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Wednesday, 29 October 2014 00:25 - - {{hitsCtrl.values.hits}}
The Global Rubber Conference 2014 declared officially open with top officials cutting the ribbon. From left: Confexhub Chairman Dr. Abdul Aziz, EDB Chairman and Chief Executive Bandula Egodage, Minister of Economic Development Basil Rajapaksa, Minister of Industry and Commerce Rishad Bathiudeen and Ministry of Industry and Commerce Secretary Anura Siriwardena – Pic by Upul Abayasekara
By Shabiya Ali Ahlam
The Government yesterday expressed confidence in the country becoming a natural polymer hub for the region but emphasised the need for a new round of promotion and global attention to take the sector forward.
Capitalising on the opportunity and platform presented by the Global Rubber Conference 2014 that kicked off yesterday in Colombo, Minister of Industry and Commerce Rishad Bathiudeen pointed out that by supplying ‘green’ and ‘synthetic’ rubber, Sri Lanka aiming to become a natural polymer hub is a viable option which can be explored and implemented.
“With little amounts of additional investments and small extra resources commitments a polymer hub could be achieved since we already have the industry base and the know-how,” he expressed confidently at the conference for which Minister of Economic Development Basil Rajapaksa was Chief Guest.
Noting that Sri Lanka also in a position to expand rubber industry base aspects, including enhanced production of synthetic rubber product of stabilisers, consumables and recycling, Bathiudeen called the global rubber industry players to leverage on the nation’s strategic Asian hub positioning and investment incentives to partner with the local polymer sector for win-win outcomes.
“Our historic Free Trade Agreement with India and Pakistan offers more than 8,000 product lines for you to use Sri Lanka for manufacturing and export to these huge markets totally duty free. Sri Lanka has high growth potential in this area. We have a realistic aim of achieving $ 3 billion turnover by 2020. All the economic indicators are positive so the platform is given. We are confident that with all the stakeholders we can achieve that target together,” he told the fully packed audience that consisted of about 250 delegates from over 25 countries.
Providing a snapshot on the local rubber industry the minister highlighted that despite the challenging global market conditions and energy cost pressures, the sector has been resilient and shows signs of expansion.
While the cost of production per kilogram of rubber increased slightly in 2013 to $ 1.15 from $ 1 in 2012, the average yield per hectare was 1.245 kilos in 2013, placing Sri Lanka above a number of other producers in the region.
With regard to expansion in the last five years the number of registered private companies operating in the local rubber sector increased by 48% to 251 from 169 registered firms in 2009 and the local rubber cultivation extent also increased by 9.4% since 2009 to 133,600 hectares in 2013.
Furthermore, seven rubber nurseries in the country are now supplying around two million rubber plants to the industry annually.
Opining that although the local rubber industry is yet to reach its full potential, Ministry of Industry and Commerce Secretary Anura Siriwardena while sharing insights on the Government’s policy on the development of rubber based product manufacturing industries assured all necessary and possible support to develop the industry will be provided.
“Our collective vision is to convert every kilogram of rubber produced locally to high value added products. The Government will provide all the possible support to develop the hard and soft infrastructure required to enhance value conversion ratio from the current $ 9300 per MT to 15,000 per MT by 2020,” expressed Siriwardena.
He elaborated that to achieve the set objective, the Government will give the necessary incentives to develop human resource and technological skills that will allow the industry to leapfrog from its current status to reach global competitiveness.
Siriwardena identified a number of growth constraints of which the key were unsteady supply of local natural rubber, no local production of synthetic rubber and rubber chemicals, high cost of energy and imported materials, and low investment on laboratories and research and development (R&D).
Assuring effective measures have been taken to address the barriers, Siriwardena shared that a long-term master plan has been developed where 23 projects within 10 programs have been identified.
Of the lot, nine projects are aimed at addressing constraints in the supply side and 10 are designed to enhance the competitiveness of the rubber products industry.
Tokyo commodity market in town for the first timeWorld’s most liquid rubber market as well as the thirteenth largest global commodity exchange has made a rare appearance in Colombo for the first time yesterday.
“We are the benchmark rubber index in the world. Other exchanges around the world look to us for their rubber future pricing” TOCOM Senior Manager-Global Business Development Ms Keiko Koyama said on the sidelines of the Global Rubber Conference which kicked off in Colombo yesterday.
She was eagerly speaking to prospective new players (to TOCOM) from Sri Lanka as well as 28 other countries who are taking part in the GRC. TOCOM is the leading, benchmark rubber trading exchange in the world open to outsiders (the Shanghai exchange is the biggest in the world for rubber but does not allow any outside players other than Chinese firms).
Sri Lanka Central Bank sources said that Sri Lankan individuals and firms in general, are allowed to invest in international stock markets but are not allowed to remit funds overseas to play in international commodity exchanges. Nevertheless, they could be permitted on a case by case basis to play in international commodity exchanges without a cap / ceiling on the remit amounts, if sufficient justification is made that there is benefit or revenues would accrue to Sri Lanka.
“We invite Sri Lankan individuals and corporates to join the TOCOM with permission from exchange control department of central Bank” said Senior Manager Koyama and added: “Once you are OKed, you can open an account with any of the eight brokers in Tokyo , such as Okachi or Rakuten Securities, who are allowed to take on foreign clients. Thereafter, you can electronically and immediately hedge. We specially invite Sri Lankan rubber industry since it will directly link them to global markets. There is no speedier and direct link to global rubber markets such as this. You can also approach exchanges such as Singapore but when it comes to rubber futures, the world lead is held by TOCOM. We are the benchmark rubber index in the world. Other exchanges around the world look to us for their rubber future pricing. We also set the gold benchmark for East Asia. We are also the most liquid platinum market in the world. Shanghai is the biggest rubber exchange in the world, but is closed to the outsiders”
In January – September 2014, more than 9900 rubber contracts were executed in TOCOM. In 2013, TOCOM was ranked as the world’s 13th commodity exchange.
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