The disposable gloves manufactured by the two subsidiaries make up some 12.5% of Top Glove’s annual sales to the US – Top Glove will still be able to ship its products to the US, but they will remain at warehouses at the Free Trade Zone.
Meanwhile, should the detention order take a much longer time to resolve, Top Glove can opt to redeploy its supply meant for the US market to other countries whereby demand for rubber gloves has overtaken supply.
Due to the current COVID-19 pandemic, Top Glove believes that other countries would readily take up its supply of gloves, as evidenced by an exponential increase in sales from countries such as Germany, Spain, Italy, Brazil, and Canada.
It also has the alternative to bank on its other subsidiaries to export its gloves to the US, given that only two subsidiaries are affected by the detention order.
“We are confident that in a short amount of time, we will be able to overcome the challenges,” said Top Glove Managing director Datuk Lee Kim Meow. Lee mentioned that the group’s Executive director David Lim will be engaging the CBP to find out why the two subsidiaries are on CBP’s list.
Top Glove has also engaged the same consultant that advised fellow glove maker WRP Asia Pacific. WRP that was placed on the same list in September last year before the detention order was revoked in March. “We engaged them and have already set a plan in motion to take us out of this detention order,” Lee said.
Top Glove’s management is confident to overcome the issues soon and get themselves off the detention order within two weeks to a month.
“Once in a while, the foreign media have to report some stories to their readers to make it more interesting –we understand it’s much easier to create big news when you target a big manufacturer and what else (if not) the biggest maker of gloves in the world so people’s attention will be focused on that area,” Lee added.
“I think we’ve had enough of all these reporting and we think this is a good opportunity to put this behind us and move ahead once and for all.”
Since January 2019, Top Glove has implemented a Zero Recruitment Fee Policy, where agents are not allowed to collect agency or recruitment fees from foreign workers – employers are concerned that the act of paying the recruitment fees can be interpreted as condoning the charging of exorbitant fees to foreign workers.
Top Glove partially attributed the latest issue with CBP to an agenda by some activists that continued to target the group. “We have been working to reimburse our foreign workers for the agent fees paid prior to January last year, which involves extensive tracing, but these activists are expecting us to make immediate reimbursements,” said Lee.
According to a source, the detention order faced by Top Glove could be resolved swiftly, given that the group’s alleged reimbursement issue is less severe as compared to WRP. It is estimated that the total value of reimbursements range from RM20 million to RM50 million (US$4.7mil to US$11.7mil).
UPDATE: Top Glove Executive chairman Tan Sri Lim Wee Chai said the company will continue to ship its disposable gloves to the US although the goods will remain at the Free Trade Zone. This is allowed for a period of two weeks which it is coincidentally the minimum amount of time needed to resolve the issue with CBP.