Sern Kou winding up plywood business

KUALA LUMPUR: Sern Kou Resources Bhd is set to halt its plywood manufacturing operations at its 51 per cent-owned subsidiary, Sern Kou Plywood Sdn Bhd, which has been operating at a loss since the 2024 financial year. The decision comes as there is no expectation of improving financial performance in the near future. Sern Kou Plywood reported revenue of RM12.43 million for the unaudited 2026 financial year, a decrease from RM17.38 million in the previous year.

The subsidiary's contribution to the group's revenue dropped to 2.8 per cent in FY26 from 3.57 per cent in FY25, and its share of the group's after-tax loss increased to 5.51 per cent. Upon cessation, Sern Kou Plywood will gradually wind down its operations, which may involve selling off its assets or leasing them out, with an estimated impairment amounting to RM338,000.

The decision will impact 88 employees, with some retained for the wind-down process and others facing retrenchment or transfer within the group. The estimated retrenchment cost is RM200,000, which will have a financial impact of approximately RM274,000 on the group. The cessation will not affect Sern Kou's other manufacturing businesses, including furniture production and sawmill operations, and is not expected to significantly impact the group's losses or loss per share.