Interhides Public Company Limited

Interhides Public Company Limited, or IHL, has signaled that its operating results in the third quarter of 2026 will recover from the previous quarter and show clear growth compared with the same period last year, after the US import tariff situation eased, prompting customers to return to normal stock replenishment orders. Wasin Damrongsakulwong, a director and general manager, disclosed that the company has received increased orders in its shoe leather business from both existing customers and new customers, including a global sports brand that has switched to IHL as a supplier. Currently, capacity utilization in the shoe leather business stands at approximately 70%, and there is still ample production capacity to accommodate many more new orders. Meanwhile, the company is in negotiations on several new production projects and expects to begin receiving a new batch of orders in November this year, with momentum accelerating clearly in the first quarter of 2027, which coincides with the Chinese New Year period. As for the collagen business, the factory construction is nearly complete and is in the final stages of negotiations to sell products to customers, with some revenue expected to begin being recognized in the fourth quarter of 2026, focusing first on the domestic market because export documentation and government agency permits are still being processed. The halal certification is also nearing completion. At the same time, the snack and pet products business has begun to see orders from foreign customers return after the US trade war and tariff situation began to ease, and the company plans to export a new lot of products within the next two weeks. Currently, IHL derives approximately 90% of its exports from Asian markets, which limits the impact of export-related issues. As for the US negotiations on a tariff ceiling for imports from Thailand at no more than 19%, further details on product categories still need to be monitored. Regarding rising energy costs and oil prices, the company continues to manage and control costs well.

IHL expects performance in the second half of the year to continue growing, while moving forward with expanding its footwear leather portfolio into entirely new product categories. The company is currently testing and producing larger-scale samples, with actual production expected to begin in the second half of this year. If well received, this will boost order volumes. The company targets revenue growth of 10 percent this year compared to last year, with footwear leather expected to contribute around 60 percent of revenue and automotive leather upholstery around 35 to 40 percent. As for attracting Chinese companies to invest in Thailand, the company has yet to see clear benefits, as manufacturers still rely mainly on imported parts. Meanwhile, exports to the United States account for a small proportion and are not expected to be directly affected by Section 301.