Malaysia’s Top Glove Says Supply Shortage May Increase Price of Gloves

The world’s top producer of rubber gloves said on Wednesday that the price of protective medical gloves may increase due to a production shortfall following the shutdown of more than half of its plants due to a huge coronavirus outbreak among workers.

More than 2,000 global customers of Malaysia’s Top Glove will also see shipments delayed by at least two weeks, executive chairman Lim Wee Chai said, about the disruption in delivery of medical gloves that are crucial to healthcare providers during the COVID-19 pandemic.

“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," Lim said at a virtual news conference on Wednesday.

“The closure of the factories is expected to cause a delay of up to two weeks for the delivery of gloves to customers.”

On Monday, the government ordered Top Glove to suspend operations, in stages, at 28 of its plants, which employ around 11,200 people, after close to 3,000 coronavirus infections were detected among its workers.

Meanwhile, the Malaysian Rubber Glove Manufacturers Association, or MARGMA, said on Wednesday that the Top Glove shutdowns would not affect the supply of gloves.

“Be assured that new capacity is available to make good the interim shortfall and that there is not going to be any aggravated disruption,” MARGMA said.

Malaysian companies produce 65 percent of the world’s rubber gloves. Top Glove supplies a little over a quarter of the world’s latex gloves, or 90 billion rubber gloves annually.

The coronavirus pandemic greatly increased demand and profits. Top Glove’s fourth-quarter net profit for the three months ending Aug. 31, 2020 rose to 1.33 billion ringgit from 74 million ringgit a year earlier, an 18-fold rise.

With a vaccine for COVID-19 on the anvil, robust demand for rubber gloves will continue.

“Seven billion pairs of gloves are needed to inject the vaccine. Each person requires two doses of the vaccine, so that’s 14 billion pairs of gloves needed. Business is good,” Lim said.

‘Conditions are terrible’

Still, Top Glove’s operations are under a cloud after more than 2,684 coronavirus infections were linked to the company’s workplace clusters in its factories in the city of Klang near Kuala Lumpur as of Wednesday, according to health ministry data.

The health ministry said that infections from Top Glove facilities in Klang have also spread to surrounding areas. On Wednesday, the country reported 970 new cases, taking the total infections to 59, 817, according to the health ministry.

The company said the high number of cases was a result of mass testing conducted Monday through Wednesday.

M. Saravanan, Malaysia’s human resources minister, thinks otherwise.

The minister, who recently visited some Top Glove factories and workers’ dormitories, told a Malaysian newspaper this week that housing conditions there were subpar.

“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 workers colony. If we don’t act, this cluster might get out of control,” Saravanan told The Star, in an article published on Wednesday.

“The Labor Department will ensure the employers are held responsible for worker conditions and dire action will be taken according to the law. …We are not merely sending a team to check on the conditions at Top Glove. It will be the entire Labor Department.”

As it is, the United States in July blocked imports of rubber gloves from Top Glove, citing “reasonable evidence” of forced labor at its factories.

Now, the coronavirus outbreak at Top Glove facilities has prompted Malaysia’s human resources ministry to begin enforcing the new amendments to the Workers’ Minimum Standards of Housing and Amenities Act 1990 as soon as from Thursday.

The amendments mandate employers to provide workers a minimum living space and safety and hygiene standards at their accommodations.

“The human resources ministry today informed the National Security Council’s meeting that enforcement will begin tomorrow, and they will make sure the Act is followed by all employers and industries,” Ismail Sabri Yaakob, Senior Minister for Security, said in a daily COVID-19 briefing on Wednesday.

“Those who commit an offence by not providing proper housing can be fined 50,000 ringgit (U.S. $12,217) per worker, which means, if there are 10 workers, the employers could be fined 500,000 ringgit (U.S. $122,175).”

Top Glove said on Wednesday it would ask the human resources ministry what it found wanting in the company’s housing facilities.

“We need to clarify with the Ministry to see what the areas we did not do correctly and how we can improve,” said Top Glove managing director K.M. Lee.