Message from the Chairman

Investor Relations

 

In 2018, the natural rubber industry still had to contend with an oversupply that lingered from the previous year and caused natural rubber prices to move down in every quarter. Amid this challenging industry climate, we decided to implement our selective selling strategy and chose to preserve our profit margin rather than focusing on growth in sales volume. Our performance in 2018 serves to validate our strategy as we managed to consistently record a profit in every quarter, with a total profit for the full year at Baht 2.064 billion, in the face of persistently low natural rubber prices. We even managed to increase our sales volume despite the imposition of an export quota during the first quarter of the year. Our growth and strong performance in this year was the result of our fully integrated operations throughout the supply chain.

2018 was also the year that our glove operations, Sri Trang Gloves (Thailand) Co., Ltd. (“STGT”), which we took full control of in March 2017, hit their stride and proved instrumental in driving our growth and profit. The performance of STGT in 2018 clearly demonstrates the synergy between our natural rubber processing operations in the midstream and our glove production operations in the downstream and testifies to our strength as a “fully integrated natural rubber company,” as we derive much of our competitive edge from having a ready access to quality latex in the desired amount and at a fair cost from our own processing facilities. Thanks to our strong sales and marketing team, we managed to reach 17 billion pieces in sales volume and expand our markets to 120 countries around the world, gaining a foothold in previously untapped markets like India, Africa Continental, and Latin America, which witnessed an exponential growth in glove consumption.

Going forward, we will continue to strengthen our operations throughout the supply chain. The global demand for gloves is expected to keep growing in the next couple of years and we have put in place an expansion plan that will keep us on track to reach 30 billion pieces in production capacity by the end of 2020. The amalgamation of STGT and Thaikong Public Company Limited (“TK”), a glove producer with a state-of-the-art production facility located in the province of Trang, is expected to be completed in Aril 2019. To be able to stay competitive in today’s fast-paced industry climate amid fierce competition, we plan to improve efficiency at all of our production facilities by moving toward automation and deploying sensors and artificial intelligence in the production process.

Lastly, I would like to extend my thanks to our shareholders, business partners, public and private sectors, as well as our customers who have given us support throughout the year. I would also like to thank our employees and management for their constant dedication to STA. I assure everyone that STA is committed to operating with business ethics under the principles of good corporate governance with an eye to reinforcing our position as the world’s leading fully integrated natural rubber company.

"Going forward, we will continue to strengthen our operations throughout the supply chain. The global demand for gloves is expected to keep growing in the next couple of years"

Dr. Viyavood Sincharoenkul
Chairman / Managing Director
Sri Trang Agro-Industry Public Company Limited
February 2019