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Top Glove: Continued freeze on foreign workers will worsen glove shortage

KUALA LUMPUR, July 12 — The Covid-19 pandemic is still raging outside Malaysia’s borders, which caused an increased demand for rubber gloves — something the world’s largest glove company is only too happy to meet, except that they are currently short of workers.

Malaysia imposed travel restrictions into the country beginning in March with the movement control order (MCO) in a bid to contain Covid-19.

While the restrictions have been eased as the number of cases dropped, the government recently announced it was suspending the intake of new foreign workers till the end of the year, while encouraging companies to hire more Malaysians.

But Top Glove chairman and founder, Tan Sri Lim Wee Chai, told Bernama that expecting only locals to fill the vacancies was unrealistic, and would reduce Malaysia’s competitiveness.

He said they had hired 2,500 local staff and workers last year, which form part of the company’s 19,000-strong workforce globally.

Despite their recruitment efforts, the current workforce was not sufficient to meet the demand for gloves, which has increased dramatically due to Covid-19.

“Before Covid-19, we were running (at) about 80 to 85 per cent capacity. Now we are running more than 100 per cent. Though we add in new capacity, we are still not able to cope with the demand; the demand is just too strong,” he said.

“So we hope the government will open up (the recruitment process) so that we can reduce the shortage of workers. So hopefully, by Sept 1, after the MCO is over.”

According to the company, the lead time to fulfill orders for gloves was now more than a year — which means if someone ordered gloves today, it would take over a year before the shipment arrives at its destination. Prior to the pandemic, the lead time was between 10 to 60 days.

Bernama contacted the Human Resource Ministry for comment but did not immediately get a response.

Andy Hall, an independent British migrant worker and labour rights activist, was unsurprised the company was asking the government to allow more foreign workers in.

“It’s hard work in a hot and sticky environment, so not many locals want to work there. Locals come for a short while and leave. (Foreign workers) are willing to work harder for less money and it’s not a good thing,” he said.

“If they want more workers, great; but give more incentives and protections,” he added.

Top Glove has been the subject of several news reports alleging labour rights violations, including a recent one by Channel 4, a TV news channel in the United Kingdom, accusing the company of excessive overtime, illegal salary deductions and unethical recruitment practices among others. The company characterised the Channel 4 report as “highly inaccurate.” Other rubber glove companies in Malaysia have faced similar scrutiny.

When asked, Lim acknowledged the company had made some mistakes and said the company rectified them as best as they could.

He added that workers take home at least RM1,600, which is above the minimum wage in Malaysia, are compensated according to time worked and seniority, and in accordance with local labour laws. The company also provides free healthcare and subsidised meals to their staff and workers.

Hall agreed the company had made some progress in addressing some of the concerns, but said there were still many areas that need fixing.

“Their social compliance is getting better,” he said, citing the company’s announcement they will be reimbursing their workers’ recruitment fees as an example. “The pressure is working.”

According to news reports, Top Glove has been investing billions of ringgit in automation to address the shortage of foreign workers. This expansion is expected to add 42 production lines to its present 700 by the end of the year. However, it is unlikely to be enough to speed up the delivery time to their customers for now.

Top Glove rubber, latex and nitrile gloves are used in the healthcare, food and beverage, and sanitisation industries. The company also produces face masks, condoms, exercise bands, toothpaste and other healthcare or health-oriented products. According to the company, its market share is 26 per cent, and Top Glove has an annual capacity of 78.7 billion gloves.

Due to heightened demand for personal protective equipment (PPE), which includes gloves, amid the coronavirus pandemic, the company recorded a profit of RM575 million by May. In January, before the start of the pandemic, Top Glove was trading at just below RM5 on Bursa Malaysia, but has since jumped to above RM20.

Record profits have also lifted Lim’s net worth from US$1.2 billion to US$4.4 billion, making him the 1,613th billionaire on the Forbes Billionaire Index. — Bernama

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