© Reuters. FILE PHOTO: An epidemiologist is holding gloves while arranging care for the Harborview Medical Center homeview team as he prepares to visit the home of a person who may be at risk from a novel coronavirus at Harborview Medical Center in Se
By Liz Lee
KUALA LUMPUR (Reuters) – Malaysia Top Glove Corporation Bhd (KL :), which produces one in five gloves worldwide, expects a product shortage as demand from Europe and the USA exceeds its capacity due to the increasing outbreak of the coronavirus.
The company has extended delivery times to meet the surge in demand, CEO Lim Wee Chai told Reuters on Friday over the phone.
According to Lim, orders received mainly from Europe and the United States in the past few weeks have been almost twice the company's production capacity. Top Glove can produce 200 million natural and synthetic rubber gloves every day.
There are now more than 600,000 coronavirus cases in 202 countries and territories worldwide, with the United States overtaking China as the country with the most infections. Europe continues to report the largest number of deaths.
“Some customers panic. Usually they order 10 containers a month, but now they suddenly increase to 20 containers, ”he said.
The World Health Organization warned on Friday that the "chronic global shortage of personal protective equipment" is one of the most pressing threats to efforts to contain viruses.
"In any case, there is a lack. You order 100% more, we can only increase 20%, so there is a deficiency of around 50% to 80%, ”he said.
The extraordinary buying momentum could continue for another three months, but orders are expected to remain strong for up to nine months, even though demand from Asian markets has slowed slightly, Lim said.
To cope with this, the company has adjusted its delivery time from just 30 days to up to 150 days.
According to Lim, the company ensured that all customers received a reasonable share of additional gloves.
“We manage their volume and limit them to buying as much per customer. We have to do it, but it is a good problem that we have to solve, ”he said.
According to Lim, the company adds new machines every week and could increase its production by up to 30%.
This month Top Glove has increased its factory utilization by 10% to 95% and expects to reach nearly maximum utilization in April.
The company hurries to find around 1,000 employees to keep up. Top Glove normally hires from Nepal but is now moving workers from Malaysia due to travel restrictions.
“We need about 10% more workers. During these (travel restrictions) we cannot hire workers from Nepal. So we have no choice, we have to employ some local workers to help, especially with packaging. "
Top Glove said its supply chain is well diversified and optimistic that there will be no material procurement issues in the next few weeks. Malaysia has given some manufacturers in the essential goods sectors permission to continue working under certain conditions during the country's April 14 closure.
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