SINGAPORE -- Malaysia's Top Glove, the world's largest maker of rubber gloves, had imports of its products blocked by U.S. customs authorities, the company said Thursday, in what appears to be an action prompted by allegations of labor abuse.
The Malaysian stock exchange halted trading of Top Glove shares in response to a detention order by U.S. Customs and Border Protection. The company is also traded on the Singapore Exchange, where its shares ended down 11%.
"There is a possibility this may be related to foreign labor issues which we have already resolved, save for one more issue with regard to retrospective payment of recruitment fees," Top Glove said in a statement.
The company said it was reaching out to U.S. customs officials for further details, and aims to resolve the issue within two weeks.
Roughly 11,000 out of the 13,000 workers at Top Gloves factories come from outside Malaysia. Working conditions at these plants have come under scrutiny after British broadcaster Channel 4 reported on the exploitation of foreign workers there last month.
Top Glove on Thursday stressed that most of its issues with foreign workers have already been resolved. It is now working to repay the 20 million ringgit to 50 million ringgit ($4.68 million to $11.7 million) these workers paid as recruitment fees in the past.
Top Glove has experienced a surge in demand for its latex gloves as the coronavirus outbreak spreads across the world. It logged 575 million ringgit in net profit in the nine months through May, beating its full-year record in just three quarters. Its share price had also grown more than five times at one point from the beginning of the year.
North America is Top Glove's largest market, accounting for 24% of total sales. Orders from the U.S. have increased 150% since before the pandemic.
But U.S. and European authorities and consumers are sensitive to the issue of worker exploitation. Should the current problem drag on, Top Glove could suffer a heavy blow to its earnings.
