427 Kossan workers at Meru facility infected with Covid-19

 

COVID-19 | Some 427 employees at glove maker Kossan Rubber Industries Bhd have tested positive for Covid-19.

However, all the workers, including eight Malaysians, were asymptomatic, the company said in a briefing to investors.

The cases were detected through the screening of some 7,000 workers from Dec 4 to 10, RHB Research reported in a note.

According to TA Securities Research, the affected Kossan facility in Meru, Klang was temporarily closed upon detection of Covid-19 cases and has been sanitised accordingly.

The facilities will resume operations in stages starting Dec 20, it added. 

Yesterday, Malaysiakini reported that Kossan had confirmed there were infections in its facilities but declined to reveal the number of cases as its testing exercise would only conclude on Dec 18.

It is the fourth public-listed glove manufacturer to be hit by Covid-19 infections, after Top Glove, Hartalega and Careplus.

Staff members who had close contact with those infected at Kossan have been isolated and due to undergo a second test on Dec 16 and 17. Results will be known on Dec 18.

Cases impact annual earnings by 2pct

The company plans to test 20 percent of its workers every two weeks as a precautionary measure, the research houses reported.

Kossan also told analysts its accommodation for workers exceeds International Labour Organisation standards, at an average of 46 square feet per worker.

The 14-day closure of the Meru facility will impact about 1 percent of total annual output and 2 percent of annual earnings, Kenanga Investments reported.

Analysts nevertheless maintained buy calls on Kossan shares.

In a note, Kenanga Investments this morning said Kossan's Covid-19 outbreak is “just a few wrinkles”.

It added that the issues have a “minimal impact on the bottom line”, and is outweighed by the persistent demand for rubber gloves worldwide.

HLG Securities also maintains its positive position on glove players, placing Top Glove as its top pick.

“Share prices of glove players have seen weakness of late, largely due to vaccine development news flow.

“However, at current depressed valuations, we reckon that these negatives have been priced in.

“With the global Covid-19 count still chalking new daily highs, we think the risk to reward ratio seems favourable at current levels,” it said in a note.

Kossan shares opened this morning at RM4.92 and traded at RM5.04 by noon.  - Mkini