Supply disruptions may push prices up says Top Glove

Top Glove, the world’s largest rubber glove maker, has shuttered 20 of its factories in stages since Nov 17 after nearly 3,000 workers tested positive for Covid-19. 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.

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

During a virtual news conference, executive chairman Lim Wee Chai, said the company’s supply disruptions at its factories may push glove prices up. “Of course, there is some shortage as Top Glove is a big supplier in the world. Supply will definitely be affected somehow and there is a possibility that glove prices will go up.”

According to Senior Minister of Security Ismail Sabri Yaakob, 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.

The company, which accounts for about a quarter of global supply, has said it expects between 2-4 weeks of delays in some deliveries and estimated a 3% impact on projected annual sales for the 2021 financial year.

In a statement, managing director Lee Kim Meow said that there have been no order cancellations so far, 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. It employs a total of 21,000 workers in its 41 factories in Malaysia and six other facilities in Thailand, Vietnam and China.

The executive chairman 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, after a comment by Human Resources Minister M Saravanan that checks so far revealed “deplorable” conditions at the workers’ housing.

Saravanan reportedly told a local newspaper that visits to the hostels showed 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.” An aide to the minister confirmed his comments to The Associated Press.

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.