Glove maker Kossan to cut capacity after reported Covid-19 outbreak

KUALA LUMPUR (Reuters): Malaysian glove maker Kossan Rubber Industries Bhd will see production capacity reduced by nearly 25% for two weeks after 427 workers tested positive for Covid-19, media reports and analysts said.

Kossan is the latest manufacturer of medical gloves in the Southeast Asian country to be hit by the pandemic in recent weeks.

Top Glove, the world's largest glove maker, became the site of Malaysia's biggest virus cluster after more than 5,000 workers were infected. Smaller rival Hartalega has also reported cases.

The latest outbreak was reported at one of Kossan's six facilities after a total of 7,004 workers were screened, Kuala Lumpur-based Kenanga Research said in a note, citing a company briefing to investors and analysts on Tuesday (Dec 15).

The factory has since been shut for sanitisation, while its remaining 1,667 workers who tested negative are undergoing quarantine, Kenanga and three other research houses said.

Confirming the reports, Kossan founder Lim Kuang Sia told The Edge Markets the outbreak was likely to impact less than 2% of the group's bottom line.

"The impact on production is only for two weeks (starting from Dec 4)," the financial news site quoted Lim as saying.

Representatives of Kossan did not immediately respond to requests by Reuters by phone and email for comment.

Affin Hwang Capital said Kossan had voluntarily shut down close to 25% of its production capacity for two weeks following the outbreak, with operations expected to resume on Dec 20.

Kossan also planned to test 20 percent of its workers every two weeks as a precaution going forward, the research houses said. – Reuters

(Reporting by Rozanna Latiff Editing by Ed Davies)