For decades, China has stood as the world’s dominant supplier of raw materials across industries, making it a significant player in the global supply chain. However, Gujarat-based Lead Reclaimed Rubber, an Indian MSME, has achieved a remarkable feat by exporting reclaimed rubber crumb to Chinese manufacturers. The company capitalised on India’s abundant scrap tyre supply and favourable policies, tapping into China’s massive demand for reclaimed rubber. As Lead Reclaimed Rubber continues to expand its production capacity and export markets, the company also faces challenges such as labour shortages, supply delays and regulatory concerns. Despite these obstacles, it remains optimistic about its growth prospects.

China has been the largest supplier of raw material for every industry known to man since decades. While there are many companies in different markets trying to sell back to China, an Indian MSME has unachieved the feat of selling to the ‘seller’.

Gujarat-based end-of-life tyre (ELT) recycler Lead Reclaimed Rubber has been exporting its reclaimed rubber crumb to Chinese manufactures. Commenting on how the company achieved this feat, Chief Executive Officer Jayeshh Patel told Tyre Trends in an exclusive interview, “China is the largest importer of reclaimed rubber, sourcing the material not only from India but also from countries like Vietnam and Sri Lanka. This demand is driven by a vast domestic market for tyres and inner tubes, with numerous brands operating in the aftermarket segment as well as in OEM manufacturing. As a result, the growth potential is significant.”

“While China has its own reclaim rubber plants, it faces limitations due to inadequate scrap tyre availability. In contrast, India has an abundant supply of scrap tyres supported by both domestic generation and strong import volumes. Additionally, India’s favourable government policies and the availability of skilled labour further enhance its position as a competitive and reliable supplier of reclaimed rubber to China. Hence, our company capitalised on the situation and started exporting,” he added.

Lead Reclaim Rubber was established in 2012 and is an NSE-listed company. It operates both in domestic and export markets with plans to grow its current production capacity as the reclaimed rubber market unfolds its potential.

Moreover, Patel noted that the Extended Producer Responsibility (EPR) framework by the Indian Government is playing a crucial role for the recycling industry for reaching greater heights.

EPR IMPACT

According to Patel, EPR has emerged as a transformative force in the recycling industry. Given the industry’s dynamic nature and its drive to adopt advanced technologies, EPR presents a timely and impactful mechanism to support growth particularly for micro, small and medium enterprises (MSMEs).

“While the recycling sector is evolving, recyclers often operate on thin profit margins, which limits investment in new technologies and process upgrades. EPR has helped bridge this gap. Under the scheme, we are awarded green credits for every kilogramme of end-of-life tyres we recycle. These credits are a compliance requirement for tyre manufacturers, who purchase them from registered recyclers like us. For every 100 kilogrammes of tyre recycled, we receive approximately 130 green credits, each valued at INR 2.5, resulting in a direct financial incentive. This additional income strengthens our balance sheet and can be reinvested in research and development, capacity expansion and technology upgrades. In this way, EPR indirectly fosters innovation and scaling in the recycling ecosystem,” said Patel.

To maintain accountability and transparency, the Central Pollution Control Board (CPCB) has developed a digital portal where all stakeholders must report data.

“We record our incoming feedstock (purchase data) and outgoing materials (sales invoices) on the CPCB portal. This data forms the basis for calculating green credit eligibility. Our operations are routinely audited by both government agencies and the tyre industry. These audits verify that we meet all technical and environmental standards before credits are approved. The government has also established baseline electricity usage norms for tyre recycling. We are required to submit our electricity bills to demonstrate compliance. If our energy consumption does not meet the defined threshold, we are ineligible for green credits, preventing fraudulent claims,” he Patel.

He optimistically contented that EPR is rapidly becoming the backbone of the tyre recycling industry. For over a decade, recyclers have struggled with limited access to capital. EPR is now enabling financial stability, paving the way for recyclers to professionalise operations, scale sustainably and drive forward-looking initiatives. This policy is not just a support mechanism but a growth enabler.

AN OVERVIEW

The recycling company focuses on sustainable practices and high-quality output. “Our core operation involves sourcing EOL tyres and tubes from various states across India for recycling into value-added rubber products. Our recycling process begins with a proprietary feedstock checking system to ensure quality. The tyres are then sorted, cut and processed into crumb rubber powder. Currently, we produce crumb in 30–40 mesh sizes with plans to expand into finer 80 and 120 mesh grades in the near future,” explained Patel.

For the domestic industry, crumb rubber serves a wide range of applications. Finer meshes (80 and 120) are used in various rubber and dye industries, while 30–40 mesh is commonly used in bitumen modification for road construction, in line with the Central Government’s CRMB 30 guidelines.

Furthermore, the company employs a green devulcanisation system that utilises steam, oil and pressure to break down and re-bond the rubber polymers from EOL tyres. This method is 100 percent sustainable, producing zero discharge and zero wastage. Even the steam generated during the process is condensed and reused. “We are in the process of acquiring a Z-Certificate for our zero-waste operations,” divulged Patel.

Post-devulcanisation, the rubber material becomes soft and slightly sticky due to the restructured cross-linking. It then undergoes further processing in the reclaim section, which includes refiners, mixing mills and a cleaning stage.

During cleaning, all metallic and non-rubber impurities are extracted using strainers with 60-millimetre wire mesh. The purified compound is extruded into noodle form and sent to the refiners to produce the final reclaimed rubber product, typically in seed form.

“We tailor our reclaimed rubber to meet the specific requirements of our customers including thickness, size and performance properties. Each product is made to specification. The reclaimed rubber is used across various industries including tyre and tube manufacturing, conveyor belts, packaging and other rubber-based products. As industries increasingly shift from virgin to reclaimed rubber, we position ourselves as a reliable and environmentally responsible supplier,” noted Patel.

PRODUCTION AND SUPPLY

According to Patel, virgin rubber contains about 90–100 percent RSPL, while reclaimed rubber has around 50–52 percent. It’s more affordable than virgin rubber, but the use of 100 percent reclaimed rubber in tyre manufacturing is still a distant thought.

However, it’s widely used in rubber mats. Tyre manufacturers are gradually increasing reclaimed rubber usage, encouraged by government directives to reduce dependence on natural resources and imports. Since local virgin rubber production is insufficient, it’s being imported from countries like Vietnam.

Currently, large tyre manufacturers in India use only a small percentage of reclaimed rubber, around two to three parts per hundred

rubber (PHR). For cycle and three-wheeler tyres, it goes up to 20 PHR. Conveyor belts use up to 30 percent, and in non-critical applications with almost no performance impact, reclaimed rubber can be used up to 95 percent.

The company’s plant is located in Katlal, Kheda, near Ahmedabad, and it uses Indian machinery sourced from Punjab. “We started production at 250 metric tonnes per month. After Covid, we scaled up to 490 metric tonnes and recently reached 960 metric tonnes per month. Within the next year, we plan to expand further to 2,000 metric tonnes per month,” said Patel.

He added, “We run our plant with TBR tyres both nylon and radial. We’re centrally located in Ahmedabad and as Gujarat shares borders with Rajasthan, Madhya Pradesh, Maharashtra, and the southern states, it helps us with tyre sourcing. We collect tyres through a three-layer supply chain consisting puncture shops, rag pickers and aggregators. The aggregators sort the tyres as per our requirements.”

For nylon tyres, the company only uses the centre portion, specifically from 1020 tyres and discards the sidewalls. For radial tyres, it recycles the entire tyre. The recycling technology is the same for both, but the processing recipe differs. Radial tyres have cords in the centre, so the devulcanisation process is slightly modified to handle the added strength. Its research and development facility are located inside the plant.

Commenting on what sets the company apart from competitors, Patel explained, “Our focus on consistency and timely delivery sets us apart from competitors. We maintain a 95 percent consistency ratio. From raw material to the final product, everything is monitored and controlled by our control plant, which is also a key differentiator. We also have an in-house development department that not only ensures quality consistency but also works on improving the benefits for our customers. On top of that, we conduct awareness programmes to educate our customers on which materials are best suited for different use cases. That’s something others in the industry usually don’t do.”

MARKET SPREAD

Lead Reclaim Rubber serves both domestic and international markets. Among the industries it caters to, conveyor belts account for 30 percent of its business, tyres for 20 percent and the remainder comes from rubber products and packaging. Although the tyre and tube segments currently represent a smaller share of revenue, Patel anticipates significant growth in these areas. Over the next five years, it expects tyres and tubes to become its largest consumer segment followed by conveyor belts.

The company attributes this projected growth to the government’s strong emphasis on the circular economy and the rapid expansion of the automobile industry, both of which are likely to increase demand for reclaimed rubber.

The company exports to several countries including Sri Lanka, China, Bangladesh, Turkey and Philippines. China is currently the largest consumer in its export portfolio, followed by Sri Lanka. According to the Patel, export markets generally use more reclaimed rubber due to their larger production capacities.

The export market continues to show strong demand and the company currently has pending orders from China.

However, as European nations vie for restricted EOL tyre exports to India, the scenario for indigenous recyclers can be precarious. Commenting on the potential impact of such restriction, Patel highlighted, “India recycles a significant portion of the scrap tyres it generates. However, unregulated and illegal pyrolysis operations remain a critical concern. These units often operate without environmental compliance, posing risks to public health and the environment. Stronger government intervention and regulatory enforcement are urgently needed to eliminate such practices and ensure sustainable recycling.”

“India’s tyre recycling ecosystem is diverse and imbalanced. While there are numerous recyclers, the segment is dominated by pyrolysis players (approximately 70 percent), with reclaim rubber manufacturers constituting only around 30 percent. This heavy skew towards pyrolysis is problematic, especially since many of these players depend on imported scrap tyres for feedstock. If the import of scrap tyres into India is disrupted, it will create a significant supply shortage, driving up the price of ELTs. Currently, the price of scrap tyres ranges between INR 18–21 per kilogramme, but a halt in imports could potentially increase this to INR 40 per kilogramme, a nearly 50 percent spike, which would severely impact the entire recycling value chain,” cautioned Patel.

Besides this looming issue, Patel highlighted several pending challenges for the industry. One of the primary issues is a shortage of skilled labour. Interestingly, even as the industry moves towards greater automation, the demand for labour continues to rise.

Another challenge is supply delays caused by aggregators, who often fall behind on delivery timelines due to their own labour shortages. Additionally, maintaining quality consistency is difficult as scrap tyres vary in composition from batch to batch. As a result, the company must closely monitor and control its processes.

A significant concern affecting future growth is the regulatory environment. The company remains cautious about expanding production because of the current ban on scrap tyres.

Although the business is regulated, there’s an underlying fear that stricter government action could further limit the supply of scrap tyres. Such restrictions could leave newly built expansion units underutilised.

Patel believes that unless government policies become more supportive, major investments and expansions will remain risky.

Looking ahead, Lead Reclaim Rubber is planning both forward and backward integration. On the forward side, the company aims to start manufacturing rubber tiles made entirely from rubber granules, a by-product of its current process. It also plans to enter the cycle tyre industry.

As part of its backward integration strategy, the company intends to set up more tyre collection centres both internationally and within various Indian states to secure a more consistent supply chain.

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HS HYOSUNG ADVANCED MATERIALS has completed and commenced operation of a 17.5-MWp rooftop solar power installation at its facility in Vietnam’s Nhon Trach Industrial Park, located within Dong Nai Province. This marks a significant step in the company’s broader effort to reshape its Vietnam operations – its largest global manufacturing base for tyre cords and technical yarns – into what it terms a ‘Smart Green Factory’. By merging renewable energy infrastructure with digital energy management systems, developed in partnership with the energy IT specialist Nuriflex, the firm is positioning this site at the forefront of its transition towards becoming a global eco-friendly manufacturing hub.

A key element of this transformation is the deployment of an Internet of Things based energy management system, which allows for real-time oversight of electricity generation and equipment performance. This digital layer not only streamlines operational efficiency but also contributes to greater equipment reliability and overall productivity gains, ensuring that the integration of renewable energy delivers tangible improvements beyond simple power generation.

With further solar installations set to be completed by August, total rooftop capacity at the Nhon Trach site will reach 37.5 MWp. Once fully operational in the latter half of the year, HS HYOSUNG ADVANCED MATERIALS anticipates annual electricity cost savings exceeding KRW 6 billion (approximately USD 3.94 million), bolstering its cost competitiveness. The expansion is also expected to deliver meaningful reductions in greenhouse gas emissions, reinforcing the company’s long-term commitment to sustainable management practices.

Through advanced energy IoT solutions, the Vietnam subsidiary now systematically manages carbon reduction data generated from its solar power operations. This capability enables a more structured response to rising demands from major global customers – including Michelin, Bridgestone, Goodyear, Continental and Pirelli – for verified renewable energy usage and carbon emissions information. By strengthening its ESG performance across the supply chain, the company is leveraging its solar infrastructure and smart energy management not merely as facility investments but as strategic tools to enhance environmental responsibility and competitiveness in a market where sustainable value chains are increasingly essential.

“Starting with our Vietnam production base, we are simultaneously promoting renewable energy transition and energy efficiency improvements across our operations. By expanding solar power facilities, we will strengthen both cost competitiveness and ESG capabilities while proactively responding to the evolving requirements of our global customers,” said an official from HS HYOSUNG ADVANCED MATERIALS.

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The Association of Natural Rubber Producing Countries (ANRPC) has released its Monthly NR Statistical Report for February 2026, detailing a period of significant market activity influenced by geopolitical tensions, macroeconomic changes and shifting supply-demand dynamics within the global natural rubber sector.

As per the report, global natural rubber production for 2026 is forecast to reach 15.324 million tonnes, a 2.2 percent increase from the 14.996 million tonnes recorded in 2025. February output alone is projected at 994,000 tonnes, marking a 3.4 percent year-on-year rise due to favourable weather and higher rubber prices. Despite this overall growth, production trends vary among member nations. While Thailand is expected to remain the top producer, Indonesia and Vietnam face short-term constraints from structural and agronomic issues. Meanwhile, Malaysia is advancing efforts to restore abandoned plantations, with the Rubber Production Incentive activated in Sarawak and Sabah and the Malaysian Rubber Board targeting the rehabilitation of 4,137 hectares of idle land in 2026.

Physical and futures markets saw notable price increases across major grades in February. In Kuala Lumpur, SMR-20 averaged USD 2.01 per kilogramme, a 5.13 percent monthly gain, while STR-20 in Bangkok rose 5.12 percent to USD 2.11 per kilogramme. Sheet rubber grades also strengthened, with RSS-3 increasing 7.84 percent to USD 2.35 per kilogramme and RSS-4 in Kottayam surging 10.38 percent to USD 2.34 per kilogramme. Centrifuged latex in Kuala Lumpur closed the month at USD 1.61 per kilogramme. Futures mirrored this firming trend, as the Shanghai Futures Exchange May 2026 contract averaged roughly 16,508 CNY (approximately USD 2,388) per tonne and the SGX contract averaged USD 1.92 per kilogramme, supported by strong demand and tightening supply expectations ahead of the seasonal low-yield period from February to May.

Crude oil volatility added further complexity, with Brent averaging USD 70.89 per barrel in February – up 6.43 percent from January – before spiking to approximately USD 104 per barrel in early March following military actions in the Middle East and the closure of the Strait of Hormuz, a conduit for nearly 20 percent of global oil supply. This has introduced a risk premium with implications for synthetic rubber competitiveness and natural rubber demand. Currency shifts also play a role, as the Malaysian Ringgit appreciated modestly to 3.89 MYR per USD and the Thai Baht strengthened to around 31.08 THB per USD by late February, affecting trade competitiveness. Looking ahead, rising automotive production, especially of new energy vehicles in China, India and Southeast Asia, is expected to sustain demand and support prices. However, risks persist from US-China trade tensions, Middle East geopolitical instability, weather uncertainties during the low-yield season and currency fluctuations tied to US monetary policy, all of which could disrupt supply chains and export revenues.

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Tokyo Zairyo Co., Ltd., a wholly owned subsidiary of Zeon Corporation, marked a significant milestone in November 2025 by establishing a new branch office in Chennai, Tamil Nadu, India. Following the completion of all necessary preparations, this location has now commenced full-scale operations. The move represents a deliberate effort to broaden the company’s commercial reach across the Indian market while simultaneously constructing an organizational structure capable of responding with greater agility to the evolving and increasingly diverse requirements of its customers.

This southern expansion comes approximately 15 years after the company first established its Indian subsidiary, Tokyo Zairyo (India) Pvt. Ltd., with an office in Gurugram, Haryana, in 2011. By positioning a second office in Chennai, the firm now operates a coordinated network spanning the northern and southern regions of the country. Close collaboration between the two locations is intended to strengthen information services and enhance user support, leveraging both internal capabilities and external partnerships to better serve Japanese automotive parts manufacturers and processors operating throughout India.

Through this dual-office structure, Tokyo Zairyo is poised to advance its core business of purchasing and selling a broad spectrum of materials, including rubber, resins and elastomers. The synchronised operations in Gurugram and Chennai enable the company to deliver more responsive support, ensuring that clients across the Indian automotive supply chain benefit from efficient service and a reliable supply of essential materials.

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Kuraray Co., Ltd. has announced a comprehensive global price adjustment for its portfolio of Liquid Rubber products and ISOBAM alkaline water-soluble polymer. These changes, which are set to take effect on 16 April 2026, will see prices rise by at least USD 2 per kg.

The driving forces behind these significant pricing actions are multifaceted, rooted in substantial disruptions to global supply chains. These disruptions are largely attributed to the ongoing conflict in the Middle East, which has had a cascading effect on logistics. Compounding this issue are the sharply rising costs associated with transportation and essential raw materials.

This strategic move is essential for the company to maintain operational stability and continue the supply of Liquid Rubber and ISOBAM amidst the volatile market conditions.

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