Malaysia's Top Glove says COVID-19 outbreak may push prices up after shutting factories

KUALA LUMPUR: Malaysia's Top Glove, the world's largest rubber glove maker, said Wednesday (Nov 25) that supply disruptions at its factories due to a COVID-19 outbreak may push glove prices up. 

The company said it has shuttered 20 of its factories in an area outside Kuala Lumpur in stages since Nov 17 after nearly 3,000 workers tested positive for the coronavirus, with another eight facilities in the same area running below 20 per cent of capacity.

“Of course, there is some shortage as Top Glove is a big supplier in the world. Supply will definitely be affected somehow ... there is a possibility that glove prices will go up," executive chairman Lim Wee Chai told a virtual news conference.

Senior Minister of Security Ismail Sabri Yaakob said at a briefing on Wednesday that Top Glove is now the biggest contributor to the country's COVID-19 cases. 

A total of 2,684 cases have been linked to Top Glove so far, he added. 

READ: Malaysia's Top Glove shares tumble after government says factories to be shut

READ: Malaysia to shut some Top Glove factories in phases amid COVID-19 outbreak

The company, which accounts for about a quarter of global supply, has said it expects between two and four weeks of delays in some deliveries and estimated a 3 per cent impact on projected annual sales for the 2021 financial year.

Managing director Lee Kim Meow told the news conference that there have been no order cancellations so far. He said priority will be given to hospitals and essential services amid the shortage, and voiced confidence that the issue will be resolved quickly. Top Glove produces about 90 billion rubber gloves a year, and exports to 195 countries.

The area in Klang where Top Glove factories and workers' hostels are located is currently the most active in the country, with 4,036 coronavirus cases. The health ministry said cases have spread from the factories to the wider community. Malaysia has reported a total 58,847 cases, including 341 deaths.

The company said about 6,000 workers have been screened, with a few thousands more to undergo testing by the end of this week.

Lim dismissed concerns of contamination, saying that workers have no direct contact with the gloves, with the production lines fully automated, and that the high heat in the ovens would kill the coronavirus.

He said his team was taken by surprise by Human Resources Minister M Saravanan's comments that checks so far revealed “deplorable” conditions at the workers’ housing.

“I have visited the hostels and the conditions are terrible. My officers were ordered to go in full force as this is a big, vulnerable migrant worker colony. If we don’t act, this cluster might get out of control," Saravanan reportedly told a local newspaper this week. An aide to the minister confirmed his comments to The Associated Press.

Lim said he was puzzled as to why the minister changed his tune because he had given approval during a visit to Top Glove factories a few months ago.

READ: In Malaysia's Sabah, COVID-19 pandemic rages as migrants flee testing

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“Since the minister’s visit, our housing condition has continued to improve ... because we pour in more money to improve facilities and we want to do it quickly. So it came as a big surprise when such comments were made," he said, adding that the company will seek clarification.

Top Glove has more than 11,000 workers at the 28 affected factories in Klang. The company has said it has invested millions of dollars in recent months to upgrade housing facilities and ensure that strict health measures were followed to curb the spread of the virus.

It employs a total of 21,000 workers in its 41 factories in Malaysia and six other facilities in Thailand, Vietnam and China.

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