Malaysia’s Top Glove Awaits US Customs to Verify Labor Corrective Actions
Top Glove Corp Bhd (TPGC.KL), which is subject to an import ban into the United States due to concerns over forced labor, waits for customs authorities to verify corrective actions taken regarding recruitment fees workers, the Malaysian company said on Wednesday.
The world’s largest manufacturer of medical gloves did not know when U.S. Customs might lift the ban on its products, but verification of remediation payments is underway, chief executive Lee Kim Meow said.
“We don’t have a given timeframe, but we have done our best,” he said during a results briefing, adding that Top Glove was in close liaison with customs and hoped he there would be no more problems.
In April, Top Glove said it had addressed all signs of forced labor in its operations, a step verified by London-based ethical trade consultant Impactt Limited.
The company said removing the ban will boost sales, which have suffered since shipments to the United States were temporarily halted in its third fiscal quarter.
A 68% reduction in sales in North America was the main reason for lower volumes from the previous quarter, he said.
The North American market only accounted for 8% of sales in the March-May quarter, compared to 23% in the previous period. Total sales volume fell 9% from a year ago, the company added.
“Nonetheless, global demand for gloves remains resilient as use continues to increase, driven by the ongoing pandemic,” he said.
U.S. Customs and Border Protection (CBP) asked the country’s ports to seize Top Glove’s goods in March, after banning the importation of its products last July, citing evidence of forced labor practices in the countries. production facilities across Malaysia. Read more
Top Glove shares closed 1.3% higher on Wednesday. They have fallen by more than 20% this year.
U.S. action also blocked Top Glove’s pursuit of a billion dollar listing in Hong Kong, as potential investors raised concerns about the impact, Reuters reported. Read more
Top Glove, which has a net cash position of 4.23 billion ringgit, said regulators are reviewing its listing process and working closely with advisers.
“Enrollment in Hong Kong is for the longer term,” said Executive Chairman Lim Wee Chai. “(The CBP ban) caused us a delay in Hong Kong, (but it) is only temporary.”
Top Glove reported a 485% jump in third-quarter net income on Wednesday, benefiting from strong demand for gloves during the pandemic.
It had posted a record profit for the previous four consecutive quarters, supported by greater use of gloves for hygiene reasons.
A stock market filing showed net profit for the period jumped to 2.04 billion ringgits ($ 495.63 million) from 347.9 million a year ago. UBS had forecast a profit of 2.54 billion ringgit, according to data from Refinitiv.
Its turnover increased 147% to 4.16 billion ringgits.
Top Glove, which produces 100 billion pieces of gloves per year, said average selling prices fell over the period from the peak in February and made adjustments based on price trends of the market.
($ 1 = 4.1160 ringgits)
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