TCC Group Holdings Co (台泥) on Wednesday said that it would incur a financial loss of NT$11 billion (US$366.81 million) from a fire that badly damaged its lithium-ion battery cell “gigafactory” in Kaohsiung last month.
To shoulder responsibility, the management team, led by TCC chief executive officer Nelson Chang (張安平) and TCC president Roman Cheng (程耀輝), would take a 20 percent salary cut from this month through the end of the year, the company said in a statement.
The factory in Kaohsiung’s Siaogang District (小港) caught fire on July 14. It is operated by Molie Quantum Energy Corp (MQE, 三元能源), which is 78.1 percent owned by the holding company.
Photo courtesy of TCC Group Holdings Co
The incident resulted in total losses of NT$16.4 billion, including repair costs, as the blaze damaged the plant, manufacturing equipment and inventory, TCC said, adding that the figure would drop to about NT$11 billion after deducting insurance payouts.
The plant and items in it are covered by property insurance with total coverage of NT$21.9 billion and a maximum payout of NT$3 billion per incident, it said.
The exact losses are yet to be determined, but the estimate does not involve additional spending, it added.
TCC said the incident has prompted it to accelerate efforts to expand partnerships with foreign original equipment manufacturing service providers and re-evaluate the possibility of building overseas battery cell capacity.
Human error and mechanical equipment malfunction were the two possible causes of the blaze, TCC said.
The employees of MQE directly involved in the fire face disciplinary measures that might include penalties, salary reductions or reassignment, it said.
To prevent supply disruptions following the fire, TCC’s battery cell business has quickly negotiated with international customers and partners to arrange overseas supply chain outsourcing, the firm said.
It has also accelerated the activation of a backup production line operated by E-One Moli Energy Corp (能源科技) — also owned by TCC — in Tainan, which can partially support the MQE battery plant’s capacity from this month.
Additionally, some customers are willing to provide non-recurring engineering fees and support for overseas production resources, the company said.
TCC on Wednesday reported net profit in the first half of this year slumped 77 percent to NT$961 million, from NT$4.22 billion in the same period last year.
Earnings per share were down to NT$0.07 from NT$0.51.
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