KUALA LUMPUR (May 4): IQ Group Holdings Bhd (KL:IQGROUP) is shutting down its Penang manufacturing operations that make motion sensors and lighting as orders fell.
A small team of existing employees will be retained to oversee third-party supply and external manufacturer management, IQ Group said in an exchange filing. The remaining 37 employees will be retrenched and there will be no other options for those affected, the company noted.
“The closure…will not affect the group’s other manufacturing operations in China, and offices in Taiwan, Japan and the UK,” IQ Group said.
IQ Group Sdn Bhd, the company’s wholly-owned subsidiary which runs the factory, has seen substantial decline in orders over the past three financial years ending March as customers shift their orders to China where costs are lower. Volume was also hit by US tariffs.
Production in Malaysia is no longer commercially viable after the final production batch was completed in April with no further orders since then.
IQ Group said it has been working with customers to build sufficient inventory to support the remaining product life cycle requirements, and in some instances, existing products have been replaced with new designs that offer cost competitiveness through production in China.
“For the US DIY market, the group has identified alternative manufacturing locations outside China that offer innovative and cost-competitive solutions in strengthening our ability to win new business,” IQ Group said.
The proportion of revenue affected by the closure is about 5% of the group’s total, the company said, noting that it will book one-off expenses totalling RM2.9 million for write-offs and retrenchment compensation.
The closure is expected to be completed by September this year and result in annual savings of about RM1.81 million in subsequent financial years, according to the company’s estimates.
IQ Group made a small net profit of RM490,000 in the last financial year ended March 31, 2025, dragged by a massive foreign exchange loss. Revenue, meanwhile, declined nearly 14% to RM110.35 million. Over the past three financial years, IQ Group has lost 17% in revenue.