EMCO imposed on Top Glove’s workers’ dormitory

TOP Glove Corp Bhd’s workers dormitory in Meru, Klang will go under an enhanced movement control order (EMCO) following a detection of 215 COVID-19 cases there.

According to Defence Minister Datuk Seri Ismail Sabri Yaakob, the EMCO which also affects roads surrounding the dormitories, will take effect from tomorrow (Nov 17) until Nov 30.

Ismail Sabri noted that while Top Glove’s factories would remain open for now, the glove maker has been asked to screen all its factory workers and those living in the dormitories.

A total of 13,190 workers and nearly 1,200 of the area’s residents are affected by the EMCO, according to Ismail Sabri.

“The EMCO will be implemented in the men’s dormitory and in Jalan Abadi 1A/QU8, the women’s dormitory, Jalan Abadi 1A and Jalan Abadi 10A/KU8,” he told his daily media briefing.

Ismail Sabri said the EMCO’s implementation in the area will enable the Health Ministry to carry out targeted screenings of workers and residents in the area.

Top Glove’s facilities in Meru have been linked to the Teratai cluster which reported 53 new cases yesterday, bringing the total number of infections in the cluster to 214.

Recall that in a media statement on Nov 5, Top Glove revealed that 17 of its employees tested positive for COVID-19 after undergoing swab tests on Nov 2. The employees which the research house understood to be asymptomatic have been admitted to hospital for treatment.

In a research note dated Nov 6, CGS-CIMB Research estimated that Top Glove’s factories in Klang contribute up to 50% of its total current production capacity (90 billion pieces annually).

“We expect minimal impact on our FY2021-2023 earnings per share (EPS) forecasts. This is based on currently available information which includes the statement by Top Glove that it does not foresee any impact on its operations,” wrote analyst Walter Aw in a company update.

“However, our view is based on the assumption that the situation does not worsen such as a sharp increase in the number of confirmed COVID-19 cases among its workers.”

In the event that this happens, CGS-CIMB noted that it would not discount the possibility of a potential disruption to the company’s operations in Klang.

Currently, Top Glove has a total workforce of 21,000 people, of whom an estimated 8,000 (38%) are based in Klang, according to the research house.

At the close of today’s trading, Top Gloves was down 58 sen or 7.46% at RM7.20 with 79.75 million shares traded, thus valuing the company at RM59.01 bil. – Nov 16, 2020

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