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Top Glove expects to overcome challenges quickly

PETALING JAYA: Top Glove Corp Bhd does not expect order cancellations from its customers as a result of delays in delivery due to its reduced operations.

The group has informed its customers that some deliveries from its plants in Klang, Selangor would be delayed by two to four weeks.

According to Top Glove executive chairman Tan Sri Lim Wee Chai, should there be any order cancellations, it will be “a very small amount.”

“Our customers know that we will be able to quickly overcome this challenge. We still have other manufacturing facilities in Vietnam and Thailand, and will prioritise deliveries for our customers that are in the essential services line, ” he told a virtual press briefing yesterday.

Lim added that it was unlikely that the group would outsource its orders, given that other glove factories are also experiencing good demand.

Top Glove’s facilities in Meru, Klang are affected by the two-week enhanced movement control order (EMCO), which began last Tuesday.

The temporary halt in operations was to facilitate Covid-19 screenings for all its workers at the site.

It is expected that the temporary closure will cause a 3% dent to Top Glove’s sales for the financial year ending Aug 31,2021.

“To date, about 7,000 of Top Glove employees, both local and foreign, have been tested for Covid-19,

“From the figure, an estimated 3,000 employees have been tested positive, ” said Lim, who expected the EMCO at the group’s facilities to run for two to three weeks.

This is given that other large premises have observed the EMCO for one to two weeks.

Top Glove has a total workforce of about 21,000 employees, of which 11,000 are foreign workers.

Approximately 500 of Top Glove’s workers have been discharged from the hospital

Following that, the 500 workers have been isolated at designated hotels for the requisite number of days.

On the company’s recent share buyback exercise, he said it was a good management recommendation to buy the shares.

The group’s net cash position stands at RM2bil, after spending an estimated RM1bil in share buy backs over the last three months.

“We estimate that Top Glove’s dividend yield will be more than 6% in the current financial year, as the company is expected to do well in line with the demand for rubber gloves.

Top Glove closed 15 sen or 2.2% lower to RM6.65 yesterday.

https://www.thestar.com.my/business/business-news/2020/11/26/top-glove-expects-to-overcome-challenges-quickly

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