In 2023, the global economic landscape was shaped by several pivotal events. Inflation rates started to stabilize, with the US Federal Reserve implementing the interest rate increase policy that had successfully slowed inflation while avoiding recession and maintaining robust consumer spending. In Asia, China witnessed an economic slowdown and trouble in the real estate sector. Geopolitical conflicts like the war between Israel and Hamas and the worsening political situation in Myanmar and Thailand’s election also posed challenges affecting both the economic landscape and international relations. Despite the volatile circumstances, Sri Trang Group has managed to continue its business operations and growth, maintaining its position as the world's leading fully integrated natural rubber company, with a total natural rubber production capacity of over 3.62 million tons and expansion plans to reach a target of 4.12 million tons by 2025.
The natural rubber industry in 2023 faced various challenges, from the inhospitable weather conditions and price volatility to slowing demand from certain industries. Despite these challenges, our experience of over 36 years and agility have enabled us to continue to create value and growth. During the past year, we have successfully established raw material purchasing centers in Ivory Coast, West Africa, a region with high growth potential where we are also preparing to open a new processing facility, an opportunity for business expansion that reinforces our industry leadership.
All in all, 2023 was a year of significant global changes, with major trends such as the development of Generative Artificial Intelligence (AI) like ChatGPT, the focus on clean energy and the reduction of greenhouse gas and carbon dioxide emissions, and the push for electric vehicles (EVs).
Sri Trang Group is keenly aware of the importance of these trends and has planned accordingly to leverage them for operational and industry developments. We have invested in establishing a team of experts to explore AI solutions, innovations and megatrends for organizational benefits, seeing these as the crucial drivers for our business.
With a clear vision and strong commitment to sustainable growth, the DNA of Sri Trang Group has, for over a decade, been a green rubber company that prioritizes sustainable operations in all dimensions - environmental, social, governance, and economic (ESG). Besides the FSC certifications for sustainable forest management, carbon credit registration and other sustainability initiatives, in 2023, we focused on preparing for the EU Deforestation-Free Products Regulation (EUDR), which emphasizes traceability for seven product types, including rubber, being export to the European Union and which will be effective from late 2024. We have worked closely with customers and further developed the SRI TRANG FRIENDS PLATFORM and other digital systems to fully support our rubber traceability. We are confident that EUDR presents a business opportunity for Sri Trang Group and for Thailand, which is well-equipped and wellprepared. Crucially, Sri Trang Group has consistently focused on sustainable business practices that align with the sustainable development globally.
In 2024, we may continue to face various economic uncertainties, including the slowing inflation following expected interest rate cuts by the U.S. Federal Reserve, which could lead to uncertain economic conditions. Moreover, we have to monitor geopolitical tensions and climate conditions, both of which could potentially have an impact on our operations. Therefore, we must not be complacent and prepare for what the year may bring. Lastly, I would like to wish for everyone to succeed and overcome various challenges. Sri Trang Group will continue to focus on investing and fostering growth to maintain our leadership in the natural rubber business, creating a difference by integrating digitalization with sustainable operations, and revolutionizing and leading the Thai rubber industry to a new level. Thank you.
Dr. Viyavood Sincharoenkul
Chairman
Sri Trang Agro-Industry Public Company Limited