(Alliance News) - Tricorn Group PLC on Friday said it has temporarily ceased the expansion of its plant in the US amid challenges in China and volatility in other regions.
The pipe manufacturer said it has been managing the impact of the Covid-19 since early February, with the initial focus on China, where the majority of businesses were not allowed by the government to reopen following the Chinese Spring Festival.
"Our management in China working closely with the local government agreed a range of measures that allowed our Chinese joint venture facility to be reopened within two weeks thus avoiding any significant disruption to our customers in the region. This facility continues to operate as normal," Tricorn said in its statement Friday.
However, the AIM-listed company highlighted that its Chinese supplier took slightly longer to be re-established. It is now operational and alongside the implementation of a parallel sourcing strategy, Tricorn has ensured that component supply issues were held to a minimum.
Outside of China, in recent weeks, Tricorn said it had seen some changes in demand as a limited number of customers have experienced component shortages. However, the company noted that it is currently experiencing a rapid escalation of short term and immediate reductions in demand from key customers.
"The group's balance sheet was significantly strengthened through the fundraising completed earlier this year and positions us well against the current economic climate. The planned expansion of our US facility has been put on hold until the outlook becomes clearer," Tricorn added.
The stock was trading 13% lower in London on Friday at 7.00 pence a share.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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