‘Kossan a strong bet for investors’

KUALA LUMPUR: Kossan Rubber Industries Bhd is seen as a safe and strong bet for investors as the company has shown continuous improvements in its production lines.

Public Invest Research noted that despite stiff competition, Kossan has differentiated itself from the rest when it introduced and patented its “accelerator-free” nitrile gloves, which minimise latex protein and chemical allergies.

“We are also positive on other new innovative offerings which are expected to be launched by end of the year,” said the research house.

Kossan recently acquired Aseptapak (M) Sdn Bhd, which has the know-how to stack medical gloves the same way tissue papers are packed. This method prevents gloves from being contaminated when pulled out of boxes.

Public Invest Research also noted that Kossan’s new plant would feature higher speed production lines that require only a third of the number of workers normally employed to operate the old plants.

The research house said the company was planning to double its current capacity to 43 billion pieces over the next five years, and had set aside RM120 million to RM150 million a year for this purpose.

Public Invest Research maintained its “outperform” call on Kossan, with an unchanged target price of RM8.50.