MALAYSIA: OSK Research positive on Top Glove's investment in Cambodia's rubber plantation

OSK Research is positive on Top Glove Corporation Bhd's move to invest in Cambodia's rubber plantation as it will act as a hedging mechanism for the glove manufacturer.

However, the plantation's contribution alone was not sufficient to meet Top Glove's total latex requirement, thus the management is expected to buy more land once the move turn out to be a success, it said in a statement.

As for the gloves manufacturer's move to increase nitrile mix glove to a targeted 15%, the research firm was positive on the move but was still unsure on how fast Top Glove can make the switch.

"This is due to the difficulty to penetrate into the nitrile glove market since the gloves are mainly sold to established healthcare multinational companies which have fixed orders from existing suppliers.

"Unless Top Glove is targeting its existing customers, it may not be so easy to penetrate into new markets or garner new customers since this type of gloves are used for medical purpose, which are required to meet high Food & Drug Administration requirements, it said.(Syed Rashid Ali, Karachi, Pakistan)