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| Sunday, 20 June 2004 |
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| News Business Features Editorial
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Overview of the rubber industry in Sri Lanka by Ms. Siromi Fernando-Deputy Director-Sri Lanka Export Development Board. Sri Lanka pioneered the Asian rubber industry in 1876 with the planting of rubber trees in Henarathgoda. While the latex retrieved from the rubber tree, after processing, is used in the manufacture of various rubber products, even the timber is used, in treated form, for producing valuable furniture and other timber-based products. The rubber industry provides employment to a vast number of people mainly from rural areas, where the plantations and smallholdings are located. Starting from planting rubber trees, tapping of latex to the manufacture of semi finished or semi processed rubber and products (primary products) and moving forward to the manufacturing of value added products combined with those involved in trading the rubber industry provides employment to more than 200,000 people. Sri Lanka produces around 92,000 metric tons of raw rubber per year, which is only 1.2% of the world production. The average annual yield of around 750 kilos per hectare is not all that satisfactory as some other rubber producing countries produce around 1800 kilos per hectare per year. However, Sri Lanka ranks eight as a supplier of rubber to the world. In the year 2002 approximately 91,000 metric tons of rubber was produced in Sri Lanka, out of which 55,000 was consumed within the country. Accordingly, about 60% of the total production is used by the local industry for manufacture of products, both for local consumption as well as for export markets. Value of Sri Lanka's rubber industry exports has been growing steadily from approximately US$ 135 million in 1995 to more than US$ 200 million in 2000. Out of this value, rubber products export values consists of around 87%. Natural rubber had been fetching a low price in the international market since the 1997 Asian financial crisis. The low prices in the world market combined with low yields had discouraged investment in the plantation area. Some of the rubber plantations even started uprooting the rubber trees substituting these with other types of cultivations. Since 2003, however, the international rubber prices had started picking up, among other reasons due to cartel type arrangements among three major producers, Thailand, Indonesia and Malaysia. Increased consumption in China and the inadequate supply of rubber, as during the low prices no investment was made, has also shot up the prices of rubber in the international market. Sri Lanka also needs to address the issue of not having firm policies in stability, inadequate credit facilities and also change the present attitude of the labour force in respect of rubber tapping. Sri Lanka produces tyres, tubes, carpets, hot water bottles, auto parts, rubber bands, industrial components, surgical and household gloves and condoms, balloons, boots and shoes with components out of rubber. The country now has a premium quality natural rubber type known as Lankaprene, which is an odour free (more or less) light coloured, clean, rubber which is ideally suited for medical equipment and up market, value-added products. Sri Lanka also supplies ribbed smoked sheets (RSS) pale crepe, sole crepe, brown crepe technically specified rubber (TSR) centrifuged latex and speciality rubbers and Sri Lanka is the major world supplier of crepe rubber. Sri Lanka rubber makes it is way to sophisticated markets such as Europe and America. Having Asia's oldest research institute, the Rubber Research Institute (RRI) of Sri Lanka carries out research activities, provides plants from it is nurseries for replanting and also introduces new, improved clones to the industry. Testing of the rubber and products is carried out by the RRI as well as the Industrial Technology Institute (ITI) and, combined with highly trained chemists, technologies, engineers and technicians Sri Lanka's exports markets include USA, Germany, France, Italy, Belgium, Switzerland, Japan, Netherlands, etc. Sri Lanka can boast of internationally accepted products such as "Solideal" branded industrial tires manufactured by Loadstar Ltd. Dipped Products Limited exports their products all over the world, their household and industrial gloves being marketed under many brand names. Loadstar enjoys more than 23% of the international market and Dipped Products Ltd. is ranked fourth in the world market. There are multinational companies too in operation in Sri Lanka, namely Ansell Lanka Limited, which manufacturers latex based products and Trelleborg Lanka Ltd., which produces solid tyres to the global market. As a local resource based industry, the rubber sector has a very promising future and the government has recognised the strategic significance of the rubber industry and provide support to the Sri Lanka Rubber Cluster to develop and implement competitive strategies. As one of the key strategies, Sri Lanka's private sector and the government has already ventured out to grow rubber jointly in Monaragala which is a non-traditional area ideally suited for planting rubber. If the remaining few constraints can be addressed properly the rubber industry in Sri Lanka could emerge as a high export earner, which provides high quality employment to a vast number of people in the country. Added attraction of the rubber industry is its high degree of environmentally friendliness compared with all other industries. Rubber plantations add to forest cover and sequester carbon in great volumes and therefore qualify for carbon trading benefits. Source: Sri Lanka Exporter magazine |
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