Malaysia’s Top Glove Says Virus Outbreak May Push Prices up

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Malaysia’s Top Glove Says Virus Outbreak May Push Prices up

Top Glove produces about 90 billion rubber gloves a year, and exports to 195 countries. 

Malaysia’s Top Glove Says Virus Outbreak May Push Prices up
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Malaysia’s Top Glove, the world’s largest maker of rubber gloves, said Wednesday that supply disruptions at its factories due to an outbreak of the coronavirus may push glove prices up.

The company said it shuttered 20 of its factories in an area outside Kuala Lumpur in stages since November 17 after nearly 3,000 workers tested positive for the virus. Another eight facilities in the same area are currently running below 20 percent of capacity, and will also be closed to screen and quarantine workers.

“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.

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 percent 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 virus hotspot in the country, with 4,036 coronavirus cases. Barbed wires surrounded two Top Glove hostels that have been placed under lockdown.

The health ministry said cases have spread from the factories to the wider community. Malaysia has reported a total 59,817 cases, including 345 deaths.

The company said some 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.

“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.

By Eileen Ng for the Associated Press in Kuala Lumpur, Malaysia.