Investor Day Presentation 18 May 2015 A World Leading Natural Rubber Player
Disclaimer Certain forward looking statements may be made in the course of the presentation. These forward- looking statements generally can be identified by use of statements that include words or phrases such as STA or We or our management “believe”, “expect”, “anticipate”, ”intend”, ”plan”, ”foresee”, ”project”, ”may”, “will”, “shall”, or other similar words or phrases. Similarly, statements that describe STA’s objectives, plans or goals also are forward-looking statements. These statements involve known and unknown uncertainties and risks that could differ materially from actual results, performance or events. The forward-looking statements contained in the slides are not and should not be constructed as representations of the future performance of STA and that such statements are an expression of the Company’s reviews based on its current view and certain assumptions including, but not limited to, prevailing economic and market conditions and currently available information. The reader or the listener is cautioned to not unduly rely on these forward-looking statements. We do not undertake any duty to publish any update or revision of any forward-looking statements. 1 1
Our Directors Present for the Investor Day 2015 Dr. Viyavood Sincharoenkul Kitichai Sincharoenkul Paul Sumade Lee Chairman & Managing Director Executive Director Executive Director Founding member of Sri Trang and Joined Sri Trang in 1988 and has served Joined Sri Trang in 2004 and appointed appointed as Chairman in 2010 as a Director since 1995 as a Director in 2010 28 years of experience in the natural 25 years of experience in the natural 10 years of experience in the natural rubber industry rubber industry rubber industry Prakob Visitkitjakarn Neo Ah Chap Veerasith Sinchareonkul Chairman of Audit Committee Independent Director Chairman of Risk Management Committee Appointed as an independent director Appointed as an independent director Appointed as a Director since 2010 since 1993 since 2010 2 2
AGENDA I. Sri Trang Business Highlights II. Natural Rubber Industry Snapshot III. Financial Highlights
Fully Integrated and Globally Natural Rubber Supply Chain Finished Products Rubber Plantation Processing Sales & Distribution • World leading capacity at • Having trading and • Largest glove manufacturer • Having our own rubber 1.35 million tons per annum distribution centers in key in Thailand plantation in Thailand strategic countries in Thailand and Indonesia • Produce both latex and • Cover full range of products nitrile examination gloves from RSS, TSR and Concentrated Latex Note: Information as of 31 March 2015 4 4
Sri Trang’s Strengths 1 Fully-integrated NR supply chain business model Sales & Distribution Processing Plantation Be flexible to any market Gain direct access to supply First-hand understanding of conditions and able to manage information customer requirements Ability to control the quality of production and position Quick access to reliable market supply efficiently information Well-managed Cost efficiency High quality product operation High productivity High performance Enhance profitability 5 5
Sri Trang’s Strengths ( cont’d) 2 A world largest NR processing Company (10% market share) • Capture all possible market segments with full range of Natural Rubber products • Benefit from economies of scale • Balance the bargaining power with suppliers and customers • Enhance accessibility to different sources of fund TSR RSS Con. Latex to support operation and expansion 3 Having production base in major NR producing countries • Excellent diversification • Advantage in secure raw material as Thailand and Indonesia collectively contributed about 60% of global production • Well-balanced seasonal management Indonesia Thailand 6 6
Sri Trang’s Strengths ( cont’d) 4 Well-balanced portfolio for coverage of sales and distribution • Cover all class of customers to serve all demand from every corner of the word • Good risk diversification as no single customer accounts more than 8% of our total sale volume • Get direct access to end-users to gain demand flow and market sentiment 5 Continually expand business to the new territories • A newly established company in Vietnam will enable us to expand market coverage in Indochina and gain direct access to Vietnam, the world’s third largest Natural Rubber producer • Having a block rubber factory in Myanmar will create a business opportunity in highly growing country for Natural Rubber 6 Expand upstream to rubber plantation business • Emphasize on cost leading position • Enhance profitability and reduce volatility in earning • Pinpoint strategic locations for midstream factories in the future 7 Captained by highly experienced managements • Led by a group of seasoned managements with almost 3-decade of experience in natural rubber industry 7 7
AGENDA I. Sri Trang Business Highlights II. Natural Rubber Industry Snapshot III. Financial Highlights
World Natural Rubber Balance Unit : million tons 14 12 12.3 12.4 12.2 11.9 11.8 11.6 11.4 11.2 10 11.0 11.0 10.8 10.4 10.2 10.1 10.1 10.1 9.9 9.7 9.7 9.3 8 9.2 9.0 8.8 8.7 8.1 7.9 6 4 2 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f Demand Supply Supply Surplus Unit : ‘000 tons Supply deficit due to 1,000 831 the falling NR prices 800 lowered tapping & 568 delayed replanting 600 434 400 269 219 152 100 200 77 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f (200) (81) (89) (194) (45) (400) (370) (600) 9 9
World Major NR Producing and Consuming Countries Major suppliers of Natural Rubber Major consumers of Natural Rubber (by tonnage) (by tonnage) Others 12% Others 26% Indonesia India 6% 27% China 38% Vietnam 8% Thailand 5% Malaysia 6% Japan 6% China 7% Thailand 35% India 9% USA 8% Note: Information of year 2014 Europe 9% 2015 NR production forecast 2015 NR consumption forecast 4,500 12.0% 5,000 6.0% 10.8% 5.4% 4,000 10.0% 4,500 4,170 5.0% 4,669 3,500 8.0% 4,000 4.3% 8.6% 4.0% 4.0% 3,500 3,000 6.0% 3.9% 3,101 3,000 2,500 4.0% 3.0% 2,500 2,000 2.0% 2.0% 2,000 0.6% 1.6% 1,500 0.0% 0.0% 1,500 0.0% 1.0% 1,000 -2.0% -4.9% 1,000 1,097 946 1,148 0.0% 500 -4.0% -0.6% 1,069 811 988 667 500 674 567 0 -6.0% 0 -1.0% Thailand Indonesia Vietnam China India Malaysia China Europe India USA Japan Thailand NR Production (tons) %growth from 2014 NR consumption (tons) %growth from 2014 Source: IRSG, 10 10
Lower Supply Surplus Significant drop in supply surplus NR planting area of main producers Unit : 000’Hectares Unit : 000’ tons New planting (LHS) Replanting (LHS) 600 12,500 1,000 Lower supply surplus due to smaller new 831 Total area (RHS) 12,000 planting area from 2009 onwards 500 800 11,500 400 568 11,000 600 300 10,500 400 10,000 200 219 9,500 200 100 77 51 85 73 71 95 86 71 75 9,000 -45 0 8,500 0 (200) Global natural rubber production by country Area for rubber plantation Unit : ‘000 tons Immature area (000' Hectares) 5,000 4,000 3,656 Tapped area (000' Hectares) 4,500 3,500 640 Yield per hectare (Kg.) 4,000 2,817 3,000 62 3,500 2,500 3,000 2,500 2,000 2,000 3,016 1,500 2,755 1,148 1,079 980 1,500 814 1,000 428 405 429 1,000 341 362 500 720 140 500 575 650 473 247 25 115 115 0 0 Malaysia Indonesia Thailand India Source: IRSG, ANRPC, 11 11 PRC Vietnam Other
NR Demand Driven by Tyre Industry NR mainly used in tyre industry NR demand mainly driven by world activities (by tonnage) GDP (LHS) NR consumption (RHS) 6% 20% 5% 15% Non-tyre 31% 4% 10% 3% 5% 2% 0% Tyre 69% 1% -5% 0% -10% -1% -15% Global tyre production trend (Million units) Global vehicle trend (Million units) 3,000 6% 1,800 6% 2,500 5% 1,500 5% 2,000 4% 1,200 4% 1,500 3% 900 3% 1,000 2% 600 2% 500 1% 300 1% 0 0% 0 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Vehicles in use (LHS) Tyre production (LHS) %Growth (RHS) Vehicles production (LHS) %Growth vehicles in use (RHS) %Growth vehicles production (RHS) Source: IRSG, IMF 12 12
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