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China Sky Chemical units suspend or cut production amid weak demand
CHINA Sky Chemical Fibre Co Ltd said on Tuesday that three of its subsidiaries have either suspended production or reduced their production lines amid continued weak demand for the group's products and softening selling price.
Subsidiaries Quanzhou Tianyu Chemical Fiber & Weaving Industry Co Ltd and Tianjian Special Polymede Fibre Technology Fujian Co Ltd have each reduced their production lines from eight to four in April before suspending production, while Qingdao Zhongda Chemical Fibre Company Limited reduced its production lines from five lines to three currently.
The management had said that it was expecting the nylon market to remain in a period of uncertainty as waning downstream demand and oversupply of nylon products will put further pressure on the average selling price of nylon products.
The mainboard-listed nylon and textile producer had sought a suspension of its shares last week.
It disclosed on Monday that one of its subsidiaries is being sued by former employees who were laid off, while China Construction Bank has also commenced legal proceedings against the group and its subsidiaries.
There is also an outstanding sum of 3.6 million yuan (S$727,000) of salaries and 8.1 million yuan of social security/insurance contribution to be settled, though no lawsuits has been filed yet in this regard.