees on at its research and development unit at the science park, but to close its polarizer production lines.
The company said it would help the 300 employees affected transfer to its other manufacturing units, or offer them compensation and introduce them to job opportunities at other firms.
The firm’s polarizer production will be centered on its plants in Taoyuan from now on, the filing said.
BenQ Materials has moved into the contact lens and biomedical industries in the past two years, as part of its efforts to reduce its reliance on the declining polarizer business, but the polarizer segment still accounts for more than 90 percent of its total revenues.
The company reported a net loss of NT$145.55 million (US$4.59 million) in the first half, compared with a net income of NT$364.74 million in the same period last year.
Revenue contracted 14.74 percent to NT$8.46 billion in the first eight months of this year from the NT$9.92 billion posted in the same period last year, company data showed.
BenQ Materials shares dropped 1.59 percent to NT$15.45 in Taipei trading yesterday, underperforming the TAIEX, which lost 0.15 percent.
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