The world’s largest rubber glove manufacturer has warned of delivery delays after thousands of their workers tested positive for coronavirus.
Malaysia-based Top Glove Corp has said that some deliveries could be delayed by a month and new orders could take longer to process after the positive coronavirus tests forced the company to shut down some factory operations, Reuters reported. The company’s sales could fall 3% short of its 2021 projections, and shares, which had been up during the pandemic, dropped by as much as 7.5% Tuesday. (RELATED: Trump Administration Ramps Up Defense Production Act To ‘Mobilize’ Federal Coronavirus Response)
A COVID-19 outbreak has hit Malaysia’s Top Glove, the world’s biggest rubber glove maker, after nearly two and a half thousand workers tested positive https://t.co/QYZ3YfrvhX pic.twitter.com/NWADtF2uEL
— Reuters (@Reuters) November 24, 2020
According to the Malaysian Rubber Gloves Manufacturers Association, Malaysia produces nearly two-thirds of the world’s rubber gloves. The country’s other top glove makers are Hartalega Holdings and Supermax Corp, Reuters reported.
“To minimize the impact on our customers, we are allocating sales orders to unaffected factories and rescheduling deliveries where possible,” Top Glove said in a statement, according to Reuters.
Despite a global rise in demand for rubber gloves and other protective gear during the pandemic, the company’s shares dropped after the Malaysian government announced that it was closing 28 of Top Glove’s factories because of coronavirus, according to the report. The firm has 36 factories that produce gloves and runs a total of 47 factories in Malaysia, Thailand, China, and Vietnam, which employs about 16,000 people. They sell most of their products to Europe and North America.
The factory’s closures will cut the company’s production capacity in half, MIDF Research analyst Ng Bei Shan told Reuters. If selling prices remained unchanged, a two-week closure could reduce Top Glove’s net income by 4% in 2021, she said, noting that a limited supply could cause prices to rise. The company’s orders have not been affected, she added.
The government said that it was closing the factories to test and quarantine workers in the Klang area, where Malaysia’s Health Ministry has reported a sharp increase in coronavirus cases since last week. Out of 5,777 people screened in the Klang area, there were 4,036 total infections, the Health Ministry said according to the report.