Southland Global – Support from Asia to Africa

Responsible for producing around 11 per cent of the world's natural rubber supply, Thailand’s Southland Rubber Group is a leading global natural rubber processor and exporter, with a strong regional presence.

With its financial operations working out of Singapore under Southland Global, the group’s expansion efforts have extended beyond ASEAN – to as far as Ivory Coast in Africa. The company is also a member of the Global Platform for Sustainable Natural Rubber (GPSNR), underscoring its commitment to sustainable practices within the industry.

As Southland’s financing partner, UOB has played a key role in the company’s growth, offering both local insights and sectoral expertise. The Bank's regional footprint – extensively covering ASEAN and Greater China markets – ensures that Southland's diverse operations can function effectively across territories.

Specifically, UOB’s all-encompassing umbrella limits financing solution – which involves a central funding facility – is highly customised to satisfy Southland’s unique business requirements and factors such as rubber seasonality across different markets. This means that Southland can re-allocate funds flexibly across existing subsidiaries and factories.

As Southland seeks to expand its operations in the Asia Pacific region, the company remains committed to addressing Environmental, Social, and Governance (ESG) risks. With a shared commitment, UOB is also providing sustainability-linked trade financing to support the company's supply chain and working capital requirements.

With comprehensive solutions tailored to clients’ needs, UOB’s “One Bank” approach connects businesses to growth opportunities in the region, and beyond.

About this series

Building Asia is a collection of business stories on CNA that examines the financial forces driving Asia’s position as an economic powerhouse.

Southland Global – Support from Asia to Africa was first aired on 8 May 2023 under the Building Asia with UOB series. Watch how Southland Global leveraged UOB’s sectoral expertise, extensive network and bespoke solutions to support its unique business requirements globally.

Transcript

Koh Ai Wee (Director and Chief Financial Officer, Southland Global Pte Ltd):

Southland Rubber Group is one of the world's leading natural rubber processors and exporters. We are actually among the top three world rubber processors and produce around 11 per cent of the world's natural rubber supply. We have 35 factories across the region, including Malaysia, Vietnam, Thailand, Indonesia and as far as Ivory Coast.

Eric Lian (Head, Group Commercial Banking, UOB):

UOB has banked with Southland for more than 20 years, and we do know them very well. We have got deep expertise in the rubber business that they are in today.

So, with the expertise, we work with them across all their operations in the region, where we provide working capital facilities for them as a Group, where we can then allocate our facilities as and when they need it within the region.

Eric Lian:

So, these are the rubber crumbs that you have been talking about?

Koh Ai Wee:

Yes, there's actually another name, called the technically specified rubber (TSR), and this block is actually produced in our Thailand factories, whereas this one is from the African factory.

Eric Lian:

Oh, Ivory Coast.

Koh Ai Wee:

Yeah, Ivory Coast. As we know, rubber has a tapping season, and during the peak season, we will need more funds and that is why UOB has come in to support us as our requirements for financing could be quite huge.

Eric Lian:

Because we know Southland well and we know the industry well. We have come up with this umbrella facility for the whole Group. What it really means is that the Group just needs to talk to one point of contact which we have here in Singapore, playing the role of a Group Relationship Manager understanding the Group's needs. And then we will allocate the limits across the various factories to be able to maximise the cash flow.

Koh Ai Wee:

We work through UOB’s international branches to allocate all the funds and we can actually control it, as well as monitor it, from Singapore.

Eric Lian:

So, beyond trade finance and funding, we also work very closely with the Group on foreign exchange.

The Group procures raw material locally using local currencies, and because of our presence there, we are able to work with them closely on the FX part.

Koh Ai Wee:

Southland will continue to expand in Asia Pacific, and our commitment is to also reduce carbon emissions as well as to cut down on energy and wastewater management treatment. These sustainable practices have already been implemented in all our factories across the region.

Eric Lian:

I think we share the same agenda on sustainability, which is important for you as well as important for the Group. We really hope to grow our relationship even further, beyond the traditional banking facilities and really focus on sustainability, going forward.

Koh Ai Wee:

Certainly, we would like to partner with UOB in our journey for sustainable and natural rubber.