STR To Close Malaysia Facility

(RTTNews) - STR Holdings Inc (STRI), a provider of encapsulants to the photovoltaic module industry, on Monday said it has decided to close its Malaysia facility.

The company said it plans to cease operations at its Malaysian encapsulant production facility, effective August 2, following a recent decision by the company's largest customer to exit its OEM module production in Malaysia. The company expects to continue to fulfill orders to this customer from its Spain and China facilities.

Other factors contributing to the decision to close the plant include underutilization, increasing costs in Malaysia resulting from the recent introduction of a Goods & Services Tax, and the newly launched investigation by the European Commission that may result in anti-dumping and countervailing duties on solar cells and modules consigned from China and assembled in Malaysia and Taiwan, the company said.

The company is in the process of engaging agents to sell its Malaysian real estate, recently appraised at about $8 million, as well as the associated production and ancillary equipment.

The company expects to incur about $1 million to $1.5 million of associated non-recurring severance and other exit costs during the second half of 2015, partially offset by the sale of production and ancillary equipment, and further expects to generate about $2.4 million of associated annual pre-tax savings on a going forward basis.

The company plans to transfer its Malaysian raw material inventory to its existing Spain and China manufacturing facilities, which will continue to operate in the normal course.

The company is actively monitoring and evaluating its financial and operational performance.

The company also said it continues to work closely with its majority shareholder, Zhenfa, to strengthen its encapsulant business and further evaluate and develop other synergistic opportunities.