In a recent interview with Kaohoon, Mr. Chuwit Jungtanasomboon, CEO of North East Rubber Public Company Limited (SET: NER), detailed the company’s robust performance in 2025 and its strategic pivot toward the Indian market for 2026. Following a record-breaking year, NER is focusing on capacity expansion and financial discipline to ensure long-term stability.
NER concluded 2025 with a “New High” in net profit, reaching 1,085 million baht on sales of 475,000 tons. The company maintained a gross profit margin of 9.7% and a net profit margin of 6.2%. Despite rising commodity prices, Mr. Chuwit noted that current raw material supply is limited due to the “tapping break” season in Thailand.
To mitigate risk, NER employs a back-to-back sales strategy, only committing to orders based on the volume of raw materials purchased daily. This approach protects the company from price volatility while capitalizing on current market psychology, where rising prices often accelerate customer decision-making.
While China has historically accounted for nearly 90% of NER’s business, the company is aggressively expanding into India. Driven by India’s growing EV sector and tyre demand, NER has already secured three major Indian clients and is in talks with a fourth, the country’s largest. Mr. Chuwit expects India’s contribution to total production to rise from less than 5% last year to 15% in 2026.
To support this growth, NER aims to increase its production capacity from 510,000 tons to 560,000 tons this year by upgrading existing machinery. Plans for a third factory are ready, pending negotiations with a bond guarantor; once cleared, construction could be completed within eight months.
Financially, NER has adjusted its dividend payout ratio from the traditional 40% down to 25–26%. Mr. Chuwit explained that the company intends to use 1,000–2,000 million baht in retained earnings to fund expansions directly rather than relying solely on bank loans. This shift aims to reduce interest burdens and create a more sustainable capital structure.
Furthermore, last year’s profit included a 200-million-baht insurance claim earmarked for reconstructing fire-damaged warehouses, further necessitating the retention of funds.
Looking ahead, Mr. Chuwit remains confident that profitability will remain stable. With early rains potentially leading to an earlier harvest and strong demand from the global tyre industry, NER is well positioned for continued growth.
