Is Natural Rubber under mortal threat? Is there a possibility that factors like climate change, diseases etc. will bring the plantation industry to its knees?

It is a fact that the traditional rubber growing regions in almost all rubber producing countries in Asia are increasingly constrained by adverse effects of Climate Change. The yield from Hevea in traditional regions is impacted by extreme weather, recurrent cyclones, depression rains and flash floods. The last couple of years have seen interruption to tapping due to unforeseen rains and floods. Another major constraining factor is the recurrent outbreak of new diseases. For example, the outbreak of a new fungal leaf disease (Pestalotiopsis leaf fall disease) reported in Indonesia in 2018 has now spread into around 387,000 ha of mature rubber trees in the country. An estimated 141,000 ha in Thailand, 16,000 ha in Malaysia and 4,000 ha in Sri Lanka are reportedly affected by new fungal leaf diseases.

The low rubber prices that continued over several years resulted in poor maintenance of rubber holdings in almost all producing countries. As resource-starved farmers could not apply fertilizers or adopt proper crop protection measures over several years, rubber trees became weak and lost their resistance to diseases and extreme weather. It is striking to note that the root cause of the decline in yield is the unattractive prices and the resultant poor maintenance of holdings. A major trend reversal of prices can bring glaring positive changes in the natural rubber production sector. The potential national average yield (i.e., the annual production from a unit hectare of tapped trees) is 20 to 30% higher than what is realized now. For example, the average yield in India is currently 1,400 kg per hectare.  But a favorable price can increase the average yield to the range of 1,750-1,800 kg. The country had realized the average yield of 1,823 kg in 2012 when the prices ruled high.  Moreover, a large extent of mature trees which are currently left untapped in the country will come back to production once farmers find the prices attractive.  The country has around 200,000 hectares of mature trees which are left untapped.

More specifically, it is the uneconomic return from the venture that hinders the natural rubber production sector. There is no mortal threat to the supply base as far as prices stay remunerative and the net profit from the venture is attractive. No industry can sustain for a long if it is economically unviable and natural rubber is no exception.

 

Can a COVID19 like pandemic impact NR industry long term? Do plantations have an effective healthcare plan to ensure labourers’ health and safety?

NR sector globally has almost fully recovered from the impact of the Covide-19. This is particularly true with reference to the global production, consumption, trade, and prices of natural rubber. The prices in key physical markets had crossed over the pre-covid level even by October 2020 and firmed up further since February 2021. 

It is true that the production and processing sectors in Thailand and Malaysia are partly hindered as cross-border travel restrictions prevent migrant workers from neighboring countries to return to works. This issue, to a large extent, is resolved by making use of local workers by providing them necessary skills training. Coming to the downstream manufacturing sector, large number of debt-burden units in the MSME sector are reportedly struggling hard to bring their businesses back to normal.  On the other side, large-scale manufacturing units, particularly those in auto-tyre manufacturing, have made V-shaped recovery driven by the pent-up momentum generated on lifting of the lockdowns. For healthcare rubber products such as rubber gloves, the epidemic has been a major boon. Taking the global rubber industry as a whole, the industry has already come out from the impact of the pandemic.

Workers engaged in large plantations are provided with social security and healthcare facilities as per the regulatory provisions being followed by the governments in the respective countries.

What are the chances of NR getting totally replaced by alternative rubbers? Will this happen? If so, how soon?

NR getting totally replaced by any alternative material is an impossible event in any case. The relative share of NR in the total quantity of new rubber (i.e., natural rubber and synthetic rubber) globally consumed was less than 30% during early 1970s. From that low level, the relative share of NR has gone up to nearly 50% as of now (47.2% in 2020). Synthetic rubber and natural rubber are not competing each other because technical considerations limit the scope of substitution between the two.

Lack of sufficient economic benefits is considered to be a reason for planters looking for alternate crops that can bring faster financial returns. How real is this? How much of rubber plantations have been replaced by other crops?

A total extent of nearly 0.6 million hectares of rubber trees was estimated to have cut down during 2015-2020 period in Thailand, Viet Nam, China, Malaysia, and India for cultivation of other crops or for conversion of land for non-farm uses. The details are given below:

 

 

In the case of Thailand, farmers are offered attractive cash incentive (More than US$3500 per hectare) by the government for removing aged rubber trees and planting other crops. It means, the shift from rubber in Thailand is largely policy driven. The case of Thailand is an exception. Generally speaking, the crop shift from rubber over the past few years is caused by the unattractive net profit from the venture.

 

Is plantation industry too slow to modernise itself, technologically as well as in terms of attracting skilled labor?

It is a fact that technological progress is severely constrained in the smallholder-dominated rubber production sector. The unattractive prices that prevailed over the period since 2015 made the farmers deprived of resources. Although high-yielding clones are available, farmers are generally postponing the replating of aged low-yielding trees due to their inability to meet the huge replanting cost. Another factor that prevents smallholders from replanting is the uncertainty of the farmers over the long-term prospects of rubber cultivation. Unattractive prices have also discouraged farmers from adopting good agricultural practices. Poor return from the venture has compelled farmers to discontinue the application of fertilizers, pest and disease management measures, and proper maintenance of holdings. Larger section of farmers has discontinued the use of stimulants and rain-guarded tapping. However, technological progress continued in large plantations owned by corporates, enterprises, and the public sector.

 

NR supply has always been unstable due to various reasons. Is this prompting manufacturers to look for other options?

There is no serios supply constraint or supply uncertainty as of now except the seasonal shortage.  Moreover, all the producing countries have huge potential to increase their supply if the prices become attractive.  This point was elaborated earlier.

 

Is there a campaign being run by alternative rubber sector to put pressure on NR industry?

As stated earlier, NR does not face any threat from alternatives basically due to the reason that the only substitute for natural rubber is natural rubber. In the total global consumption of new rubber (i.e., natural rubber plus synthetic rubber), the relative share of NR is currently around 50% (47.2% in 2020) as against less than 30% in early 1970s. There is no reason to anticipate a fall in the relative share of NR in the next three decades at least.

Are environmental sustainability factors detrimental to NR cultivation?

Environmental considerations can only help NR to gain preference over synthetic rubber, polyurethane, and other materials in various applications because natural rubber is recognised as “an environment-friendly industrial raw material and renewable resource”. The following points establish such a view:

1. Rubber plantations purify atmosphere by absorbing CO₂ and releasing O₂. Based on scientific research undertaken by rubber research institutes in five countries, it is empirically proven that a hectare of rubber plantation annually sequesters as much as 30 tonnes of CO₂ from atmosphere which is near to that of the Amazonian base.
2. Rubber plantations are a good source of timber and bulk of this goes into furniture industry thereby protecting large extent of forests from being logged every year. Secondary branches of the rubber trees go into the fiber board industry and small twigs are used by the rural people as a source of firewood, both indirectly saving forests.
3. Rubber plantations contribute to sustainable soil productivity. Soil productivity has not deteriorated in any of the traditional rubber growing countries which have the history of growing rubber for more than 100 years and already completed 3-4 rubber plantation cycles. 
4. One of the key factors which had adversely affected food crops production in the last couple of years was climate change.  Rubber plantations offer solution to this as it helps balancing carbon level in atmosphere.  Rubber is no longer a mono crop.  Several food crops are grown along with rubber plants in all NR producing countries. The concept of raising rubber plantations as agro-forestry is being increasingly promoted across countries.  It is common among rubber farmers to maintain a portion of their land for other crops.  Moreover, rubber holdings provide sources of ancillary income through activities such as horticulture, fishery, honeybee, goat farming, etc. 
5. In all major natural rubber growing countries, rubber has been identified as a major tool of poverty alleviation and thus helping to achieve the Millennium Development Goals (MDGs).

 

Are there any concerted efforts being taken up by organisations like ANRPC, IRSG or governments that subsidise NR cultivation?

Developmental activities such as promotion of new-planting and replanting in each country are undertaken by the respective governments only. Among the member governments of ANRPC, Thailand, Malaysia, India, and Sri Lanka provide financial incentives to farmers to promote the cultivation of rubber. The governments usually mobilize the funds needed for the purpose from the same sector by levying a cess on the quantity of NR exported from the country or consumed within the country. The financial assistance cannot be termed as a ‘subsidy’ because the funds needed for the purposes are mobilized from the same sector.

 

Is it possible to have a globally uniform price structure for NR that can ensure interrupted supply?

In a market driven global economy, commodity prices are largely determined by the forces of supply and demand. This is particularly true in the case of NR which is a strategic industrial raw material coming from more than 10 million smallholder farmers world over. It is not practical to regulate NR prices globally as it is a real challenge to bring together all major producing countries and consuming countries for such a common agenda on terms acceptable to all. (TT)

Japanese chemical manufacturer Tosoh Corporation announced plans on Wednesday to construct a second chloroprene rubber production facility at its Nanyo Complex, representing an investment of approximately ¥75 billion (£460 million) to meet rising global demand for the speciality polymer.

The new facility, scheduled to begin construction in spring 2027, will add 22,000 metric tonnes of annual production capacity for Tosoh’s SKYPRENE chloroprene rubber brand. Commercial operations are expected to commence in spring 2030 at the Shunan City site in Yamaguchi Prefecture.

Chloroprene rubber serves as a critical component across multiple industries, from automotive manufacturing to medical applications. The synthetic rubber’s popularity stems from its exceptional resistance to oil, weather conditions, and flame exposure, making it suitable for demanding applications, including automotive hoses, industrial belts, adhesives, and medical gloves.

The expansion comes as global demand for high-performance polymers continues to grow, driven by increasing automotive production and stricter safety requirements across industrial sectors. Medical applications have also seen increased demand following heightened awareness of the requirements for protective equipment.

Tosoh’s decision to double down on chloroprene rubber production reflects the material’s position within what the company terms its “Chemical Chain Business” - a strategy focused on value-added speciality chemicals rather than commodity products.

The investment represents one of the larger capacity expansion projects announced by Japanese chemical companies this year, signalling confidence in long-term demand fundamentals despite current global economic uncertainties.

The Nanyo Complex already houses Tosoh’s existing chloroprene rubber operations alongside other chemical production facilities. The site’s established infrastructure and logistics capabilities influenced the decision to expand at the existing location rather than develop a greenfield facility.

Industry analysts note that the three-year construction timeline reflects the technical complexity of chloroprene rubber production, which requires specialised equipment and stringent safety protocols due to the chemical processes involved.

The expansion aligns with broader trends in the Japanese chemical industry, where companies are increasingly focusing on high-margin speciality products to offset competitive pressures in traditional commodity chemicals from lower-cost Asian producers.

Epsilon Carbon, a leading global manufacturer of carbon black, has launched N134, which it claims is a specialised ‘Hard Grade’ carbon black known for its superior abrasion resistance and durability.

At present, the high-quality N134 grade is being imported due to the lack of consistent quality and supply chain issues in the Indian market. As a result, the tyre makers have to modify their formulations using other grades of carbon black, which it shared often leads to reduced performance.

But now, Epsilon Carbon has become the first company in India to install a dedicated manufacturing unit designed for N134 grade hard carbon. The company is expanding its existing Vijayanagar Carbon complex facility to produce 215,000 tonnes of carbon black.

This will not only ensure consistent supply of N134 carbon black for tyre makers in the country, reduce import dependency, but also open up export potential to markets such as Europe and USA. Epsilon Carbon will also focus on integrate advanced processing techniques to ensure batch consistency for durability and performance.

Vikram Handa, Managing Director, Epsilon Carbon, said, “This is a proud moment for us and for India’s carbon black manufacturing sector as the high quality N134 black will significantly reduce import dependency and provide tire manufacturers in India and abroad with a reliable, high-quality product. Our goal is to match global standards while building India’s capability to serve premium markets.”

Lummus Technology, a leading provider of process technologies and energy solutions, has signed a memorandum of understanding (MoU) with InnoVent Renewables to collaborate on the global licensing and deployment of InnoVent’s continuous tyre pyrolysis technology.

Under the proposed agreement, Lummus will become the exclusive licensor for InnoVent’s proprietary pyrolysis process, which transforms end-of-life tyres into valuable outputs, including pyrolysis oil, gas, recycled carbon black and steel. Additionally, Lummus will offer integrated technology packages that combine InnoVent’s pyrolysis system with its own downstream processing solutions, enhancing the value of fuel and chemical products derived from waste tyres.

InnoVent’s technology provides a fully scalable, end-to-end solution for converting discarded tyres into renewable fuels and high-value petrochemicals, covering everything from pre-processing to purification. The company currently operates a commercial-scale facility in Monterrey, Mexico, with an annual processing capacity of up to one million passenger tyres, and has the capability to expand further.

Leon de Bruyn, President and Chief Executive Officer, Lummus Technology, said, “This is another significant step in expanding and strengthening our portfolio for the circular economy. By combining InnoVent’s tyre recycling technology with Lummus’ global licensing and engineering expertise, we will be addressing the global challenge of waste tyres and creating new pathways for sustainable product development.”

Vibhu Sharma, Chief Executive Officer, InnoVent Renewables, said, “Partnering with Lummus has the potential to accelerate the global deployment of our technology and help us address the environmental and public health challenges of one billion end-of-life tyres that are disposed of annually. Together, we can transform waste into valuable resources, reduce carbon emissions and support the transition to a more sustainable future.”

Continental is accelerating its efforts to make tyre production more sustainable, with the German tyre manufacturer expecting the share of renewable and recycled materials in its tyres to rise by up to three percentage points in 2025.

The average share stood at 26 percent in 2024, and Continental said it anticipates a further increase this year due to the expanded use of materials such as synthetic rubber derived from renewable sources, recycled PET polyester, recycled steel, and silica made from rice husk ash — a by-product of rice production.

“We are systematically increasing the share of renewable and recycled materials in our raw material portfolio. In five years, we aim to surpass the 40 percent mark,” said Jorge Almeida, Head of Sustainability at Continental Tires. “To achieve sustainable mobility, we are constantly searching for even more environmentally friendly materials. After extensive testing, we integrate them into production as quickly as possible.”

The company has set a goal of using over 40 percent renewable or recycled materials in its tyres by 2030, without compromising on performance or safety.

A key pillar of this transformation is the adoption of mass balance-certified materials. This approach, certified under ISCC Plus, enables Continental to mix certified and non-certified materials during production while maintaining strict accounting procedures to ensure traceability.

The company has already secured ISCC sustainability certification for its tyre plants in Lousado (Portugal), Hefei (China), Púchov (Slovakia) and Korbach (Germany). Continental is also scaling up its use of recycled steel, silica from rice husk ash, and PET yarns made from recycled plastic bottles via its proprietary ContiRe.Tex process.

Other sustainable innovations include COKOON, an adhesive coating system co-developed with Kordsa that replaces formaldehyde and resorcinol in bonding textile components with rubber. Continental also continues to explore alternative additives derived from renewable sources to improve the tyre vulcanisation process.

“We have developed a comprehensive portfolio of diverse, more sustainable materials and are continuously integrating them into all our products after extensive testing,” Almeida said. “In doing so, we ensure that there is no compromise in safety or performance. With this portfolio, we are getting closer and closer to our ambitious, long-term sustainability goals.”