IQ Group Closes Subsidiary's Manufacturing Operations

IQ Group Holdings Bhd has announced the closure of its wholly owned subsidiary IQ Group Sdn Bhd’s (IQM) manufacturing operations on May 5, 2026

 Lighting and security manufacturer IQ Group Holdings Bhd has announced the closure of its wholly owned subsidiary IQ Group Sdn Bhd's (IQM) manufacturing operations on May 5, 2026.

This follows the completion of the final production batch with no further orders thereafter, it said in a filing with Bursa Malaysia.

It said the closure would be in line with the restructuring of manufacturing activities within the framework of IQ Group's efforts to improve cost efficiency and better utilisation of resources across its operations.

"The closure is expected to be completed by the third quarter of 2026," it said.

The group said this exercise will not have any material adverse effect on its financial position and is expected to contribute positively to its long-term operational efficiency.

IQ Group said that over the past three financial years, IQM has experienced a substantial reduction in manufacturing volume, largely attributable to a shift in customer sourcing preference towards China in pursuit of perceived cost efficiencies, followed by the implications of United States tariffs.

This has consequently led to a significant reduction in order volumes for products manufactured by IQM, it said.

"For IQM, the final production batch was completed on April 17, 2026, with no further orders thereafter.

"Following a comprehensive review of operational requirements and future order visibility, IQ Group has decided to cease the manufacturing operations of IQM," it said.

The group said a small team of existing employees will be retained and transitioned to oversee third-party supply and external manufacturer management for products manufactured in Cambodia and Vietnam, while the remaining manufacturing workforce positions deemed redundant will undergo a retrenchment exercise in line with applicable laws and regulations.

It said the closure will not affect the group's other manufacturing operations in China and its offices in Taiwan, Japan and the United Kingdom, as IQM operations are not a major business for the group, with approximately five per cent of IQ Group's revenue affected.

"The cessation of the IQM manufacturing operations is expected to result in an estimated one-off closure expenses of approximately RM2.90 million.

"This comprises RM460,000 relating to inventory written-off arising directly from the manufacturing closure; RM130,000 relating to fixed assets written-off based on their current net book value; and an estimated retrenchment compensation package of RM2.31 million," said IQ Group.

Following the closure, the group also anticipated annual savings of approximately RM1.81 million in subsequent financial years.

Source: www.nst.com.my