Kinsteel Bhd, which has been hit by a plunge in steel prices, has retrenched about 50 workers at one of its six production lines in its Kuantan factory to facilitate a restructuring plan.
These workers were told to stop coming to work in a notice dated Oct 16.
The steel group, listed on Bursa Malaysia, is required by the stock exchange to come out with a restructuring plan to lift itself from “PN17” (financially troubled) status.
In a telephone interview with The Star, Kinsteel chief executive officer Datuk Henry Pheng Ching Guan said they would rehire the retrenched workers in six months as they planned to reopen the line with new equipment.
“We will reopen that particular production line and the workers (who have been retrenched) will be given priority when we rehire,” said Pheng.
“We will also be giving them compensation. Our human resource department is in the midst of computing the numbers and discussing with the workers on the amount,” he added.
Confirming there was an outstanding payment of one month’s salary to the workers, Pheng said it would be paid out before the end of this month.
“This is not a group-wide retrenchment. Such a move is normal for industries which have a production line that is non-productive. We target to finalise the restructuring programme before the end of this year.”
Kinsteel used to be one of the largest steel millers in Malaysia and profitable integrated players in the region.
But it buckled after the prolonged fall in steel prices, which also hit its subsidiary Perwaja Holdings Bhd.
Set up in 1991 by Tan Sri Pheng Yin Huah, the group manufactures and trades in a complete range of long steel products used in the manufacturing, construction and infrastructure industries.