Message from the Chairman of the Board of Directors
The year 2024 remains one of considerable challenge and complexity for both the global and Thai economies. We are confronting ongoing volatility and uncertainty driven by multiple factors—from uneven economic recovery and geopolitical tensions to climatic and environmental changes—each of which directly influences our overall economic landscape and the rubber industry in particular.
Climate change and increasingly stringent environmental regulations continue to play a significant role in shaping the industry’s outlook. This year, the El Niño phenomenon has profoundly affected rubber production; reduced rainfall and drought conditions across numerous regions have resulted in a notable decline in yield, causing rubber prices to rise by approximately 40% compared to 2023.
Despite these headwinds, the demand for rubber remains robust, particularly driven by the recovering automotive sector and growing global environmental compliance standards, such as the European Union Deforestation Regulation (EUDR). Such a regulation has further contributed to the upward movement of rubber prices, impacting raw material costs severely.
Nevertheless, our company remains steadfast in its commitment to continuous improvement and adaptation. Since our listing on the Stock Exchange of Thailand in 2018, we have maintained steady growth, with annual sales increasing by an average of 18.22%, and net profits rising by 22.61%, underlining our financial robustness, profitability, and ability to generate sustainable returns for our shareholders.
In 2024, we have revised our organizational vision and mission to more accurately reflect our core principles and strategic focus on creating value and fostering a sustainable future for all communities involved. Beyond delivering high-quality, diverse natural rubber products to meet market demands effectively, we take pride in contributing to the sustainable development of our communities—creating livelihoods, employment opportunities, and improving the quality of life for Thai rubber farmers and local residents alike, fostering growth and stability across our operational footprint.
Our operational framework, “NER,” emphasizes three key pillars:
- Nurture Nature: Since the environmental sustainability is a global challenge, we are committed to environmental preservation by using clean energy, reducing our carbon footprint, promoting resource reuse throughout all processes, and expanding to the entire supply chain. We also continuously invest in research and development to create innovative products that support the transition toward a low-carbon society.
- Empower People: We focus on developing human potential, caring for employees’ physical and mental well-being to foster happiness at work, and improving the quality of life for all within the organization and local communities—covering economic, environmental, educational, health, and safety aspects.
- Rubber and Beyond: We aim to increase our capacity to 515,600 tons per year and expand into downstream industries to add value to natural rubber—such as rubber flooring for livestock under the Cattle Flex brand.
At the core of our corporate philosophy lies a steadfast commitment to integrity, fairness, and respect for human rights throughout our entire value chain. We adhere to transparent, verifiable standards to ensure our stakeholders, whether large corporations or small partners, benefit equitably and ethically.
Our efforts in social responsibility and environmental stewardship, supported by robust governance practices, have been recognized through numerous accolades in 2024. These include continuous inclusion in the SET ESG Ratings at the “A” level, the Excellent Corporate Governance Award for four consecutive years, the CAC Certification for anti-corruption, and a Bronze EcoVadis sustainability rating for five successive years, among others.
We take great pride in every milestone achieved and every value created. Looking forward, our strategic objectives include achieving carbon neutrality by 2030 and expanding our manufacturing bases into new communities within Thailand and Africa. These initiatives aim to generate sustainable economic value, support environmental stewardship, and promote high-quality socio-economic development at every level of our operation.
On behalf of the Board of Directors, I wish to extend my sincere gratitude to all shareholders for your unwavering trust and ongoing support. We pledge to continue our efforts with dedication and integrity, aiming to deliver superior performance and sustainable value for all stakeholders.
Message from the Chief Executive Officer
The year 2024 has proven to be a challenging year for the global business sector, including Thailand's rubber industry. Amidst a volatile global economic environment impacted by multiple factors such as trade wars, inflation, and rising interest rates, there have been significant effects on global rubber demand, leading to considerable fluctuations in rubber prices. Additionally, the intensifying climate change has caused severe drought in several regions of Thailand, inevitably affecting rubber production volumes.
However, the company has been able to adapt and manage operational risks effectively by adjusting its production processes to ensure traceability for EUDR-compliant products, thus increasing customer confidence by inviting third parties to audit the production processes under EUDR. The development of new products and market expansion to new customer segments resulted in the company achieving a sales revenue target of 27.448 billion THB in 2024, representing a 10% increase, and a net profit of 1.652 billion THB, up 7% compared to 2023.
The economic outlook for 2025 remains fraught with uncertainty. However, with government economic stimulus policies and the recovery of the global automotive industry, there will be support for improved rubber demand both domestically and internationally. The average price of rubber is projected to be 70 THB per kilogram, which will positively affect the company's revenue growth. Moreover, several manufacturers from China, affected by the trade tensions between the United States and China, have relocated their production bases to Thailand, allowing the company to expand its domestic customer base. Nevertheless, the company must remain vigilant regarding risk factors that could impact its business, such as the emergence of new infectious diseases, changes in government policies, exchange rate volatility, and regulations related to agriculture and international trade. The company has meticulously managed these risks and established appropriate measures to ensure continuous operations and long-term growth.
In addition to creating business value, the company places significant importance on sustainable growth alongside society, in line with its purpose "NER Creating value beyond rubber" and its vision "We are a global frontrunner in natural rubber solutions, creating superior value and a regenerative future for all the communities we are truly part of." The company therefore operates within a framework dedicated to sustainability, "N E R," and has established the "4Ds (Good)" strategy focusing on balancing business success, social development, and environmental care to achieve sustainable outcomes in all dimensions.
- D (Good) Product: We manufacture and develop a diverse range of high-quality rubber products through innovation and competitive cost advantages, effectively meeting customer demands with an annual production capacity of 515,600 tons. Additionally, we are expanding into downstream industries to enhance the value of natural rubber, such as rubber mats for livestock under the Cattle Flex brand. This not only adds value to natural rubber but also supports the utilization of domestic raw materials, generates income for farming communities, and meets consumer demand for safe and environmentally friendly products.
- D (Good) Supplier: We develop a transparent and fair supply chain while adhering to good governance principles, strictly complying with laws and human rights standards. We have elevated quality standards to align with international levels. The company has established a comprehensive ESG risk management system throughout the value chain and conducts ESG risk assessments for critical suppliers. Furthermore, we support the development of agricultural suppliers' capacities to mitigate operational risks and enhance their ability to supply sustainably and environmentally certified raw materials such as EUDR and FSC, alongside various standards that reflect our commitment to conducting sustainable rubber business practices.
- D (Good) Environment: We have set a target to achieve carbon neutrality by 2030. The company is committed to continually reducing combined GHG Scope 1&2 Intensity to 0.056 tons of CO2 equivalent per ton by 2024, while promoting resource recycling in all processes. For instance, we aim to reduce reliance on external water by utilizing 100% recycled water and limiting the percentage of waste directed to landfills to 4.04% of total waste. Additionally, we are engaged in research and development of products and innovations in manufacturing processes that support the transition to a low-carbon society.
- D (Good) Community: We promote development and participation of everyone in the workplace and local communities for the safety and well-being of all. The company prioritizes employee care, addressing employee needs and expectations appropriately to ensure physical and mental health, as well as job satisfaction. Moreover, we enhance personnel capabilities that support job performance and company growth, resulting in an employee engagement score of 85.88% in 2024. Additionally, the company has initiated various projects focused on local community development in areas such as economy, environment, education, health, and safety. For example, we primarily support local employment, with 84.48% of our employees residing in Buriram Province, where the company is located. We promote clean energy use and continuously reduce environmental impacts through initiatives like the NER project supporting sustainable agricultural practices, sustainable supply chain development, green market activities, health check-ups and preventive health care for vulnerable groups, and supporting and enhancing the education of nine local schools, among numerous other initiatives.
The company will continue to be committed to creating value for all stakeholders in the future, particularly within the communities where we coexist. We firmly believe that sustainable business operations can only be achieved through genuine collaboration across all sectors to create economic value, foster sustainable environments, and build quality societies in every location where we operate.
"With a vision to lead the rubber industry, I firmly believe that the company will achieve sustainable growth while delivering significant returns to all our shareholders, in tandem with our commitment to creating value for society."