World's Top Surgical Glove Maker Shuts Factories

Top Glove's shares slumped by 7.5% on Tuesday (November 24), after the government said 28 factory buildings would be temporarily shut in phases.

"To minimise the impact on our customers, we are allocating sales orders to unaffected factories and rescheduling deliveries where possible", the company wrote.

Top Glove reportedly has about 13,000 workers at its 28 factories in Klang. Top Glove Corporation Bhd expects its revenue for the current financial year ending August 31, 2021 to be impacted by three per cent following the temporary suspension of manufacturing facilities in Klang, Selangor.

The world's largest maker of latex gloves has racked up record profits this year on sky-rocketing demand for its products and protective gear, thanks to the pandemic.

Malaysia itself makes just under two thirds of the world's rubber gloves, according to the Malaysian Rubber Glove Manufacturers Association.

Its remaining 12 factories in the area remained operating at reduced capacities. Europe and North America are its biggest markets. The two other major glove making companies, Hartalega Holdings and Supermax Corp, most likely lack the production capacity to cover the delays.

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Yesterday, it announced the suspension of its said facilities to allow further Covid-19 screening and quarantine of its workers following a surge in Covid-19 cases among them.

The cluster, dubbed the Teratai Cluster, has spread beyond the factory workers' circle.

The Malaysian Ministry of Health reported a sharp rise in cases in the area where Top Glove factories and dormitories are located, with 2,453 workers testing positive for the virus out of 5,767 screened. Checkpoints were staffed by police and soldiers. Top Glove did not say how the closures would affect its ability to meet orders.

However, tightened supply may also boost prices, cushioning the impact, she said.

Two other analysts predicted a 2% hit to annual profit.

The company can produce more than 70 billion gloves a year and is a major global supplier.