Sunningdale Tech Ltd. is moving its Mexican auto parts production into Asia and relocating some Singapore parts production to neighboring Johor, Malaysia.
Chief Executive Officer Khoo Boo Hor said the move is part of a strategy to realign the firm's manufacturing operations.
The company's Singapore injection molding business, except for health care and some precision parts, will be relocated to Johor by April. Sunningdale's bezel and climate control component production will move from Guadalajara, Mexico, to facilities in Asia, and the Mexican plant will focus on tooling.
We are trying to maximize the utilization of capacity and facilities in Asia and our technical expertise in decorative plastic technology is centered in Asia, the company said.
There are no current plans for layoffs, but a lot will depend on the state of the economy heading into the second half, said a Sunningdale official.
Khoo, who expects a challenging business environment for this year, said: We will also continue to intensify efforts to develop new revenue streams but will only venture into new businesses if our existing capacity allows it. We focused our effort in 2008 to manage for cash flow, but the rate at which resin prices rose and the U.S. dollar weakened in the first half drove us to aggressively take down our cost structure.
For calendar 2008, Singapore-based Sunningdale recorded a net loss of S$97.5 million (US$69 million) compared with a gain of S$12.1 million (US$8.6) for the year before. Sales for the year fell 5.2 percent to S$365 million (US$258.3 million) from S$385.1 million (US$272.5 million) in 2007.
But Khoo said gross margins improved in the second half of 2008 due to plant consolidations and other cost-cutting measures.