BANGKOK -- Sri Trang Gloves Thailand, the country's biggest producer of medical gloves, has filed for an initial public offering on the Stock Exchange of Thailand to raise funds to increase production capacity, with the company seeing substantially increased demand for its products as a result of the new coronavirus pandemic.
"Glove demand tends to rise globally in line with the [growth of the] medical sector, and the coronavirus pandemic has also pushed demand much higher," said Jarinya Jirojkul, chief executive of Sri Trang Gloves. "That has encouraged our company to raise funds from the Stock Exchange of Thailand for the expansion."
The company plans to offer 444.78 million existing shares from its parent company, which accounts for about 31% of the total shares, she said. However, details of the IPO price have not yet been released.
The chief executive said the funds raised would be spent on plant expansion, with the company aiming to be among the world's top three producers of rubber gloves over the next few years, challenging the world's biggest producer, Malaysia-based Top Glove, which has annual production capacity of 74 billion pieces from 44 factories.
Sri Trang Gloves plans to increase annual production to 32 billion gloves in the coming weeks, up from the 27 billion that it now manufactures at factories in Thailand.
The Malaysian Rubber Glove Manufacturers Association earlier forecast global glove demand to rise by 12%, to 300 billion pieces this year. Officials now expect demand to rise further as the pandemic continues to create need among hospital workers around the world.
Founded in 1989, Sri Trang Gloves has seven facilities in Thailand, producing latex gloves, latex powdered gloves and nitrile gloves. Most of its products are for medical use and are exported to 130 countries across the world.
The company posted total revenue of 12 billion baht ($370 million) in 2019, up 10% from the previous year, with a net profit of 613 million baht.
Sri Trang Gloves is a subsidiary of Thai-listed Sri Trang Agro-Industry, the world's leading fully integrated natural rubber group. After the proposed IPO, Sri Trang Agro-Industry will remain the major shareholder of Sri Trang Gloves, holding a 50.7% stake.
Sri Trang Gloves says this means it will have ample supply of natural rubber latex at competitive prices, since Sri Trang Agro-Industry owns approximately 7,200 hectares of rubber plantations in 19 provinces in Thailand -- the world's biggest rubber producing country.