Japan electric cable maker Fujikura to dissolve Malaysian unit in restructuring drive
KUALA LUMPUR, NNA – Japanese electric cable manufacturer Fujikura Ltd. will dissolve its Malaysian unit to help restructure business during the global COVID-19 pandemic.
The Tokyo-based company had decided to liquidate Fujikura Federal Cables Sdn. Bhd., after a review showed that the wholly owned subsidiary could not grow sustainably in the future, spokesman Shigeru Jibiki told NNA on Monday.
Fujikura Federal Cables, located in Penang, has supplied cables since 1987 to Japanese engineering firms for plant projects in Southeast Asia. However, Fujikura regards the subsidiary as a non-core unit, which has posted several billion yen (dozens of millions of U.S. dollars) in annual sales in recent years, according to the spokesman.
The group’s performance has fallen due to intensifying competition in the optical fiber and flexible printed circuit board markets, followed by falling demand triggered by the coronavirus outbreak.
The parent company said in a statement last Wednesday that it cannot predict performance in the business year from April as it experiences unprecedented economic environment and sees uncertainty over the global pandemic.
In the business year ending in March 2020, the company posted 672.3 billion yen ($6.2 billion) in consolidated sales, down 5.4 percent from the previous year, and a 38.5 billion yen net loss.
The parent company aims now to add more value to its optical fibers and make flexible printed circuit boards business profitable.
Fujikura President and CEO Masahiko Ito said the firm will abandon its current mid-term business plan, which started in fiscal 2016, and start restructuring management as well as business operations.