September 10, 2021

Top Glove shares jump after US revokes import ban over alleged forced labour

By ellen

KUALA LUMPUR (REUTERS, BLOOMBERG) – Malaysia’s Top Glove Corp said on Friday (Sept 10) it has been allowed to resume sales to the United States, after customs authorities lifted a year-long ban imposed for alleged forced labour found at the world’s largest medical glove maker.

The US Customs and Border Protection (CBP) had banned gloves made by Top Glove in July 2020, saying it had found abuses of migrant workers, including debt bondage, in the production process.

Top Glove, which is dual-listed in Malaysia and Singapore, said in a statement its disposable gloves would be admissible at all US ports of entry as of Sept 10.

Its shares jumped after the announcement. In Singapore, the mainboard-listed counter surged eight cents, or 7.1 per cent, to $1.20 as at 10.14 am.

“We believe that the removal of the ban would boost Top Glove revenue, which have suffered since shipments by Top Glove’s Malaysia to the US halted temporarily,” Tan Kong Jin, an analyst at  TA Securities, said in a note on Friday.

Sales from North America at Top Glove dropped to 8 per cent during its fiscal third quarter ended May from 23 per cent in the second quarter, according to Mr Tan. 

The company cited a CBP notice filed to the US Federal Register, saying the customs agency had determined upon additional information that Top Glove’s products were no longer being produced by forced labour.

The notice is available on the Federal Register website. The CBP was not immediately available for comment outside US business hours.

Top Glove said in April it had resolved all eleven indicators of forced labour as determined by the International Labour Organisation, citing a report by independent consultant Impactt Limited.

The world’s largest medical glove maker has taken a hit to reputation and business from the US shipping ban. Its glove production in Malaysia has dropped, and a plan to list its shares in Hong Kong delayed.

Reuters reported in June that Top Glove’s plans to raise up to US$1 billion in the Hong Kong offering was delayed because of the ban. Top Glove said last month it planned to renew a lapsed application to list in Hong Kong.