Only 3% annual revenue lost from closure of 28 factories, says Top Glove

Only 3% annual revenue lost from closures of 28 factories, says Top Glove

Only 3% annual revenue lost from closures of 28 factories, says Top Glove

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KUALA LUMPUR (Nov 24): Top Glove Corp Bhd estimates its annual revenue for the financial year ending Aug 31, 2021 (FY21) will drop by only 3% as a result of the temporary closures of its 28 factories in Klang due to the outbreak of Covid-19 in its worker dormitories.

In response to a query from Bursa Malaysia on the factory closures, the world's largest rubber glove maker announced that 16 facilities in Meru, Klang have temporarily stopped production since Nov 17.

However, the group explained that each facility would be able to resume operations in stages after the balance of employees are tested and the sites are sanitised.

Top Glove shares were under selling pressure after the news on factory closures. The stock slid 7.48% or 55 sen to RM6.80 today, valuing it at RM5.73 billion. Roughly RM12.52 billion in market capitalisation has been wiped out from the darling glove stock in the past three weeks.

"We are now working with the relevant authorities for an orderly screening process to ensure reopening of the facilities with our employees' health and safety [given the] utmost importance. Only the employees cleared of Covid-19 will be allowed to resume work at our facilities.

"The balance 12 facilities are currently operating at about 20% capacity and will be temporarily closed in stages for employee testing and full-site sanitisation before reopening," said Top Glove.

It added that the impact from the temporary closures is expected to result in some delay in its delivery schedule, with a forecast of two- to four-week delays. It does not see any penalties resulting from the delays materialising.

It noted that the 28 facilities in Meru, Klang represent 50% of its total production capacity.

"As a mitigation measure, the company has rescheduled production plans for those non-affected facilities to produce those very urgent orders," it added.

The Teratai cluster, which originated from Top Glove's worker dormitories in Klang, detected 1,511 new confirmed Covid-19 cases today. Active cases from the cluster surged to 3,835 from 2,359 yesterday.

To date, some 5,777 individuals in the cluster have been screened, and 4,036 positive cases have been detected so far.

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Kathy Fong