Makalot Industrial Co Ltd (聚陽實業) yesterday said it would maintain its output from Vietnam by relocating workers, equipment and raw materials, after a fire broke out at two of the apparel maker’s plants in northern Vietnam early on Sunday.
“None of our workers were hurt and we are still evaluating the financial losses,” Makalot spokesperson Lin Heng-yu (林恆宇) said by telephone.
“Some orders for this month would be delayed to next month, but revenue for this year is not expected to be affected much,” he said.
Photo: CNA
The company said it has fire insurance for equipment and inventories at its Vietnamese plants.
Once it calculates its losses from the fire, it would file a claim with its insurers, Makalot said in a filing with the Taiwan Stock Exchange.
The blaze erupted at 4:45am in the workshop in the Thanh Ha commune of Hai Duong Province’s Thanh Ha District, and quickly spread due to flammable objects and the hot and dry weather, the Vietnam News Agency (VNA) reported on Sunday, citing the Hai Duong Police Department for Fire and Rescue.
The fire was put out in a few hours, but sewing machines and raw materials in the two plants were damaged, VNA reported.
The cause of the fire is under investigation, it said.
“The fire damaged our equipment and inventory, so we plan to redeploy about 1,000 employees and backup equipment to two nearby plants, once our clients agree,” Lin said.
Makalot has six plants in Vietnam.
“Raw material inventories have dropped to one week, but we have already placed new orders,” Lin said.
The two factories, which mainly produce low-end apparel for the US market, accounted for about 5 percent of the company’s annual output, or less than 750,000 dozens per year, Lin said.
The company does not expect orders for the second half of the year to be affected, he said.
“This is the high season for autumn and winter apparel, so none of our clients have wanted to withdraw orders,” Lin said.
The company will redo some of its orders through additional shifts at its four other plants, and outsource some orders, he said.
The two plants would be renovated within three months at the earliest, Lin said, without providing a time frame for the resumption of work.
Makalot shares yesterday closed down 0.53 percent at NT$196 in Taipei trading, compared with the broader market’s 0.66 percent rise.
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