THAILAND: STA aims to be top three glovemaker
The world’s largest fully integrated natural rubber company, Sri Trang Agro-Industry Public Company Ltd. (STA), has set its sights on becoming one of the world’s top three glove manufacturers — all of which are Malaysian companies.
It set this aim after assuming full control of its unit Sri Trang Gloves (Thailand) Co. Ltd. (STGT), says Vitchaphol Sincharoenkul, vice-president, natural rubber and branding and communication. STA has been involved in the glove business for nearly 30 years and is the largest glove producer in Thailand and fifth-largest in the world. It is dual-listed in Singapore and Thailand. Vitchapol says the group will try to get into the ranks of the top three within the next five years. “Nonetheless, despite the expansion of our production capacity, it will also depend on the expansion undertaken by glove manufacturers in Malaysia,” Vitchaphol says in an interview with The Edge. He adds that STGT was a joint venture before 2017 but with full control of the glovemaker, the group will be able to independently manage its operations and execute its expansion plan.
Growth for its glove business had been relatively flat before 2017. However, since STGT became a subsidiary, the group’s glove production capacity has grown 23 %, from 14 billion pieces per annum to 17.2 billion pieces. “In order to make this happen, we invested about THB 2 billion (MYR 255.8 million),” Vitchaphol says, adding that STGT aims to grow its capacity to 21 billion pieces per annum by the first half of 2019 and 30 billion pieces per annum by 2021. He adds that STGT is now undertaking the amalgamation of Thailand’s second largest glovemaker, Thaikong Co Ltd, which has a production capacity of four billion gloves per annum. The amalgamation is expected to be completed by April 2019 and this will help the group achieve a production capacity of 21 billion pieces per annum by the first half of 2019. He says there is room to raise production capacity as Thaikong has land and only about 40 % of it is utilised. The remaining 60 % will be utilised for expansion. “With land and a factory, it is faster for us to expand,” he notes.
The group has allocated THB 3.3 billion to grow its production capacity from 21 billion pieces of gloves per annum to 30 billion pieces by 2021. Vitchaphol says the group believes it can compete with the Malaysian glove players given its 30 years of know-how in the industry as well as technological advancement in improving efficiency and production capacity. “We can compete with them because of technological advancement. We even have latex in our hands, which can help us penetrate the market. We look up to them but we also aspire to be like them,” he remarks. On concerns over a potential oversupply with the glovemakers’ aggressive expansion plans, he says global demand remains robust, driven mainly by increasing awareness of health and hygiene in emerging markets as well as the ageing population in the region.
Source: Daily “The Edge”, Kuala Lumpur; 26 Dec 2018
(Syed Rashid Ali, Karachi, Pakistan)