The world’s largest rubber glove manufacturer, Top Glove, expects an impact of 3% on its 2021 sales revenue, due to the temporary closure of its 28 manufacturing facilities in Selangor, to stop the spread of Covid-19 that has affected over 4,000 of its workers.
To date, the Malaysian firm has closed 16 facilities in Meru, Klang, while the other 12 facilities are currently operating at about 20% capacity. These will be temporarily closed in stages for Covid-19 testing amongst its employees and full site sanitisation before they can be re-opened. The firm says the 28 facilities affected represent about 50% of its total production capacity.
In a statement it issued, Top Glove said, “As part of our risk management strategy, Top Glove factories are diverse in location and countries with business continuity plans. The impact from this temporary disruption is expected to cause some delay in our delivery schedule by about two to four weeks for those facilities affected. However, we do not anticipate penalty from this delay in delivery. We estimate about 3% of our FY21 sales revenue to be impacted.”
Meanwhile, the company says it has rescheduled its production plan for those non affected facilities “to produce those very urgent orders”.
Earlier, the government had implemented the enhanced movement control order (EMCO) at Top Glove’s specific foreign workers’ dormitories in Meru until the end of November. The firm employs some 21,000 workers nationwide, a majority of whom are foreigners. Over 80% of those infected by Covid-19 are foreign workers.
Malaysia’s Human Resource Minister Datuk Seri M. Saravanan has been quoted as saying that conditions at Top Glove factories will be investigated after checks at the workers’ dormitories in Klang revealed “deplorable, crowded and unsanitary conditions”.
This is not the first time the firm has faced controversial issues. In July this year, the US Customs and Border Protection (CBP) had placed a ban on imports from two subsidiaries of Top Glove over forced labour concerns. Later, Top Glove agreed to pay US$40 million remediation fees to its foreign workers in order for US to rescind the ban. The North American market accounted for about 27% of Top Glove’s total exports last year.
As the world’s largest rubber glove manufacturer, Top Glove can produce up to 90 billion pieces/year of gloves at its 36 glove factories.