Thailand’s meteoric rise to global leadership in NR production and export has been driven by the ever increasing demand for the commodity. Massive expansion of the area under rubber and foreign investments and assistance to small holders who constitute the majority of planters helped the country to retain its supremacy in NR production. However, the relatively fast increase in production in Indonesia means it will move to a closer position to overtake Thailand as the number one producing country, according to analysts
Rubber cultivation was at a slow pace in the country to start with in 1899, but it picked up momentum later. By 1980, there was 1.52 million hectares under rubber with output of 501,100 tonnes. Large-scale rubber expansion in the 1970s and early 1980s saw the output rise to 1,271,100 tonnes by 1990. The next year, Thailand made history — in 1991 the country moved past Malaysia and jumped onto the top of the world in NR output with 1,340,800 tonnes.
Massive expansion of area under rubber in the 90s helped the country to retain the top slot in NR output in the following decades. Ready market with regular income made the crop a favourite of the small planters and the rubber area expanded to 2,761,000 ha. by 2010, about 14% of the farm-land in the country, and production to 3,252,000 tonnes. Small growers with rubber area upto four hectares own 95% of the country’s planted area and produce 96% of the crop.
The Rubber Research Institute of Thailand has helped them to undertake systematic planting, crop protection, crop harvesting and processing. Group processing centres were set up in major rubber growing regions to improve quality of the small cultivators’ crop.
Indonesia has been following Thailand for the last 20 years at the second place in NR production, but could not succeed in overtaking the country despite possessing the highest rubber area of 3,445,000 ha. against Thailand’s 2,785,000 ha. at the end of 2010. Thailand has been scoring over Indonesia on account of higher productivity – it was 1,720 kg/ha against Indonesia’s 987 kg in 2010. The country has extended rubber cultivation massively in the recent past, by 689,800 ha. in the five-year period from 2005 to 2010, at a highly healthy annual average of 137,960 ha.
Replanting of old plantations to enhance productivity was also significant at an annual average of 47,400 ha. during the period. Government support in this is crucial with financial assistance for fresh planting and replanting. Fund for the assistance is collected through a levy on the rubber exported
Processing and marketing
The latex collected is processed into block rubber, sheet rubber, centrifuged latex and crepe rubber. Thailand was a stronghold of sheet rubber until recently, but its share in the total processed crop has come down of late. Block rubber output in 2009 was 1.06 million tonnes, 33.5% of the total. The share of ribbed smoked sheets (RSS) at 837,294 tonnes was 26.5%, of centrifuged latex 22.24% at 703,817 tonnes and of crepe rubber 15.4% at 487,160 tonnes.
Though the share of sheet rubber has fallen behind block rubber, good quality helps it to be in good demand in the world market. Thailand is still the single largest supplier of sheet rubber grades to the world market. Revenue from rubber measures up in excess of 30% of Thailand’s agricultural income. In 2009 2.72 million tonnes of rubber was exported, which fetched $ 4.26 billion. About 90% of the processed crop was exported in 2009, which amounted to over 30% of the world NR supply. The Office of Industrial Economics has projected the export value going up to $ 6.6 billion by 2012.
Export of NR was the highest ever in 2010 at 2,866,000 tonnes, 9% over the export of 2,628,000 tonnes in 2009. Thailand plans to build a stock reserve of 300,000 tonnes
of rubber, with 100,000 tonnes of Government share and 200,000 tonnes of share of
the private sector, to maintain a stable,
remunerative price in the country. Rubber wood processing is an important activity in Thailand as processed rubber wood is generally accepted as an environment-friendly alternative to hardwood timber.
Though not quite large, Thailand has a developed rubber manufacturing sector. Automobile production has an impressive growth story in the country and the auto rubber components such as tyres, rubber hoses, exhaust parts, suspension dampers, mouldings, mountings, extruded items like latex thread, cushioning material like sponge rubber, adhesives, paddings, beltings, wire and cable sheathing etc. constitute a major sector. Other products include roofing material, balloons, rubber bands, pulleys, toys, sports and leisure goods, medical devices, carpet underlay and a host of other rubber articles. A significant portion of the products is exported.
Tyre manufacturers are the largest users of natural rubber in the country, accounting for around 50% of the domestic rubber use. In addition to the multinational tyre major trios Goodyear, Bridgestone and Michelin there are 16 more companies in the country producing tyres for cars, trucks, buses and aircrafts. In medical gloves, Thailand is the second largest world producer and exporter.
In production and export of condoms and pharmaceutical products other than gloves, Thailand has a significant position at the world level. The country has figured prominently in the world rubber industry on account of its abundant resources of natural rubber and cost-effective workforce.
Rubber consumption was 783,000 tonnes in 2010; 459,000 tonnes of NR and 324,000 to-nnes of synthetic rubber. Synthetic rubber is produced in the country, tho-ugh the quantum does not fully cover the domestic demand. In 2010, its production was 200,000 tonnes.
The rubber business is flourishing on solid Government support and tariff concessions from free trade agreements with trading partners such as China, Australia, New Zealand, India and the ASEAN nations. Recent developments include Thailand’s Board of Investment (BOI) making efforts to strengthen investment and business collaboration with India in rubber products. New ventures to produce rubber products and rubber wood products receive benefits of tax breaks and exemption from duties on imported machinery.
Thailand has become a hot investment destination in recent times. Thai Bridgestone Co. Ltd. plans to set up a $25 million retread plant in addition to the already operational tyre production facility. Goodyear (Thailand) Public Co. Ltd. is investing in a radial aircraft tyre plant on top of the existing facility to produce automobile tyres. Thai Nippon Rubber Co. is spending 600 million baht to build a large condoms factory in the Chonburi Province. The plant will increase the company’s capacity by 75% from the current 800 million pieces. The indigenous Sri Trang Group also plans to double annual production of gloves to 20 billion in the next five years.
Many Government bodies, trade associations and R&D institutions are actively behind the Government of Thailand in promoting the rubber industry’s competitiveness. Besides the Board of Investment and the Rubber Research Institute of Thailand, reputed organisations like the National Science and Technology Development Agency and the Department of Industrial Promotion, the National Metal and Materials Research Center join in this laudable endeavour. With their unabated enthusiasm coupled with the efforts of cost-effective workforce, Thailand is certain to continue as a hotspot for rubber for many more years
Thailand has, of course, to some degree had an “easier” path because of its opportunity to learn from Malaysian innovations; its support from external organisations; and China’s growing demand for Thai NR. “But Thailand’s challenge will continue to be expanding downstream production, especially by small and medium-sized Thai firms,” says Richard Doner, Professor of Political Science, Emory University, Atlanta, GA in his analysis of the success story of Thailand in NR.