SIPH Says Rubber Demand To Stay Strong

French-listed natural rubber group SIPH expects rubber demand to remain strong in 2011 thanks partly to healthy appetite in emerging countries such as China and India, its deputy chief executive told Reuters.
SIPH, in which tyre giant Michelin holds a 20 percent stake, should see rubber production increase gradually from 2013, Olivier de Saint-Seine said in an interview on Monday (January 17).
With crude oil prices heading towards $100 a barrel and other raw materials prices surging to record highs, key Tokyo rubber futures hit a new peak on Monday (January 17). Traders expect further gains on mounting concerns over supply tightness.
"We are not expecting world production to rise very sharply. Demand is strong globally, essentially in emerging countries like China or India but also in Europe and in the U.S.", Saint-Seine said.
The group supplies clients including Japan's Bridgestone and Germany's Continental and has plantations and industrial sites in Nigeria, Ghana, Liberia and Ivory Coast.
SIPH's Ivory Coast business was operating as usual despite a post-election leadership crisis that has claimed the lives of almost 250 people according to the United Nations. "We are very vigilant and we know how to adapt," Saint-Seine said. "As of now, operations in this country are running normally."
SIPH, which stands for Societe Internationale de Plantations d'Heveas, produces and distributes natural rubber obtained from the latex of Hevea trees.
Shares of SIPH rose nearly 81 percent in 2010 on the back of a sharp rise in rubber prices and are up almost 31 percent since Jan. 1, giving it a market value of around 550 million euros ($732 million).
SIPH production amounted to around 130,000 tonnes in 2010 -- compared with the estimated 10 million tonnes produced in the world annually -- and should be stable this year before increasing gradually from 2013 as the group hopes fresh plantations will start producing latex, Saint-Seine said.
The executive said SIPH would reinforce its presence in west Africa but that it would study potential acquisitions anywhere if opportunities arose.
"We do not rule out looking in the direction of Asia," Saint-Seine said.
Thailand and Indonesia are the two main producers of natural rubber.
(Reuters, January 17, 2011)