Unicharm India suffers $152 mil. loss from factory fire

06, Aug. 2020

Photo by zelle duda on Unsplash
Photo by zelle duda on Unsplash

NEW DELHI, NNA - The local unit of Unicharm Corp. suffered 16.148 billion yen ($152 million) in losses from a massive fire that destroyed one of its factories in west India in June.

On Wednesday, the Japanese manufacturer of sanitary wear and cleaning products said the provision of allowance for loss on valuation of investment in subsidiaries and affiliates was recorded as an extraordinary loss of 17.142 billion yen in the non-consolidated financial statements for the second quarter of 2020 due to the decrease in net assets as a result of the fire.

The provision was eliminated in the April-June statements, and therefore, did not affect the financial results, the group reported in a statement. As Unicharm India is still in negotiation with an insurance company, insurance income was not recorded.

The company said it is not revising its full-year forecast of consolidated results "at this time" despite the huge losses.

In February, the Tokyo-based company estimated that its sales would rise 6.4 percent to 760 billion yen in the fiscal year ending in December 2020, while net profit would amount to 63 billion yen, up 19.7 percent from 2019.

In the first two quarters of 2020, the group made 356.6 billion yen in sales, up 4.1 percent from 342.5 billion yen last year. Its net report, however, dropped 23.8 percent to 19. 3 billion yen, according to its financial statement.

Meanwhile, the heavily damaged factory in Ahmedabad in the western state of Gujarat has not resumed operations, Unicharm India Managing Director Kenji Takaku told NNA. It had been making children’s diapers and sanitary napkins.

The extensive blaze started in the morning of June 24 when 300 employees were at the site. Although nobody was injured, it took firemen many hours to put out the fire.

The damage amount includes 13.2 billion yen worth of property, plant and equipment, 1.9 billion yen of inventories, and 964 million yen for related expenses.