Author: gloveharicut   |   Latest post: Tue, 24 Nov 2020, 11:46 AM


Are Malaysian GLOVES losing the US market on labour issues?

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Are Malaysian glove makers losing the US market on labour issues?


KUALA LUMPUR (Oct 15): While Top Glove Corp Bhd has yet to resolve its labour issue with the US Customs and Border Protection (CBP), the US Department of Labour (DOL) has now put Malaysian-made rubber gloves on the list of products that use child or forced labour.

This raises the question as to whether Malaysian glove makers are losing the sizeable US export market as a result.

Investment analysts, however, shrug off any such concern, pointing to the continuous strong demand for gloves with the ongoing pandemic, even though the US is a sizable market to the glove manufacturers.

The DOL recently released its updated 2020 List of Goods Produced by Child Labor or Forced Labor at the end of last month. In addition to three other categories already on the list, namely electronics, garments and palm oil, this makes rubber gloves the fourth item to be added to the list under Malaysia.

According to a local analyst, he says there is no near-term impact on Malaysian glove makers, other than bad publicity.

Still, the inclusion on the list of using child labour or forced labour may be another blow to the industry after Top Glove and WRP Asia Pacific Sdn Bhd were put on the CBP’s detention list on allegations of forced labour, preventing imports of their products into the US.

WRP’s ban has since been lifted in March. Meanwhile, Top Glove says it will pay RM136 million over the next 10 months to compensate its migrant workers as part of its efforts to resolve the issue, higher than its previously estimated sum of RM53 million. Nonetheless, the world’s largest glove maker has yet to resolve the issue after more than three months. 

According to Malacca Securities Sdn Bhd head of research Loui Low, he believes the news of the report is just a recycling of old facts, but notes that it could have some negative trading interest on glove stocks today.

Most of the big four glove stocks, whose share prices have soared sky-high this year, backed by the strong global demand for disposable rubber gloves and hike on average selling prices, dominated Bursa’s top losers this morning.

Top Glove opened to a high of RM9.60 this morning before falling as much as 37 sen to a low of RM9.23. It settled at RM9.34 at noon break.

Kossan Rubber Industries Bhd dipped 12 sen or 1.5% to RM7.86. Supermax Corp Bhd was also down by 14 sen or 1.32% to RM10.50. Hartalega Holdings Bhd, on the other hand, only fell 10 sen or 0.55% to RM18.06.

Low says the list is likely to add pressure to glove companies such as Top Glove, whose largest export market is the US and Canada with a combined 27% out of 195 export markets.

At the same time, other countries also need rubber gloves, no thanks to the Covid-19 pandemic.

In the report by DOL, it claimed that forced labour in Malaysia occurred among adults, predominantly by an estimated 42,500 migrant workers from Bangladesh, India, Myanmar, and Nepal who are employed in more than 100 rubber glove factories.

“Workers are frequently subject to high recruitment fees to secure employment that often keeps them in debt bondage; forced to work overtime in excess of the time allowed by Malaysian law; and work in factories where temperatures can reach dangerous levels. Additionally, labourers work under the threat of penalties, which include the withholding of wages, restricted movement, and the withholding of their identification documents,” the report said.

Such transgressions satisfy the International Labour Organisation’s forced labour indicators.

While the list contains no punitive actions, it is meant to serve as a catalyst for strategic and focused coordination and collaboration to address the issues of forced labour and child labour, it said.


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wkc5657 If that is so, then please USA, show your MAGA power and altruism.

Buy up topglove up, pretty good ante for your presidential bid. You fully secured in perpetuity your glove requirement for good. And you can "reform" the process and industry standards to newer heights. Show the glove industry what is the best hiring practices while keeping costs in control.

Costs you about US$25B only....super small change to you right??!!
15/10/2020 3:22 PM
stocktrade101 It always come down to US vs. China game. Let say Malaysia decides to side with the US you can be sure the detention will be lifted immediately and TG doesn't even have to compensate those workers. US is just a hypocrite.
16/10/2020 9:17 AM
pBlue @stocktrade101 It is the American way. The US has the working homeless. Ie they pay people so little that they cannot afford to rent a room, and have to live on the street or in their car. Also since the US doesn't believe in cooperate responsibility said company doesn't even provide housing.
16/10/2020 11:36 AM
cincaila eee, @stocktrade101 then if like this, on the basis on picking a business partner, China would look more like a better option. Under USA's influence/jealous, none of their ally can perform better than them. Cant have a jealous leader as the head of a pack, the pack will eventually die of internal conflict.
16/10/2020 4:57 PM
cincaila None of their ally can perform better than them.
Correction: none of their ally are allowed to perform better than them.

such situation are often seen in companies dying due to office politics. Like those controlling managers that steal their subordinates proposal and ideas and claim as theirs. Everything has to prioritise the manager etc etc. If we really need to pick one side then better avoid this sinking ship.
16/10/2020 5:00 PM

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