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Explosion Rocks Foxconn Plant, Kills Two Workers

May 21, 2011

On Friday, Xinhua News Agency reported a large explosion and fire at the Hongfujin Precision Electronics plant in the high-tech industrial zone west of Chengdu, the capital of Sichuan province, killing two people and injuring 16 others.

The plant is owned by Foxconn International Holdings Ltd, which is Apple’s main manufacturing partner currently said to be producing the popular iPad2.

Foxconn is also the world’s largest contract manufacturer and an affiliate of Taiwan’s Hon Hai Precision Ind Co Ltd.

Last year the Taiwanese company made headlines when it was reported that poor working conditions at its factories in southern China drove many workers to commit suicide. Since then, the company has pledged to improve the welfare of its employees, reports Reuters.

The fire was extinguished a little after 11p.m. local time reports China Central Television. Preliminary conclusions by Chengdu police have ruled out foul play, China News Service says.

Investors are watching closely as to how supply of the iPad2 will be affected. Apple shares were down 1.56 percent closing at $335.22 on the Nasdaq, reports Reuters.

Foxconn spokesperson Edmund Ding wrote in an email to Bloomberg that the fire was under control and that full cooperation has been given to the investigation and to contacting the families of the affected workers.

“The company has halted production at the site of the explosion until the investigation is complete,” Ding told Bloomberg.

Ding couldn’t comment on what products are produced at the plant and that the company is still assessing the effect on production.

Apple’s spokesperson Steve Dowling told reporters” “We are deeply saddened by the tragedy at the Foxconn plant in Chengdu and our hearts go out to the victims and their families. We are working closely with Foxconn to understand what caused this terrible event.”

However, he did not comment on any possible supply disruptions, referring questions to Foxconn.

Brian White, a Ticonderoga Securities analyst told Reuters that Foxconn’s Chengdu plant produces a lot of iPads since the factories in the southern Chinese city of Shenzhen shifted some of its production to Chengdu.

Reuter reports that North America and Mexico, as well as in European countries such as Slovakia and Poland, also house a number of Foxconn plants.

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