Revenue is down 16.2% at 5.49 billion baht, from 6.55 billion baht a year earlier

 

[SINGAPORE]   Sri Trang Gloves   : STG 0% posted a 9.5 per cent decline in net profit for its first quarter ended Mar 31, to 384.1 million baht (S$15.1 million) from 424.2 million baht a year earlier.

 

This came as lower revenue and margins weighed on the group&rsquo s performance.

 

Revenue fell 16.2 per cent to 5.49 billion baht from 6.55 billion baht a year earlier, the Thailand-based manufacturer said in a regulatory filing on Thursday (May 21).

 

Gross profit dropped 33.1 per cent to 568.4 million baht, while gross profit margin shrank to 10.4 per cent from 13 per cent previously.

 

Sales volume for the quarter fell 0.4 per cent year on year to 9.16 billion pieces. However, the group noted that this was a 4.6 per cent increase quarter on quarter, as operations normalised after temporary disruptions from flooding in late 2025.

 

Sri Trang&rsquo s bottom line was buoyed by 284 million baht in partial insurance compensation income relating to the flooding. This boosted the group&rsquo s other income to 326.2 million baht, from 47.8 million baht a year earlier.

 

It also recorded a net foreign-exchange gain of 92 million baht, reversing from a loss of 12.8 million baht previously.

 

Earnings per share came in at 0.14 baht, down from 0.15 baht a year earlier.

 

Sri Trang said that it remains upbeat in its outlook, though it acknowledged that the Middle East conflict has disrupted synthetic rubber supply chains.

 

Rising raw material prices have caused prices of nitrile rubber, used in glove manufacturing, to surge by 160 per cent, it noted.

 

However, Sri Trang said it still has a competitive advantage in manufacturing by using natural rubber latex, of which prices have risen more modestly, by about 30 per cent.

 

Separately, Sri Trang announced a second phase of its share repurchase programme for financial management purposes.

 

The group will spend up to 683 million baht to buy back up to 62.1 million shares, representing 2.17 per cent of its total issued shares. The repurchase period runs from May 12 to Nov 7.

 

This comes after the completion of its first share buyback phase in March, during which it repurchased 100.18 million shares for 816.8 million baht.

The steeper net loss comes as its top line decreases 5.6% year on year to 6.1 billion baht, even as sales volume rises

[SINGAPORE]   Sri Trang Gloves&rsquo   : STG 0% net loss for the third quarter ended September widened to 106 million baht (S$4.3 million) from 86.5 million baht for the corresponding period in 2024, as the allowance for impairment of buildings and machinery and losses on financial derivatives weighed on profitability.

 

Excluding the allowance and losses on financial derivatives, it would have recorded a pre-tax operating loss of 500,000 baht, the glove maker said in a bourse filing on Friday (Nov 7). 

 

The allowance was made in line with the company&rsquo s plan to replace machinery that is no longer used with new assets and technologies to enhance production efficiency and reduce costs.

 

The steeper net loss came as its top line decreased 5.6 per cent year on year to 6.1 billion baht, even as sales volume rose by 4.9 per cent to more than 10 billion gloves.

 

The average selling price, however, dropped 8.6 per cent on the year due to intense competition in the industry and the appreciation of the baht against the US dollar by 7.2 per cent.

 

For the nine months, however, the glove maker managed to turn in earnings of 395.3 million baht &ndash 9.9 per cent lower than in the year-ago period. With a 2.2 per cent improvement, revenue reached 18.6 billion baht.

 

Interest coverage ratio in Q3 was 9.92 times, down from 11.74 times in the previous quarter, mainly due to a decline in earnings before interest, tax, depreciation and amortisation. 

Cost of goods sold has outstripped revenue, which is up 4.6% to six billion baht

 

[SINGAPORE] Sri Trang Gloves : STG 0% posted a net profit drop of 79.6 per cent year on year to 77.1 million baht (S$3.1 million) for the quarter ended June, as the rise in cost of goods sold outstripped revenue. 

 

Revenue was up 4.6 per cent to six billion baht during the second quarter of FY2025, underpinned by recovery in worldwide demand. 

 

However, cost of goods sold increased more, at 10.4 per cent to 5.5 billion baht, due to higher raw material prices and sales volume, resulting in a gross profit drop by 33.3 per cent.

 

Net foreign exchange loss also weighed on the Thailand-based manufacturer as it recorded as 112.8 million baht loss arising from the negative currency movement amid depreciation of the greenback against the baht.

 

In spite of the average selling price having risen by 6.2 per cent year on year in US dollar terms, the 9.8 per cent appreciation of the baht against the greenback eroded the price increase.

 

Sri Trang Gloves had posted net foreign exchange gain of 23.3 million baht for the year-ago period.

 

Hence, earnings per share dropped to 0.03 baht from 0.13 baht. 

 

It flagged the impact of the United States reciprocal tariffs during the quarter, which spawned increased price competition and holding back of orders from some wait-and-see American customers.

 

The average selling price dipped 8.3 per cent quarter on quarter because of increased price competition and the appreciation of the baht by 2.5 per cent against the US dollar.

 

Sri Trang Gloves delivered a 4.5 per cent lower net profit for the half year at 501.3 million baht while revenue rose 6.4 per cent to 12.5 billion baht. 

Revenue rose to 6.5b baht in Q1, 8.2% higher from 6.1b baht the year before

 

[SINGAPORE] Sri Trang Gloves (Thailand) posted a net profit of 424.2 million baht (S$16.7 million) in the first quarter ended Mar 31, a 189 per cent increase from 146.8 million baht in the year-ago period. 

 

Revenue rose to 6.5 billion baht in Q1, 8.2 per cent higher from 6.1 billion baht the year before. Sales volume over the same period rose 8.9 per cent year on year to 9.1 billion pieces.

 

Earnings per share stood at 0.15 baht, up from 0.05 baht in the corresponding year-ago period. 

 

The group said on Tuesday (May 13) that its increase in net profit reflects the continued recovery of the industry and its diversified customer base. 

 

&ldquo We will continue to make improvements in operations in anticipation of the global economic uncertainty and volatility.&rdquo

 

It will focus on increasing the production of speciality gloves, and currently produces over 85 types of gloves including surgical and diamond-textured gloves. 

 

SRI Trang Gloves Thailand (STGT) recorded a net profit of 4.53 billion baht (S$185.2 million) for the third quarter ended Sep 30, 2021, up 3 per cent from the 4.40 billion baht the company posted in the same period a year ago.

 

Earnings per share rose to 0.0158 baht for the quarter, up from 0.0154 a year ago.

 

Revenue grew by a further 32.6 per cent to 10.86 billion baht in the third quarter, up from 8.19 billion baht the year before.

 

However, quarter-on-quarter, revenue declined by 16.2 per cent from 12.96 billion baht.

 

The company attributed the year-on-year growth in revenue to increase in average selling prices (ASP), while the quarter-on-quarter decline in revenue resulted in ASP that fell 32.5 per cent to 1,531 baht per 1,000 pieces because of increased supply in the market.

 

Despite the reopening of its Surat Thani and Trang manufacturing plants after they were temporarily suspended due to Covid-19 in Q2, STGT noted that the persistent global container shortage and shipping congestion led the company to miss its export sales volume targets. Its sales volume was 7.08 billion pieces in the third quarter, down 0.9 per cent year-on-year but up 23.8 per cent quarter-on-quarter.

 

The company' s latex powdered gloves contributed the highest proportion of revenue at 38.4 per cent, followed by nitrile gloves at 38.2 per cent of total sales revenue. Latex powder-free gloves accounted for 23.4 per cent of total sales revenue.

 

STGT said that its strategy would be to have flexibility of production lines that can interchange between manufacturing latex and nitrile gloves to respond to market demand.

 

It will also expand its capacity to reach 50 billion pieces by 2022 and 80 billion pieces by 2024. Production efficiency will be improved, from the current 2.17 persons by 1 million pieces to 1.65 persons in 2024 and 1 person in 2026.

 

Furthermore, the company aims to increase market share from its current 170 countries to reach over 190 countries within the next 3 years. It will also develop new types of biodegradable latex gloves to respond to customer demand. It noted that its recent Clean World Clean Glove received various test certificates from labs in Europe and the US.

 

The company' s board of directors has approved the payment of interim dividends at 1.25 baht per share to shareholders. The ex-dividend date will be Nov 19 to Nov 22 and dividends will be paid on Dec 7.

 

THE rollout of vaccines for Covid-19 has cut both the " urgent demand" for and the average selling prices (ASPs) of rubber gloves. Yet Jarinya Jirojkul, chief executive of Sri Trang Gloves Thailand (STGT), said the glove maker is pressing on with its expansion plans with the expectation that it will be able to deal with these corrections.

 

In an interview with The Business Times, Jarinya said the urgent demand for gloves around the world is " already gone" . Demand for gloves grew by about 20-25 per cent last year, due to the pandemic. Prior to the pandemic, annual growth levels stood at 12-15 per cent.

 

Demand can be expected to slow further in the second half of 2021 as vaccines are rolled out progressively, she added, which means that annual growth could fall to as low as 10 per cent.

 

Jarinya said some countries - including the US and parts of the EU - have an " overstock" of gloves, which has normalised their demand.

 

The slowdown is coming even as glove makers increase their production capacity.

 

STGT has an expansion plan in place that will see its annual production capacity rise from 33.3 billion pieces of gloves currently to 50 billion pieces next year and 102 billion pieces by 2026. The company has earmarked capital expenditure of 44 billion baht (S$1.8 billion) for the expansion through 2026.

 

Jarinya said other big glove players are also ramping up, which could pave the way for an oversupply in the glove market. Attractive returns and high profits in the glove industry have also prompted several new players to enter the market, which means greater competition for STGT.

 

" Every key player (in the glove industry) has an expansion plan like us," she said. " It will be more competitive because the ASPs are coming down, and the supply will be greater because of the expansion of the big and new players . . . so this means we have to be a cost-competitive company with economies of scale."

 

One of the major problems for glove manufacturers recently has been rising raw material prices.

 

Malaysia' s Top Glove in its financial results for Q4 ended August said average natural latex concentrate prices were up 29 per cent year on year to RM5.73 (S$1.86) per kg, while average nitrile latex prices more than doubled to US$2.11 per kg.

 

Although STGT gets its raw materials from its parent company Sri Trang Agro-Industry (STA), a Thailand-based rubber producer, it is not spared these price increases.

 

Jarinya said STGT buys rubber and rubber products from STA at " market prices" .

 

There are, however, other advantages. For instance, STGT is not subject to additional taxes on its primary raw material.

 

" If you are a glove producer in Malaysia, or China or Indonesia and want to buy raw material from Thailand, there is an export tax from the Thai government," she said.

 

Also, by getting raw materials from its parent company, STGT can be assured of a " secure supply" during the winter season. Colder or rainy weather typically hits rubber supply adversely, which causes a spike in natural rubber latex concentrate prices.

 

STGT is also looking at other means of improving its margins.

 

For instance, it can import rubber of " higher quality" - rubber with a certain protein content - said Jarinya. STGT also does not rely solely on STA for supply of raw materials, but looks at alternative sources as well.

 

" We cannot control the market price, but what we can do in our factories is to find out how to keep the cost competitive," said Jarinya.

 

STGT has also taken to automating certain processes in factories with " cutting edge" technology, which in turn makes the company' s production lines more efficient.

 

Thai glove producer Sri Trang Gloves, which has a secondary listing on the SGX Mainboard, has commissioned a new facility in Sadao District, Songkhla.

 

The latest expansion follows the opening of two other facilities in Surat Thani Province earlier this year and brings the total number of facilities currently operated by Sri Trang Gloves to ten.

The THB1.6 billion ($65 million) Sadao facility is able to produce a diverse range of products, including natural latex and nitrile gloves. Upon completion of the facility&rsquo s ramp-up to eight production lines in April 2022, it will be able to produce three billion gloves annually.

 

The new facility will contribute to Sri Trang Gloves' target to increase its annual production capacity from 35 billion gloves currently to 80 billion by 2023.

 

According to the company, the self-sustaining Sadao facility operates on biomass renewable energy harvested from mature rubber trees that have reached the end of their rubber-producing lifecycle. This results in lower greenhouse gas emissions compared to traditional energy sources like coal and liquefied petroleum gas (LPG).

 

&ldquo Global demand for rubber gloves has been steadily increasing as industrial operators and consumers are paying more attention to personal hygiene in the wake of the Covid-19 pandemic. The roll-out of vaccination programmes across developed and emerging economies has also heightened the use of latex gloves by healthcare professionals, which further drives demand for our products. On this note, we will forge ahead with our plans to expand production to meet the strong demand for latex gloves in domestic and overseas markets,&rdquo says Jarinya Jirojkul, CEO of Sri Trang Gloves.

 

&ldquo We are also making headway with our efforts to increase production capacities, with construction and installation of machinery now taking place for a fourth facility to be commissioned in the last quarter of 2021,&rdquo Jirojkul added.

  Sri Trang Gloves CEO Jarinya Jirojkul said global demand for latex and nitrile gloves has risen very rapidly.

 

SINGAPORE - Sri Trang Gloves Thailand (STGT), one of the world' s top rubber glove makers, said it has opened an office in Singapore to help with plans to boost its production capacity and increase focus on research and innovation.

 

Its Singapore subsidiary - Sri Trang Gloves Singapore - will oversee the distribution of latex gloves to international markets and have direct oversight of the group' s research and development, as well as product innovation, STGT said in a statement on Monday (Aug 30).

 

The new office will push forward its ambitions for regional expansion, aimed at increased marketing activities, sales and production capacities in the Asean region, with plans to set up branch offices in Vietnam, Indonesia and the Philippines.

 

STGT chief executive Jarinya Jirojkul said global demand for latex and nitrile gloves has been rising rapidly during the Covid-19 pandemic, and the trend is expected to continue in the years ahead.

 

To meet the growing demand, she said the company plans to increase STGT' s production capacity by more than 186 per cent over the next five years, scaling up its glove production from about 35 billion pieces per year presently to more than 100 billion pieces a year by 2026.

 

Global demand for gloves is expected to reach 500 billion this year, well ahead of the estimated supply of 420 billion pieces, according to estimates by the Malaysian Rubber Gloves Manufacturers Association.

 

Even as glove makers rush to close the gap, the supply shortage could persist until 2023 in view of the ongoing pandemic, said the association.

 

Ms Jarinya said in June that STGT had set aside 44 billion baht (S$1.8 billion) to raise its production and improve efficiency, and expects the company' s annual glove production capacity to rise to 50 billion pieces next year.

 

In the statement on Monday, the CEO said STGT, which also has a presence in the United States and China, sees the Asean region as a high-growth market.

 

" Over the longer term, Asean presents significant potential as its growth rate still lags consumption rates of European countries," said Ms Jarinya.

 

STGT has a primary listing on the Stock Exchange of Thailand and is secondary-listed on the Singapore Exchange. Its subsidiary Sri Trang Agro is the world' s biggest rubber producer by capacity.

 

As the global battle against Covid-19 rages on, glove makers are playing a vital role, equipping frontline health workers with gloves to protect themselves against the deadly disease. 

 

And most of that responsibility falls squarely on the shoulders of some of the world&rsquo s top five glove suppliers, most of which are located in Malaysia and Thailand.

 

Placed third on the world&rsquo s largest glove producers is Sri Trang Gloves. With more than 7,800 employees and a total of 147 production lines, Sri Trang Gloves can manufacture 33.3 billion pieces of gloves per year. According to the company, this makes it the largest rubber glove manufacturer in Thailand.

 

Last July, Sri Trang Gloves raised THB14 billion ($669.6 million) in its IPO, amid a flurry to ramp up supply in the face of the pandemic. Shares closed on July 2, 2020, at THB30.25 ($1.36) on its debut, before ending the month at THB40.75 ($1.79).

 

On May 10, the company made its debut on the Mainboard of the Singapore Exchange (SGX) via a secondary listing, less than a year after its primary listing on the Stock Exchange of Thailand (SET).

 

&ldquo We understand that Singapore is ranked as one of the world&rsquo s most competitive economies it is one of the key financial hubs of Asia,&rdquo says Jarinya Jirojkul, CEO of Sri Trang Gloves, in an interview with The Edge Singapore.

 

&ldquo It has a strategic location and its financial infrastructure is good. It offers stability and is an asset to the global market. That is why we chose SGX,&rdquo says Jarinya, adding that the company had begun mulling the listing in late-2020 following an invitation from SGX to its chairman Dr Viyavood Sincharoenkul.

 

The Sri Trang brand is no stranger to SGX. Since 2011, its parent company, Sri Trang Agro-Industry Public Company, a rubber plantation giant, has been dual-listed on both the Singapore and Thai bourses. Post-listing, the parent company maintains a 50.75% interest in Sri Trang Gloves, according to an SGX note on May 20.

 

A pandemic every decade

 

According to Sri Trang Gloves, the secondary listing on SGX will help it expand and diversify the company&rsquo s shareholder base with foreign stakeholders in the region and more funding channels.

 

As of May 25, Sri Trang Gloves has a total market cap of $5.7 billion, making it the 30th largest on SGX. The free-float market cap of the stock is $2.0 billion, representing 34% of the total value. Since its listing on the SGX, shares have hit a high of $2.07. On June 1, the stock closed at $1.95.

 

Incorporated in 1989, Sri Trang Gloves was founded as Siam Sempermed Corporation as a 50:50 JV between STA and Austrian manufacturer Semperit Technische Produkte Gesellschaft. On March 15, 2017, STA bought out Semperit from the JV. The following day, the company was renamed Sri Trang Gloves (Thailand).

 

According to the company&rsquo s prospectus, Sri Trang Gloves owns 100% of Shidong Shanghai Medical Equipment (SDME) and Sri Trang USA, based in China and the US respectively. The company also holds a 99.9992% shareholding interest in Premier System Engineering and a 99.9985% shareholding interest in Sadao PS Rubber, both of which are based in Thailand.

 

Previously the managing director of predecessor entity Thaikong Public Company, Jarinya was named CEO of Sri Trang Gloves on July 24, 2019. She is careful to describe the pandemic to be a &ldquo once in a lifetime&rdquo challenge, surpassing even that of Sars nearly two decades ago.

 

&ldquo In 2003, if you remember, we had Sars. At that time, demand was going up too. During the bird flu in 2009&ndash 2010, we also faced strong demand. It seems every 10 years we will have a pandemic like this, which drives global demand for gloves,&rdquo says Jarinya, who has more than two decades of experience in the industry.

 

The Malaysian Rubber Glove Manufacturers Association estimates that global demand for rubber gloves will amount to 500 billion pieces of gloves this year, with global supply projected to grow to 420 billion pieces, up from 360 million pieces in 2020. The report also estimates that 67% of the global supply of rubber gloves this year will come from Malaysia, with 18% provided by Thailand.

 

&ldquo I would say demand for gloves [typically] grows around 10&ndash 12% annually. When we faced Covid-19, demand went up by more than 20%,&rdquo says Jarinya. &ldquo We expect demand to exceed supply for at least the next 12 to 24 months.&rdquo

Big gloves to fill

 

Sri Trang Gloves manufactures two main products: natural rubber gloves using concentrated latex and nitrile gloves using nitrile butadiene rubber, a synthetic latex. About 60% of gloves sold in FY2020 ended Dec 31, 2020, were natural rubber gloves, which are biodegradable.

 

Today, Sri Trang Gloves counts 3,700 global customers, with its products reaching 140 countries. According to the company, customers in developed nations prefer nitrile gloves and powder-free natural rubber gloves while powdered natural rubber gloves are favoured by customers in developing countries. This is because although rubber gloves are cheaper, nitrile gloves are more resistant to chemicals and suitable for users allergic to latex.

 

According to the company&rsquo s presentation of 1QFY2021 earnings ended March, nitrile gloves made up 46% of the quarter&rsquo s glove sales revenue. Latex powdered gloves contributed 31% while latex powder-free gloves made up 23% of sales revenue.

 

Of the same sales figure, close to three quarters (71%) of revenue came from OEM products, while 29% came from original brand manufacturing (OBM).

Notably, China makes up approximately 10% of total sales volume, says Jarinya. While the company has in China its distributor subsidiary SDME, there are currently no plans for production facilities in the country, she adds.

 

While commodities have been in the spotlight of late, rubber has had a particularly volatile year. &ldquo If you see the outlook in 2021 when the automotive industry recovers, that will account for 80% of usage. We foresee the price of rubber will increase by 20% on average [this year] from 2020,&rdquo says Jarinya.

But the company is sheltered from such price swings as it sits under the umbrella of the Sri Trang Group. &ldquo The mother company is the Sri Trang Group. The group buys the raw materials from rubber farmers then produces raw rubber, sheet rubber or latex. We then supply downstream players like glove manufacturers and tyre makers. We are the middleman, so we can manage the price,&rdquo she explains.

 

&ldquo We foresee that the price of rubber will increase but this increased price will still be lower than nitrile, so it makes us competitive compared to other players,&rdquo she adds.

 

Presently, Sri Trang Gloves&rsquo three factories are strategically located in southern Thailand, home to rich rubber plantations and the production of latex, the raw material for the production of its natural rubber gloves. &ldquo This allows the company to source for concentrated latex at a lower cost than its major competitors in the region,&rdquo says Sri Trang Gloves.

 

According to the company, its southernmost factory at Hat Yai can produce approximately 17.24 billion pieces of gloves per year. This capacity exceeds the other two factories&rsquo combined capacity, with the Trang factory producing 9.95 billion pieces annually and the Surat Thani factory producing 6.13 billion per year.

Sri Trang Gloves has long-term plans to expand its installed capacity to approximately 80 billion pieces per year by 2024 and approximately 100 billion pieces per year by 2026, or three times its current capacity.

 

To that end, the company plans to expand its two smaller factories in Surat Thani and Trang, while constructing three new factories &mdash PS Factory, with eight production lines Anvar Factory, with 20 and Chumphon Factory, with 36. Work has begun on all three new facilities and the first of these will begin producing gloves in 3Q2021. Naturally, having the hardware is not enough. &ldquo We have a strong focus on best practices for our workforce &mdash our employees are the most important asset,&rdquo says Jarinya.

 

Record earnings

 

A year into the fight against Covid-19, it seems the demand for gloves is far from abating the latest sales revenue and gross profit margin figures are the highest in Sri Trang Gloves&rsquo history.

 

In 1QFY2021, net profit exploded by 2,245.0% y-o-y to THB10.05 million. Total assets increased by THB9.93 billion from the end of FY2020 to THB54.17 billion, mainly consisting of THB29.45 billion in cash.

 

From FY2018 to FY2020, the company&rsquo s revenue grew at a CAGR of 40.4%. Over the same period, profit attributable to shareholders rose at a CAGR of 144.8%, with a net profit margin of 47.4% for FY2020. Meanwhile, the gross profit margin grew from 19.4% in 1QFY2020 to 74.0% in 1QFY2021.

 

The company expects global demand for rubber gloves to exceed supply. &ldquo Despite the roll-out of vaccines in many countries and the increasing supply of such vaccines, this is not expected to have a significant effect on demand for rubber gloves in the short-term,&rdquo says Sri Trang Gloves in a press release. &ldquo Concerns regarding the efficacy of such vaccines and the risk of potential mutations in Covid-19 may also continue to drive global demand for its products for medical use.&rdquo

 

Looking further ahead, Sri Trang Gloves expects demand for its rubber gloves to remain high even in the long-term, as it believes gloves will become standard personal protective equipment in developed and emerging markets.

 

Beyond the hospitals and clinics sector, Sri Trang Gloves reports an increase in demand from industries such as food and catering, transportation and security. &ldquo We expect demand for gloves in non-medical use to continue globally,&rdquo says Jarinya.