KUALA LUMPUR: Supermax Corp Bhd has warned that there will be adverse effect on its financial performance if efforts to divert sales of its gloves to other markets is be less than successful.

The warning came after the US Customs and Border Protection (CBP) issued a Withhold Release Order (WRO) against the glove maker and its subsidiaries' products on forced labour allegations.

In an exchange filing today, Supermax said the duration of the WRO would also determine the extent of the impact.

"Nevertheless, the group would take steps to divert goods bound for the US to other markets where possible," it added.

On October 21, Supermax said it had been served with a WRO by the CBP that would affect its sales to the US market, which accounted for about 20 per cent of the group's total sales. 

The company said it did not foresee any material impact operationally.

The CBP issued the order to prohibit imports from Supermax's wholly-owned subsidiaries from entering the country based on reasonable information of forced labour in the group's manufacturing operations.

The report quoted a statement by CBP as saying that with 10 of the 11 forced labour indicators identified during the course of its investigation, it had "ample evidence" to conclude that Supermax and its subsidiaries produce gloves in violation of US trade law.

"With this WRO, the Biden-Harris Administration continues to make clear that products made in whole or in part by forced labour will not be allowed into the United States.

"The Department of Homeland Security will continue to set an international standard for the elimination of the deplorable practice of forced labour. We will remove it from American supply chains," Secretary of Homeland Security Alejandro N Mayorkas said in a CBP statement.