Top Glove says Covid-19 problem will have minimal impact on deliveries

Delivery of gloves will be affected for this period but the company still has many other factories in other countries


TOP Glove Corp Bhd finds itself embroiled in a major Covid-19 infection cluster involving 2,684 workers, with jittery investors increasingly concerned about the financial impact this episode will have on the company.

The world largest glovemaker is now the single biggest contributor to the country’s Covid-19 cases, affecting a quarter of its 11,215 employees in its factories in Klang, Selangor.

The company lost another RM1.2 billion in market value yesterday as the Teratai cluster linked to its workers prompted the government to order Top Glove to shut down its 28 factories in stages.

In a special virtual press conference, Top Glove’s executive chairman Tan Sri Dr Lim Wee Chai said the group’s rubber glove production and supply will be affected resulting from its factory closures.

“We have temporarily stopped operation in 20 factories in Meru, with another eight production lines running at reduced capacity below 20%. So, there is some supply shortage as Top Glove is a big supplier in the world,” he said in a virtual presser yesterday.

It may be possible for the group to seek help, and outsource production to fulfil demand but the amount will be small, he added. The company is now improvising to meet heightened demand from clients across the world.

Lim did not discount the possibility of the average selling price (ASP) of its products may see a slight increase following temporary disruption due to the factory closures.

“The potential for increment in ASP will be more dependant on the situation. There is a possibility for ASP to go up,” Lim said.

Top Glove MD Datuk Lee Kim Meow said the group will prioritise orders and give attention to the hospital and essential orders.

“Delivery of gloves will be affected for a period that we have cut down our operations. Top Glove has many other factories in other locations in Thailand, Vietnam and China.

“We have informed our customers that there will be a slight delay in shipments. So far, there is no cancellation of orders. Customers know us, and we’ll quickly overcome this challenge to deliver the glove,” he explained.

Lee also stressed that there is no contamination in its product produced by the affected factories, mainly because the factory’s environment is quite warm at 30°C-40°C.

“Inside the oven, it can reach 110°C. The virus can hardly survive as temperatures rise. In terms of packing, there is no direct contact with the glove.

“Our workers are fully equipped with personal protective equipment, face mask, helmet and glove. Our production line is fully automated,” he added.

Considering the hot weather in Malaysia and the one month duration to ship to clients in Europe and other countries, Lee played down the fear of product contamination.

He also noted that there will be demand for examination gloves to administer vaccines.

“If we have seven billion vaccines to do, we also need seven billion pairs of gloves. If they need to do twice the vaccine, hence, 14 billion of examination gloves are needed,” he said.

Meanwhile, the Malaysian Rubber Glove Manufacturers Association (Margma) stated that there will not be any aggravated disruption of glove supply to the world.

“Be assured that new capacity is available to make good on the interim shortfall. Margma’s members have also embarked in engaging more locals to work in our facilities and this is surely a good sign going forward,” said its president Dr Supramaniam Shanmugam in a statement.

Margma estimates the global demand to touch 360 billion pieces this year and Malaysia is expecting to supply at least 250 billion to 270 billion pieces.

Margma also urged its members to upscale its preventive ordinances to ensure a safe and healthy workplace environment in the light of the prevailing second wave attack by the Covid-19 viruses.

“It is important and necessary for our members to maintain the highest level of hygiene in the workplace and also in the hostels and dormitories housing the workers.

“A strict adherence to the standard operation procedure imposed by the Health Ministry, must be further enhanced by constant monitoring and checks by the health and security staffs of each and every strata of the workers in both the factories and dormitories,” he said.