Temporary Closures at Top Glove Factories as COVID-19 Cases Rise, 3% Impact seen on FY 21

  • 2020-11-25 12:00:00
  • Reporter

Datuk Seri Ismail Sabri Yaakob, Senior Minister (Security Cluster), Malaysia


The shares of Top Glove Corporation Bhd. fell on November 23, following the confirmation from the world’s largest glove manufacturer that 28 of its factories in Klang, Selangor, Malaysia, would be temporarily shut after a spike of coronavirus infections among its workers. Malaysia’s Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob announced the same day that Top Glove’s factories in Klang would cease operations in stages, to allow workers to undergo screenings and mandatory quarantine to contain the spread of COVID-19 among the employees. 

In a press release, the company said it would “work closely and cooperate fully with the relevant authorities to implement the temporary stoppage by stages” of their manufacturing facilities in Meru, Klang. Moreover, Top Glove pointed out that from November 17, it had temporarily stopped production in 16 facilities in Meru, with the remaining 12 facilities in Meru operating at much reduced capacities. The company added that, with guidance from Kementerian Kesihatan (Malaysia’s Ministry of Health or MOH) the Kuala Lumpur headquartered company had, as on November 23, completed the full screening of about 5,700 workers at Top Glove hostels and would proceed with the COVID-19 screening test for the remaining workers and staff at the company’s factories in Meru. Top Glove provided reassurances that its premises and dormitories are disinfected regularly, with all the necessary precautionary measures strictly in place. 

By November 24, Top Glove said that as a result of having temporarily halted production in 16 of its manufacturing facilities in Meru, Klang, and the remaining 12 facilities operating at much reduced capacities, two- to four-week delays are expected in some deliveries, as well as a longer lead time for orders. The company estimates a possible 3% impact on projected annual sales for the financial year 2021. To minimize the impact on Top Glove’s customers, the company is transferring sales orders to unaffected manufacturing plants and rescheduling deliveries where possible. Industry analysts say that 20 out of the 28 factories are glove production plants, with an estimated capacity of about 45 billion pieces per year. Of all the glove production facilities in Klang, only 10% of them are said to be operational, due to the labour shortage. Top Glove is ramping up production outside Klang to meet demand. 

The company made assurances that it continued to work closely with authorities through this period, towards ensuring the continued safety and well-being of its employees and the local community, which it says remains its utmost priority. 

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