SRI TRANG GLOVES (THAILAND) MAKES LISTING DEBUT ON THE MAINBOARD OF THE SGX–ST

• Marks its secondary listing in Singapore
• Largest rubber glove manufacturer in Thailand and third largest in the world with a total of 147 production lines and an installed capacity of 33.3 billion pieces of gloves per year

Singapore – 10 May 2021 – Sri Trang Gloves (Thailand) Public Company Limited (“STGT” or the “Company”, SET stock code: STGT; SGX-ST stock code: STG), which engages in manufacturing and distributing rubber gloves mainly for medical use, in conjunction with its secondary listing by way of introduction (the “Introduction”), makes its listing debut on the Mainboard of the Singapore Exchange Securities Trading Limited (“SGX-ST”) today at 9.00 am Singapore time.

STGT currently has a primary listing on The Stock Exchange of Thailand (“SET”) and will continue to be listed and traded on the SET following the completion of the Introduction. Based on the closing market price of the Company’s shares quoted on the SET on 7 May 2021 of THB 45.25, STGT has a market capitalisation of approximately THB 129.3 billion (approximately S$5.5 billion ). Last year, STGT had raised THB 14.0 billion (approximately S$669.6 million) in an initial public offering in conjunction with the Company’s listing on the SET on 2 July 2020.

The Company’s controlling shareholder Sri Trang Agro-Industry Public Company Limited (“STA”) also has a primary listing on the SET and a secondary listing on the SGX-ST. STA is the world’s leading fully integrated natural rubber company with a market share of 8% of global natural rubber consumption in 2020.

Ms. Jarinya Jirojkul, Chief Executive Officer of STGT said, “Today marks a significant milestone in our Company’s history. We are confident that our listing on the SGX-ST will raise our profile amongst the investing community in the region and strengthen the market’s understanding and appreciation of our business. With our dual listing status in Thailand and Singapore, STGT will be in good stead to access the capital markets in both financial centres and maximise our growth potential.”

DBS Bank Ltd. acted as the issue manager in relation to the Introduction. The shares of STGT are traded on the Mainboard of the SET in Thai Baht, and on the Mainboard of the SGX-ST in Singapore dollars.

32-year legacy as a rubber gloves expert

STGT’s legacy stretches back to 1989, where the Company has been manufacturing and distributing rubber gloves for medical use and use in other industries. With its main products comprising powdered natural rubber gloves, powder-free natural rubber gloves and nitrile gloves, most of its rubber gloves are manufactured and distributed for medical use.

As of the Latest Practicable Date , the Company operates three production plants located in Hat Yai (Hat Yai District, Songkhla Province), Surat Thani (Kanchanadit District, Surat Thani Province) and Trang (Kantang District, Trang Province). All of its factories are certified for quality management systems after having met standards such as ISO 9001:2015 certification (Quality Management System) and EN ISO 13485:2016 certification (Medical Devices-Quality Management System).

STGT places strong emphasis on best practices of workforce treatment since its employees are its most important asset, and the Company pays close attention to details around security, welfare and environment. STGT is proud to be a medical glove company to receive an “A” Grade for its Hat Yai and Trang factories from amfori BSCI, a European based association that helps a business monitor its supply chain to ensure that all suppliers are treating workers ethically and legally. The Company’s long-term objective is to create a safe and conducive work environment by treating its employees fairly and providing favourable workplace conditions to enable a culture of happiness.

The largest rubber glove manufacturer in Thailand and third largest in the world

With more than 7,800 employees, a total of 147 production lines and an installed capacity of approximately 33.3 billion pieces of gloves per year, STGT believes this makes the Company the largest rubber glove manufacturer in Thailand and the third largest in the world.

STGT’s 3,700 global customers offer a geographically diverse customer base, and its products have made inroads to more than 140 countries worldwide, having been exported to countries in North America, South America, Europe, Asia Pacific, the Middle East, Africa and Oceania.

The Company’s products comprise natural rubber gloves using concentrated latex and nitrile gloves using nitrile butadiene rubber, a synthetic latex. Natural rubber gloves, produced using concentrated latex, provide flexibility and wearing comfort. Compared to nitrile gloves, natural rubber gloves are biodegradable and therefore more environmentally friendly. About 60% of STGT’s gloves sold in the financial year ended 31 December 2020 (“FY2020”) were natural rubber gloves.

Currently, the Company’s nitrile gloves and powder-free natural rubber gloves are mainly used by customers in developed countries, whereas powdered natural rubber gloves are mainly used by customers in developing countries.

Testament to its quality standards and compliance, STGT’s products meet both domestic and international standards in terms of quality of production processes and products. These include its ISO certifications, GMP certification of compliance with the criteria and methods for good manufacturing of medical devices, US Food and Drug Administration approval (510K) and European medical device standards (Medical Device Directive).

Focus on continuous innovation and research & development (“R&D”)

At STGT, its in-house R&D team constantly strives to develop products that can meet the exacting needs of its consumers – both in terms of quality, such as the thinness of the rubber gloves which affects durability and comfort; as well as appearance, such as the use of different colours for variety. In addition, STGT works tirelessly to improve the quality of its gloves in accordance with international and national quality standards across various industries.

The use of automation is also widely practiced at STGT in order to improve efficiency and reduce reliance on manual labour. The Company plans to trial and increase the use of automation in areas such as using a sterile packing machine, glove testing and sorting, loading of goods onto shipping containers, and an automated warehousing system, amongst others.

STGT has also been working on reducing its carbon footprint particularly in the areas of energy and water conservation. Having installed various systems such as high-efficiency refrigeration and compressed air systems, and focusing on the use of clean energy instead of fuel oil for its production process, the Company has achieved success in reducing its impact on the environment.

Robust financial profile with strong CAGR growth in the last 3 years

STGT enjoys a strong reputation and long track record of operating in the rubber glove industry, with attention to high quality and service standards. Accordingly, the Company has amassed a strong track record in terms of its financial performance.

For the financial years ended 31 December 2018 (“FY2018”), 31 December 2019 (“FY2019”) and in FY2020, the Company’s revenue grew at a compounded annual growth rate (“CAGR”) of 40.4%. Over the same period, the Company’s profit attributable to equity holders of the company rose at a CAGR of 144.8%, with a strong net profit margin of 47.4% for FY2020.

* Based on the average daily closing exchange rate between the Baht and Singapore dollar of THB 22.68 = S$1.00 for FY2020

STGT’s policy is to pay a dividend of at least 50.0% of net profit based on the Company’s standalone financial statements for each financial year, after deducting the required allocation for all types of reserves.

Looking ahead

STGT’s factories are strategically located in south Thailand, which is home to rich rubber plantations and is also the main production site of latex, the main raw material for the production of its natural rubber gloves. This allows the Company to source concentrated latex at a lower cost than its major competitors in the region. Over the next few years, STGT will expand its production capacity in Thailand to support the growth of the rubber glove industry.

These include 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; through investment in expanding production capacity in its current production plants and in new locations organically. To that end, the Company plans to expand its factories in Surat Thani and Trang, while constructing 3 new factories – PS Factory in Sadao District, Songkhla Province, Anvar Factory in Sumnakkham District, Songkhla Province, and Chumphon Factory in Pathiew District, Chumphon Province. The Company will also explore expansion through possible mergers or acquisitions where appropriate.

In addition, STGT plans to maintain its primary focus on natural rubber glove production while also optimising its level of nitrile glove production to meet the diverse needs of its global customers. Keeping production costs manageable will also factor as part of its growth strategy, as STGT looks to optimise production through increased automation and reduced costs, particularly with its plans to expand in existing and new emerging markets moving forward.

As part of its growth plans, STGT will also aim to increase the proportion of its owned trademark products, which will help manage long-term costs as a result of reduced complexity of production and packaging arrangements.

Trends in the rubber glove industry

Amid the ongoing COVID-19 pandemic, the Company expects global demand for rubber gloves to exceed supply in the next 12 months. Despite the roll-out of COVID-19 vaccines in many countries and the increasing supply of such vaccines from existing and new manufacturers, this is not expected to have a significant effect on demand for rubber gloves in the short-term.

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. Accordingly, STGT expects demand for its rubber gloves to sustain at high levels in the long-term as it believes that rubber gloves will become standard personal protective equipment not only in developed markets like the US, the EU and Japan, but also in emerging markets.

STGT has also seen increased demand for its rubber gloves for non-medical uses as a result of the COVID-19 pandemic. In 2020, the Company experienced an increase in demand for its rubber gloves beyond the hospitals and clinics sector, in industries such as food and catering, transportation and security. The Company is of the view that demand for rubber gloves for non-medical uses will continue to increase globally.

Gallery