KUALA LUMPUR (Nov 15): Supermax Corp Bhd has clarified that the pause in the imports of its products by Canada is limited to purchases by the government.
In a statement, the glove maker said the government contract is on hold, pending submission of the audit report prepared by an independent auditor.
“Currently, a US-based independent auditor is conducting the site audit and the report would be available for submission sometime in the fourth week of November,” the group said in response to a media report titled "Canada pauses imports from Supermax over forced labour concerns".
Supermax said it has been embarking on its undertaking to meet the International Labour Organisation (ILO) standards on migrant workers since 2019.
“Supermax is surprised that due consideration has not been given to the fact that corrective steps have started and improvements made to labour welfare.
“We will speed up the process to come to meeting the ILO standards,” it added.
According to the statement, Canada represents about 9% of the group’s total market share, and it fluctuates each year based on tender awards.
“The duration of the withholding of contract would also determine the extent of the adverse financial impact. However, the company does not foresee any material impact operationally.
“All other personal protective equipment (PPE) products such as surgical face masks, glove imports from other suppliers, gowns and dental products which Supermax Canada is doing are not affected. Business operations on other PPEs are running as usual,” the group said.
According to the media report by Reuters on Sunday (Nov 14) that Canada has paused imports from Supermax, weeks after the US barred the firm over allegations the company uses forced labour.
Canada's Public Services and Procurement Department said on Nov 10 that it was holding Supermax deliveries, as it awaits a report expected mid-month from Supermax's anadian unit.
"In light of the current situation, Canada has engaged with the company to seek assurances that Supermax Corp is not engaging in forced labour practices," the department said in a statement.
The Canadian government said it will determine its next steps, after reviewing the report from Supermax Heathcare Canada.
Prior to that, on Oct 21, the US Customs and Border Protection issued a "Withhold Release Order" that prohibits imports from Supermax, based on reasonable information that indicates the use of forced labour in its manufacturing operations.
For the financial year ended June 30, 2021, Supermax's net profit grew 626.6% to RM3.81 billion or 147.88 sen per share, from RM524.8 million or 20.08 sen per share in the previous year. Revenue rose 236.06% to RM7.16 billion, from RM2.13 billion.
Shares of Supermax rose 6 sen or 3.24% to close at RM1.91 on Monday (Nov 15), giving the glove maker a market capitalisation of RM5.2 billion.