Top Glove shares drop as worker hostels put under strict lockdown

The share price of Top Glove, the world’s biggest producer of medical gloves, slumped on Tuesday, after the Malaysian government imposed a strict lockdown on thousands of workers living in company-run dormitories to the west of Kuala Lumpur.

The authorities imposed the two-week lockdown after 215 coronavirus cases emerged in one of the hostels in Meru, about 40km west of the capital and close to Top Glove’s factories.

The curbs, during which the health ministry will undertake targeted screening, came into effect on Tuesday and also involves nearly 1,200 people living nearby. The company said in a statement on Tuesday that 5,700 workers – about a fifth of its workforce – were affected. The company’s stock dropped nearly 10 percent in early trading on the Kuala Lumpur Stock Exchange.

“[The lockdown] will allow the Health Ministry to continue targeted screenings on workers and residents in the area,” Senior Minister of Security Ismail Sabri Yaakob said at a media briefing on Monday.

He also urged the company to screen all its factory workers and its other dormitories.

Top Glove, which has about 21,000 staff and operates 41 factories in Malaysia, said it had cooperated closely with the district health office and local police during a visit on Sunday and that “the majority of the affected workers are asymptomatic and do not have symptoms like fever or any sickness”.

It said it was seeking clarification about the implementation of the curbs and would continue to observe procedures put in place to hinder the spread of the virus.

“Disinfection exercises at our premises and accommodation are also conducted regularly, with all the necessary precautionary measures strictly in place,” the statement said.

Last week, Top Glove introduced more rigorous disease control and prevention measures to curb the spread of COVID-19 and said it was restricting its employees to only the most essential movements. It has also established “isolation houses” for those under quarantine, it said.

The Meru factories remain in operation with “reduced capacity” and workers not under the lockdown remain at work in alignment with Ministry of Health guidelines, it said.

Top Glove first confirmed 17 employees tested positive for the virus almost two weeks ago. Malaysia has been battling a resurgence of coronavirus cases that began in September in the Borneo state of Sabah. Much of the country is now in a state of partial lockdown.