Global surge in glove demand protects Thai rubber business
BANGKOK, NNA - The second-quarter results of a leading Thai manufacturer of rubber products bear out the contrast between the demand for gloves and vehicle tyres in pandemic times.
While sales of its protective medical gloves surged by nearly 30 percent, the demand for its rubber for producing tyres had slowed down significantly because of lockdowns and social-distancing measures affecting business activities and movements.
Sri Trang Agro-Industry PCL saw rubber gloves sales for the medical segments jumping 29.2 percent from last year to 4.85 billion baht ($153.14 million) in Q2 of 2020.
In the first half of the year, Sri Trang distributed over 13.7 billion pieces to the domestic and international markets.
For Asia, its sales amounted to 44.2 percent while exports to Europe and North America contributed 19.3 percent and 17.4 percent respectively.
The high demand helped push Sri Trang group’s overall revenues up by 9 percent to 32.7 billion baht in the first half of 2020, when compared with the same period last year, according to the company’s statement.
On the other hand, the company received few or even no orders for its rubber material for the automotive industry during the months in Q2 when many places all over the world were imposing severe lockdowns to fight the spread of the coronavirus.
Its once rising-star product called technically specified rubber (TSR) or block rubber, mainly used for making automotive tyres suffered a major slump.
In Q2 of 2020, its TSR sales fell to 9 billion baht from 11.6 billion in the previous quarter and 10.38 billion from the same period last year.
“Due to COVID-19, this is the first time we saw some rubber tyre companies shutting down for one month, some two or even three months,” Tipwadee Soodweha, the company’s head of investor relations said in a teleconference recently.
From January to August, Thailand’s automotive industry churned out only 812,721 vehicles, which is a huge contraction of 42.08 percent from 2019, according to Surapong Paisitpatanapong, the vice president for automotive sector of the Federation of Thai Industries.
Thailand exported 441,459 units, a sharp fall of 39.01 percent from the same period last year, he said.
But rubber products and tyres for the automotive market are expected to slowly recover, according to Supapong. In August, 117,253 vehicles were produced, an increase from July's 89,336 units.
The improved performance was helped by the easing of lockdowns and government support for events such as Big Motor Sales and Bangkok Motor Show, said Surapong.
Sri Trang Agro’s executive director Veerasith Sinchareonkul also expects to see rubber production increase with automotive recovery.
To compensate for losses during the throes of the pandemic, the company plans to increase its online presence with a mobile application and enhance production efficiency by automating more processes, said Tipwadee.
For now, Sri Trang Agro is continuing its focus on rubber gloves. It aims to achieve its goal in producing 35 billion pieces by 2021 and 70 billion pieces by 2026.