An international conference kicked off in HCMC on Wednesday for investors to look into Vietnam’s rubber-processing potential as the country until this far has shipped most of its latex and earns the least added value.
The three-day conference Future of the Natural Rubber Manufacturing Industry, which will wrap up tomorrow, provides international participants with an insight into Vietnam’s current rubber cultivation and its development prospects. Participants are also discussing rubber prices and the price trend in the coming time
Processing industry still belittled
In 2009, the country produced more than 723,000 tons of natural rubber and exported 83% of the amount, mostly to China. Exports of rubber products including tires, gloves and rubber band generated a mere US$175 million, much lower compared to natural rubber export value at US$1.2 billion last year.
The situation of natural rubber export has changed little this year, as rubber companies have continued their latex export en masse and earn hefty sums owing to the price uptrend.
Figures from the conference show Vietnam in the January-October period has exported more than 600,000 tons of rubber valued at US$1.67 billion, up nearly 100% compared to same period. China is the biggest importer of Vietnamese natural rubber.
With this conference, however, Vietnam wants to change the picture in the coming time.
Tran Ngoc Thuan, chairman of Vietnam Rubber Group, said that the conference with the participation of international experts including the International Rubber Study Group was looking at experiences and latest technologies in the sector.
“With lots of potentials in the rubber processing industry, I think Vietnam will attract more investors in order to exploit the potentials and raise the added-value rate in products,” he said.
In fact, the local rubber processing industry is poised to grow faster in the coming time, with many foreign investors coming in to set up facilities, especially tire production. Consumption of latex for local production is expected to grow substantially from next year, and thus a decline in latex export.
Rubber exports in 2011 will drop 1.3% from 780,000 tons expected this year, even though Vietnam’s output next year will rise 2.6% to 790,000 tons, the Vietnam Rubber Association’s General Secretary Tran Thi Thuy Hoa said.
Hoa told Reuters that domestic demand was forecast to rise to around 30% of output by 2020 from 16% now, adding that “Vietnamese companies have been pushing to boost rubber exports strongly, while abandoning the supply to domestic producers.”
Until now, local rubber companies are prioritizing expansion of the area under rubber cultivation rather than focusing on rubber processing.
Thuan of Vietnam Rubber Group said the country would seek to almost double the area under rubber cultivation in 2020 as well as increase the output up to 1.2 million tons.
Price uptrend
Stephen Evans, secretary general of the International Rubber Study Group, told local media prior to the conference that the rubber price was expected to continue its upward trend in the long term due to a big gap between supply and demand.
According to Evans, raw rubber prices have increased strongly in recent years, and hit the highest ever seen for years. Vietnam’s rubber export price in May this year even hit US$4,000 per ton.
Yium Tavarolit, chief secretary of International Rubber Consortium (IRCo), which groups the top three rubber exporters namely Thailand, Indonesia and Malaysia, said he expected Vietnam to become the fourth member of the group for better cooperation in regulating rubber prices.
In the past, when rubber price fell below US$500 per ton, IRCo has introduced solutions to help prevent the fall and regulate the market thanks to its controlling output on the global market, he said.
“Vietnam is among the countries that we want to establish connection with as the country has become a leader in rubber production and export,” Tavarolit said.
The International Conference and Exhibition on the Future of the Natural Rubber Manufacturing Industry, held by the Vietnam Rubber Group, is the convergence point for experts and delegates from India’s Automotive Tyre Manufacturers’ Association (ATMA), the International Rubber Study Group, Malaysian Rubber Board, and Vietnam Rubber Association among others.
The conference will work on perspectives and challenges on the global market, new technologies in rubber processing and the tire industry in particular.
(irco.biz)
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