Message from the Chairman

Investor Relations

 

We will keep strengthening our operations throughout the supply chain to reinforce our position as the world’s largest fully integrated natural rubber company.

The year 2016 was a very exciting one for STA. First of all, it was the year that STA achieved a record high in sales volume of 1.5 million tons, solidifying our position as the world’s largest natural rubber company. Our market share also increased to 12% of global natural rubber consumption. This is a remarkable accomplishment and one that could not have happened without our employees in all capacities who have been working so tirelessly. Indeed, the path to this success was paved with many obstacles that tested the resolve and fortitude of all involved and I would like to express my sincere thanks to all who have been on this journey with us.

One constant challenge that we have had to contend with year in and year out is the volatility of natural rubber prices and 2016 was no exception. The rubber market got off to a very rocky start as rubber prices continued its downward trajectory, dropping to the lowest level in a decade at the start of the year. But the market took a turn for the better later on when the severe drought and excessive rainfall started to interfere with rubber production. The reduced supply helped to drive up the prices, which further picked up momentum in the last quarter on the back of optimism about infrastructure spending by the Trump administration to end the year at a higher level than the previous one for the first time since 2011. This constantly changing industry landscape requires our operations to be nimble and able to adapt to the changing circumstances.

The prolonged period of low natural rubber prices of the past 5 years has been particularly challenging for our operations. Yet we kept soldiering on in the face of inhospitable industry climate, as evidenced by a 76% increase in our production capacity from 1.3 million tons per year in 2011 to 2.4 million tons per year in 2016. We will keep expanding our production capacity to accommodate our current target “STA 20,” that is, to reach a market share of 20% of global natural consumption, by setting up new production bases in areas where there is strong potential for rubber production, with a particular focus given to areas where we already have our own rubber plantations.

Although we are mainly known as a dominant player in the midstream sector, we have always been equally committed to our downstream operations. We will continue to devote resources to strengthening our examination glove operations and will seek out growth opportunities that will enable us to achieve global name recognition in the downstream sector.

In addition to a record high in sales volume, our other notable achievement in 2016 is that we were able to successfully implement “production standardization” across all our production facilities. This provide an assurance to customers that all of our of products, no matter the facilities where they were produced, underwent the same production processes and conform to the same international standards.

I cannot predict what 2017 has in store for us. One certain thing is that STA will reach an important milestone as it turns 30 later this year. It is nothing short of extraordinary that within 30 years STA has risen from humble beginnings to become a leading player in the natural rubber business. But I can assure you that we are not, nor will ever be, complacent. We will keep strengthening our operations throughout the supply chain to reinforce our position as the world’s largest fully integrated natural rubber company.

Dr. Viyavood Sincharoenkul
Chairman
Sri Trang Agro-Industry Public Company Limited
February 2017