Plantation giant FGV Holdings Bhd, which has reimbursed the first tranche of recruitment fees to its current and former migrant workers, expects the United State Customs and Border Protection (US CBP) ban to be lifted in the third quarter of this year.
Hong Leong Investment Bank (HLIB) said FGV will repay the remaining two tranches of recruitment fees in June and September.
“Upon verification of reimbursement of recruitment fees paid, FGV will submit a report to the US CBP, which will go towards the lifting of the Withhold Release Order by 3Q2023,” the research house said in a note on Thursday (June 1).
The research house had attended the group’s virtual post 1QFY2023 results briefing on Wednesday (May 31).
It has been more than two years since the US CBP announced the import ban on Sept 30, 2020. It was preceded by a year-long investigation that reportedly found evidence of forced labour at the plantation giant.
Eight Malaysian companies have been slapped with the withhold release order by the US CBP in the past two years regarding forced labour issues. These companies are manufacturers of rubber gloves and palm oil products.
The companies that are still on the list are FGV; Brightway Group’s subsidiaries, namely Brightway Holdings Sdn Bhd, Laglove (M) Sdn Bhd, and Biopro (M) Sdn Bhd; as well as Supermax Corp Bhd’s subsidiaries, namely Maxter Glove Manufacturing Sdn Bhd, Maxwell Glove Manufacturing Bhd, and Supermax Glove Manufacturing Sdn Bhd.
Regarding migrant worker recruitment, FGV’s management also shared that it will resume bringing in more migrant workers upon recommendation by its auditors, and expects the labour shortage issue to be fully resolved by September.
“The recruitment of an additional 1,077 migrant workers (from Indonesia and India) has resulted in FGV’s labour shortages reducing to 11% of its total workforce requirement in 1Q2023 (from 13% in end-FY2022),” HLIB added.
HLIB maintained its “hold” rating on FGV, with unchanged target price of RM1.28.
Source: theedgemalaysia