THAILAND: Rubber industry looks abroad

Thailand is the world's leading exporter of rubber and has been looking at ways to add value to the commodity, which would also help improve the livelihood of farmers, especially in the restive South of the country.

"At present, almost all natural rubber is exported and a lot is imported back after being turned into processed products that are of higher value than raw rubber," said Tawee Kaewmanee, director of Industrial Promotion Center 11 of the Board of Investment (BoI).

"For this reason, we hope to increase the export value from processed rubber products by joining with the world's biggest rubber importer to help improve our industry."

Thailand's output of natural rubber last year of 3.25 million tonnes accounted for one third of the global total. China is the largest consumer of rubber in the world, with annual import volume of 1.7 million tonnes. Up to 50% of total consumption in China is imported from Thailand, with a total value of US$1.5 billion.

"We hope to see more Chinese investors come to Thailand and share rubber processing technology with us, which will help to add value to our rubber product exports," said Mr Tawee.

"At the same time, the rubber industry of China is hoping to maintain steady market growth. This cooperation will help ensure steady supply of raw materials which is the long term task of China's rubber industry, and also help Thailand to develop domestic rubber technology."

According to Commerce Ministry statistics, Thai rubber exports were worth $6.4 billion last year, 43.4% higher than in 2009. In the first eight months of this year the value was $5.5 billion, up 34.2% year-on-year. The major markets are China, the US, Japan, Malaysia and Vietnam respectively.

Recently, the UN Industrial Development Organization (Unido) and the government of Nanning in China agreed to invest $500 million to build the Nanning International Rubber Exchange Market at the China-Asean Logistics Base in Nanning.

"This project will help provide more opportunity for Thai rubber entrepreneurs to improve their business and also support the trading of rubber directly to China on a government-to-government basis. As a result, our rubber exports should definitely see high growth," said Mr tawee.

Edward Smith, the head of the Unido regional office in China, said building a platform to develop global rubber technology was a significant step.

The Chinese East Gate logistics base and the Nanning International Rubber Exchange Market are intended to play a more important role in the development of the rubber industries of both China and Asean, said Yao Hongshen, director of the China International Center for Economic and Technical Exchanges.

He said the new rubber exchange would take full advantage of Guangxi, which is geographically close to rubber producers in Asean and the consumer market of China, to integrate the trade between China and Asean. As a result, he said, it would put an end to the small, loose, random distribution of the domestic rubber industry in China.

"Guangxi is located at the juncture of South China, Southwest China and Asean economic circles. It is a convenient passage to link the domestic consumer market to major rubber producers," he said.

In the longer term, he said, the Nanning market would play a more important role in multilateral industrial cooperation.

Both China and Thailand should jointly promote the sustainable development of their rubber industries based on the advantages each has, he added.

Source: Daily "Bangkok Post", Bangkok; 28 Nov 2011

(Syed Rashid Ali, Karachi, Pakistan)