Top Glove expects to resolve US import ban issue by year end

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KUALA LUMPUR (Sept 17): Top Glove Corp Bhd said it expects to resolve the detention order imposed by the US Customs on its subsidiaries by the end of this year.

Currently, the group is still engaging with the US Customs and Border Protection (CBP) to lift the Withhold Release Order (WRO) that was imposed in mid-July, following allegations of forced labour and that the matter is progressing well, said Top Glove executive chairman Tan Sri Dr Lim Wee Chai. 

“We believe it will be settled very soon. We estimate it can be before the end of the year. [In fact] we believe it should be settled within a month, but this is only our estimate,” Lim told a virtual press conference held in conjunction with the group's announcement today of its latest quarterly and full-year financial results.

The North American market remains the group’s largest market, accounting for 22% of its sales volume for the financial year ended Aug 31, 2020 (FY20), though sales volume to the market has fallen 6.5% in FY20 compared with FY19, due to the import ban.

Nonetheless, the group said there has been no impact to its overall revenue and profit due to the strong demand for its products globally, and the long lead time for the delivery of orders it received from other countries.

For example, it said sales quantity in Asia ex-Japan has jumped 53.8% year-on-year, followed by the Eastern Europe market 29.5% y-o-y increase and the Japan market's 29.1% y-o-y growth. 

The import ban was placed on Top Glove's subsidiaries, Top Glove Sdn Bhd and TG Medical Sdn Bhd on July 15.

On Sept 7, Top Glove said it had submitted an audit report to the US CBP in relation to the alleged forced labour issue filed against the glove maker. The report, according to the group, was prepared by an independent consultant and entailed virtual interviews of about 1,100 of the company’s migrant and local workers in various locations.

Last month, the group said it would pay an estimated remediation sum of RM53 million to its foreign workers, subject to finalisation with the US CBP, to resolve the matter. 

Today, Top Glove said it has made two remediation payments of RM4.4 million each to the migrant workers who were employed by the group before 2019, on Aug 10 and Sept 10. 

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Tan Choe Choe