Message from Chairman

Message from Chairman

The past year has been a challenging year for the global rubber glove industry due to the abatement of the Covid-19 pandemic situation compounded by the huge and rapid increase in the supply resulting from the soaring price of rubber gloves during the contagion. As a result, each manufacturer in the industry has had to struggle and adapt to survive by adopting various different business models.

The Company believes that competition during this recalibration of the market, or this normalization phase, may cause small entrepreneurs with not much financial strength, or insufficient expertise in the production of rubber gloves, or even those who are unable to adapt to this challenge to lose out to other operators and necessitate an exit of the market.

However, this challenging situation is not new to the Company. For more than 30 years STGT has gone through cycles of fluctuating demand, including several waves of similar increase in supply in this manner, such as the outbreak of HIV, SARS, avian influenza (H1N1/H5N1), MERS, Ebola, and Covid-19. Overcoming these unfavorable situations call for strength in terms of production, management, finance, flexibility to adapt and the initiative to try new things which require the cooperation as well as the patience and courage of all executives and employees collectively.

STGT is the number 1 manufacturer and distributor of rubber gloves in Thailand and 1 of the top 5 in the world, thereby rendering STGT as one of the most trusted choices among customers, both in terms of quality and variety of products to meet the needs of different applications, whether nitrile rubber gloves or natural latex gloves. These are products which the Company has cost advantages and strong supply chain management from being a subsidiary of Sri Trang Agro-Industry Public Company Limited (STA). The Company is also a leader in the production of quality rubber gloves using the world’s most efficient machinery. In addition, STGT also chooses to use woodchip, a fuel that results in lower production costs and less volatility compared with other competitors who use gas or coal as fuel in production, while also being environmentally friendly with significantly lower greenhouse gas emissions than fossil-based fuels. Moreover, STGT adheres to international standards of labor recruitment and treatment of workers which has won the Company highest awards and ratings from various institutions.

STGT’s financial status remains strong and ready to cope with challenging situations. As at the end of 2022, the Company has cash of over THB 14,400 million and a net interest bearing debt to equity ratio of only -0.15 (Cash and cash equivalent is greater than Interest bearing debt.), which is better than many competitors in the market.

Strategically, in the midst of challenging situations, STGT has focused on cost reduction to increase competitiveness with the aim to expand market share to potential new markets, as well as increasing the variety of products such as low-protein natural latex gloves, surgical gloves and other specialty gloves in order to meet all the needs of users and further expand its market.

In terms of business operations, STGT has always recognized the importance of environment, social responsibility and corporate governance along with business operations according to ESG principles. In addition to the achievements in 2022, as evidenced by a significant increase in the ESG Score from S&P Global, the Company remains committed to continuing its focus on conducting business with ESG values and is determined to be a leader in the rubber glove industry in all aspects of ESG.

• Environment: In addition to producing gloves using environmentally friendly energy as mentioned, in 2022 STGT also issued its first green bond with an amount of THB 1,500 million to promote environmental projects. This has been well received by investors, reflecting the confidence of investors towards the Company.
• Social: STGT recognizes and takes into account human rights and well-being of employees at all levels without discrimination. This has also been extended to surrounding communities for sustainable coexistence between businesses and communities.
• Governance: It is with great pride that STGT has upgraded its corporate governance score to 5 stars or excellent for the first time this year, while also still being selected as 1 of the Sustainable Stocks (THSI) for the 2nd consecutive year.

With STGT’s experience, expertise and competitive advantages over competitors, whether in terms of products, supply chain, outstanding ESG strength, financial strength and the drive to never stop developing, the Company believes that it will definitely be able to get through this challenging time.

STGT would like to thank all stakeholders for providing steadfast support to the Company and we sincerely hope to receive continued support from all parties in the coming years so that we can achieve sustainable growth together.