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Munters to sue over defective part

Munters has claimed it was problems with a component in one of its dehumidifier products which cost the company £1.1 million in the second quarter of 2008.

The global air treatment specialist said it was taking legal action to recover the loss.

Munters, which is based in Sweden and trades across western Europe and the United States, confirmed the cost of the problem in an interim report on its results for the first six months of the year. The cost is equal to 10 per cent of the company’s earnings in the first half of this year.

Lars Engström, Munters chief executive, said: “It is a specific problem within the commercial area where we have had problems and we indicated we had warranty problems in the first quarter of this year.

“We have now exactly defined the problem and there is a little bit of replenishment to do regarding the defective component. This is a charge we take now in order to solve this problem and it is not in any other products. It is well defined and we know exactly every installation.

“We have initiated legal processes with the supplier which in our view supplied the product and we hope to recover our costs. It is impossible at this stage to say how much and when, but we are optimistic although legal processes take some time, so it is not something which will happen this year if we don’t find a solution before legal activities begin.”

The report said the cost of replacing components in products which had already been sold had led to “non-reoccurring” costs of 13 million Swedish Krona – equivalent to £1.1 million.

The company refused to make any further comment on the case regarding how many units were affected and who the supplier is.