KUALA LUMPUR, Sept 25, 2015:
GPA Holdings Bhd is closing its battery production operations – writing off RM9 million in fixed assets and making a RM3.5 million cash payout in a staff retrenchment exercise. The number of staff axed wasn’t disclosed.
“The manufacturing operations had sustained losses for the past few years consecutively and is anticipated to continue incurring losses if operations continue, based on existing market conditions,” GPA said in its Bursa filing today.
“The manufacturing operations are not expected to be able to turnaround in the near future as the current operations have been hampered by high manufacturing cost primarily due to lack of economies of scale.
“Further, our facilities and technology of production are outdated and inefficient compared to the latest technology available in the battery manufacturing industry and are not able to produce similar quality products in a competitive manner, especially in respect of maintenance-free batteries.
“In view of the non competitive costs, the group had over the past few months gradually scaled down the production of automotive batteries and had sourced its batteries from other reputable manufacturers, and expanded its business in the distribution and trading of imported maintenance-free automotive batteries.”
Editor’s note: Consumer battery producer GP Batteries (M) Sdn Bhd and GP Battery Marketing (M) Sdn Bhd are not associated with GPA Holdings Bhd, which is closing down its operations.