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KUALA LUMPUR: Top Glove Corporation Bhd
, whose factories in Klang have been affected by the Covid-19 pandemic, has increased production outside of Klang to meet customer demand.
According to AmInvestment Research, the world’s largest glove maker, held a briefing with analysts on Tuesday about the closure of its 28 factories in Meru, Klang for the detection of Covid-19.
So far, 5,767 workers have been examined and 2,534 are positive cases. Covid-19 positive workers have been sent to hospitals while the rest are in quarantine.
AmInvest Research said that according to Top Glove, of the 28 factories, 20 are glove production facilities with an estimated capacity of around 45 billion pieces per year.
“Management noted that of all the glove production facilities in Klang, only 10% of them are operational due to a labor shortage,” he said, hence the focus on increasing their production in factories outside of Klang.
Top Glove had also reduced its dependence on foreign workers and has been employing local workers since March 2020.
Of the 13,700 workers in Malaysia now, around 2,000 are local workers. The company plans to increase the hiring of local workers to overcome the labor shortage.
“Top Glove has not disclosed the monetary loss resulting from this closing. However, based on our rough estimates, assuming that 20 of the 36 glove production factories operating in Meru, Klang are closed for two weeks, the total impact on Top Glove’s revenue will be around 2%, which will not is significant.
“We are not making any changes to our earnings forecast at this time. However, we will monitor closely to assess the total loss and will adjust our figures accordingly once the official figures are announced.
“Hold Hold with an unchanged fair value of RM7.88 per share based on a five-year average price-earnings ratio of 28 times,” AmInvest Research said.
At 3:16 p.m., its share price dropped 50 sen to RM6.85 with 62.13 million shares made.
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