Malaysian glove maker Supermax says other Canadian contracts not affected by termination of government supply deal

THE Canadian subsidiary of Malaysia's Supermax Corp still has other contracts in force, the company said in a filing with Bursa Malaysia on Thursday (Jan 20), after a nitrile glove supply deal with the Canadian government was axed over forced labour allegations.

Two sourcing contracts between Canada and overseas subsidiary Supermax Healthcare Canada have been terminated by mutual consent, Supermax said - confirming an earlier statement from Canada's public services and procurement department on Tuesday.

But it added that the remaining balance of the two contracts was US$12.67 million - that is, less than 0.8 per cent of group revenue - while Canadian contracts for other personal protective equipment products "remain in place and are not affected".

Canada had already frozen imports from Supermax in November 2021, pending the outcome of an audit, but told Reuters this week that the contracts would be terminated given "the seriousness of the allegations and expected timelines for the final audit results".

The United States also halted Supermax imports over similar labour concerns in October 2021, while lawyers representing Supermax workers have asked British courts to weigh in on Britain's decision to approve the company as a supplier to the National Health Service.

In its latest statement, Supermax reiterated that it has been working towards meeting International Labour Organisation (ILO) standards on migrant workers since 2019.

"The group has been implementing many improvements and upgrades to improve its workers' welfare in stages and has taken steps to speed up the process in order to meet the ILO standards in good time," the company added in its bourse filing.

The latest update followed a "new and comprehensive foreign worker management policy", as well as enhanced human resource policies, announced by Supermax on Jan 3.

Malaysia is a leading supplier of rubber gloves, and the industry saw an unexpected boost in global demand amid the Covid-19 pandemic. But Malaysian glove makers, including Supermax rivals Top Glove and Smart Glove, have come under international pressure over forced-labour claims.

Supermax shares closed on Thursday at RM1.27, down by RM0.03 or 2.3 per cent.