THAILAND: Sri Trang tries on medical gloves

Sri Trang Agro-Industry, the world's largest natural rubber firm, plans to drastically boost production of medical gloves to capitalise on falling rubber prices. This year, Sri Trang will acquire an existing glove factory in Thailand, while also building two new factories set to be complete in 2020. The company has four glove factories and 36 natural rubber processing plants. Sri Trang plans to produce 21 billion gloves this year, up from 16 billion in 2018. By 2020 they hope to make 30 billion gloves.

"Ageing populations and an emerging middle class in developing nations will mean more people are using medical services and demand for medical gloves will rise," said Veerasith Sinchareonkul, executive director of Sri Trang. He expects demand for gloves to grow for at least the next 15 years. Demand for medical gloves grew 7 % over 2018-19. The price of rubber has dropped 50 % in the past two years due to oversupply from farms in Thailand, Malaysia and Indonesia. Prices have fallen every year for the past six, except in 2016.

Low prices make exporting raw natural rubber less lucrative, so the company is upping production of gloves to offset this risk. Revenue is comprised of 80 % from natural rubber and 20 % from medical gloves, figures the company wants to make more or less even over the next 5-10 years. "We have a lot of experience managing a market with falling prices," Mr Veerasith said. "As raw material prices are lower, factories have lower costs to produce gloves. If the price keeps going down, we can keep the glove price the same for a while."

Source: Daily “The Bangkok Post”, Bangkok; 12 Feb 2019
(Syed Rashid Ali, Karachi, Pakistan)