Sri Trang Agro-Industry Public Co. is investing THB9.1 billion (€254 million) to expand its natural rubber (NR) production capacity to meet demand in the Asian region.
In recently issued third quarter results, the Thai NR and gloves manufacturer said its rubber business had shown “robust profitability” and was a “driving force” for sales and profit growth.
“We continue to gain market-share, as reflected in the utilisation rate of over 70% for our TRS facilities in Thailand,” according to the group's financial statement.
Growth, said Sri Trang, is being driven by demand from non-Chinese tire producers, which traditionally preferred NR from Indonesia.
However, it noted, the fungal disease has had a damaging impact on NR supply from Indonesia and, therefore, Thailand has been providing an increasing proportion of supply over recent years.
To “minimise costs in the interregional transportation of raw materials”, Sri Trang said it will expand TSR production capacity at the plants in Pitsanulok, Leoy, Chiangrai in the north of Thailand.
Furthermore, it will expand TSR production in Bungkarn, Sakon Nakorn, Kalasin, Busiram, Srakaew, Mukdaharn in the northeast, and in Trang and Narathiwas in the south of Thailand.
The investment programme is expected to be “gradually completed” over a two-year period to end-of-2024, Sir Trang added.
In the third quarter of 2022, Sri Trang reported a 3.1% year-on-year increase in total revenue to THB29.3 billion, driven by a 48% increase in sales of NR products to THB26 billion.
NR products, according to Sri Trang, accounts for nearly 84% of the group’s overall revenue.
Revenue from gloves, accounting for over 16% of total revenue, was down 54.5% at THB4.9 billion, as average selling prices fell.
Source : European Rubber Journal