Apple Supplier Pegatron Reports Blast at Shanghai Plant

Apple Inc supplier Pegatron Corp reported a small explosion at a subsidiary's plant in Shanghai over the weekend that it said had injured 61 workers, the latest in a series of incidents that have spotlighted safety concerns at factories in China.

Pegatron Chief Financial Officer Charles Lin told Reuters that the explosion at the plant belonging to Riteng Computer Accessory Co, in Shanghai's Songjiang industrial park, had not caused a fire, but 23 of the injured workers needed to be hospitalised.

"The factory has not started operations yet. Part of the facility is still under pre-operation inspection and part is running trial production," Lin said.

Pegatron said in a separate weekend statement that there was some damage to machinery but it could make adjustments to the facility to minimise the impact on operations and revenue.

Riteng Computer declined to comment.

In a separate statement, the Shanghai city government said the explosion occurred at about 3:40 p.m. on Dec. 17 at a workshop on the fourth floor of the facility. It put the number of injured at 57, of whom 23 had burns and were hospitalised for further observation, but said none had life-threatening injuries.

Shares of Pegatron dropped 6.7 percent at Monday's open but had trimmed the loss to 3.42 percent by 0241 GMT, versus the broader market's 1.47 percent decline.

According to China's Yi Cai Daily, the plant would produce back panel parts for the iPad 2 and if the safety issue could not be quickly resolved, Apple's supply chain would be affected next quarter.

Pegatron declined to disclose details of the plant's customers.

A source with knowledge of the matter said the facility would be partly used to make products for Apple.

Lin said resumption of operations would depend on the government's decision, and an investigation report by the Shanghai city government was expected later on Monday.

The accident adds to safety concerns over factories in China that make most of the world's computers and other electronic devices, and over Apple's supply chain in China, which has come under criticism from the Chinese government, and labour and environmental groups.

Hon Hai Precision Industry Co Ltd, Apple's top manufacturing partner, has had two fire incidents at China plants this year.

In May, an explosion at its electronics polishing facility in Chengdu killed three and injured 15.. In September, electrical cables on a building rooftop at a Shangdong plant caught fire in September but caused no casualties.

The company also had a rash of suicides at its plants last year, blamed by labour groups on overwork and poor conditions.

In October, some Apple suppliers were accused in a report by state broadcaster China Central Television (CCTV) of causing pollution.

Taiwan's Catcher Technology Co Ltd, a casing supplier for Apple, was ordered to close a plant because of complaints about pollution. (Reporting by Argin Chang and Clare Jim in TAIPEI and Samuel Shen in Shanghai; Writing by Jonathan Standing; Editing by Chris Lewis)