KUALA LUMPUR (July 16): Top Glove Corp Bhd said that the two subsidiaries that have been placed under detention order by the US’s Customs and Border Protection (CBP) accounted for 12.5% of its total sales.

The two subsidiaries affected are Top Glove Sdn Bhd and TG Medical Sdn Bhd.

The US is a major market, which accounts for about 25% of the total Top Glove's sales volume.

The company’s executives held an analyst-cum-media briefing this afternoon after the news broke on Top Glove’s shipments being detained by the US Customs on July 15.

When asked about the likelihood of CBP imposing detention orders on other Top Glove subsidiaries, the management did not rule out the possibility, noting that it is the decision of CBP.

“Only two for now, the rest is up to them (CBP),” said Top Glove’s executive chairman Tan Sri Lim Wee Chai, who is also the company’s single largest shareholder.

Top Glove expects the two subsidiaries’ shipments to be detained at the US Customs for about two to four weeks, depending on the settlement.

The world’s largest glove maker, whose share price plummeted after the news, is confident of resolving the issue with the CBP in two to four weeks' time.

Once the issue is settled, the shipments detained can be released, according to analysts who attended the briefing.

Top Glove shrugged off the concerns, pointing out that it could still sell the gloves to the US market through its other subsidiaries.

In a worst-case scenario, Top Glove said the stock can be shipped to other countries, highlighting that the demand is also strong elsewhere, like in Latin America.

In terms of average selling price, Top Glove disclosed that it would be lower in other countries, a differential of 5% for normal orders. The price for spot orders are the same across the board.

Meanwhile, Top Glove attributed the only cause of this detention order could possibly be linked to the retrospective payment of recruitment fees by the group’s workers to agents prior to January 2019.

Top Glove said it has already been bearing all recruitment fees when its zero recruitment fee policy was implemented since Jan 2019.

The reimbursement is estimated to be in the range of RM20 million to RM50 million for those foreign workers who arrived in Malaysia two to three years ago.