The Synthetic Rubber industry is a globalised industry that has a presence in all geographical areas of the world and in recent years has experienced significant growth in the Asia Pacific region. But like any industry, it can be affected by everything that happens in the places which operates or commercialises its products. So, any policy that generates trade barriers and causes distortions in the commercial flows can have an impact on the operational and financial performance of the Synthetic Rubber industry too, says Brian Chapman, in his first ever interview to Rubber Asia, soon after his election as President International of IISRP. He was pointing to the impact of the trade war currently going on across the world.
According to Chapman, what is most important is to promote the competitiveness of the SR industry, its products, operations and technologies, in all aspects such as operational and financial performance, competitive prices and long-term sustainability, through technological development and innovation. Here is the full text of the interview:
First of all, let us congratulate you on your election as President International of the IISRP, the most powerful body of the global SR industry. Could you please elaborate on the present status of the global SR industry and the latest challenges? Also, please tell us what opportunities lie ahead
Thank you very much, I appreciate your words.
About the status of the global synthetic rubber industry, it has been a constant challenge, but even so, it has grown. Some years ago, after the global economic recession and the take-off of the Chinese economy, the synthetic rubber industry ended up with a production overcapacity, as a higher consumption of synthetic rubber was expected. This overcapacity situation became more significant in the Asia Pacific region, where the majority of new projects and expansions were taking place resulting in this region producing the largest volume of synthetic rubber. However, while the industry is struggling, some overcapacity has been reduced by the growth of demand in the last year.
But, these challenges are not exempt from opportunities, such as strengthening our operations and making them more competitive, as well as the search for new applications and development of new products for different industries such as personal care, auto, medical and construction among others.
How do you foresee the prospects of the SR market in the future, especially, in the context of cheaper availability of Natural Rubber, prospects of NR oversupply in the coming years and the trend of crude oil prices escalating?
We believe that the synthetic rubber market will continue to grow in the long term. But the challenges will continue — the volatility of raw material prices, the potential threats in the dynamics of the rubber industry and the free world trade with protectionist policies that could cause the decline in the growth rate of the world economy. On the other hand, if we would like to anticipate the balance between SR and NR consumption, we know there is enough interplay between these two materials in the tyre sector; however, we strongly believe that performance will dictate the requirements, and this key factor is supporting the growth of synthetic rubber consumption.
In the recent past, the price of crude oil has been moving upwards. How do these price dynamics affect the demand and supply of SR?
The commercial practice that has been occurring for many years is that the price of synthetic rubber is related to the price level of the main monomers, among other factors. From a monomers perspective, oil price is one of the factors that impact their price level. A high oil price level could affect the level of competitiveness of synthetic rubber prices when competing with other substitute materials, such as natural rubber. I must clarify that the IISRP as an institution does not monitor the prices of the different types of synthetic rubbers since our statutes do not allow it and it is a commitment as an institution that we must avoid monopolistic practices, price fixing and promote legality in commercial practices.
What are the new applications of Synthetic Rubber? And what are the innovations taking place in the SR industry to meet the new and emerging applications?
When people think about synthetic rubber, they usually relate it to the tyre sector, since the manufacturing of tyres is the major application or end-use. However, synthetic rubber is used in different applications or end-use markets such as:
Auto parts – In the automotive industry, the presence of rubber is seen in fluid transfer systems, body sealing systems, transmission systems, automotive anti-vibration, sealants, adhesives & coatings, O-Rings, molded parts, flat seals, foam and converting products, body parts, spare parts, etc.
Medical industry – Rubber is used to make various objects including surgical gloves, tubes, stoppers, condoms, breathing bags, cushioning or supporting materials, prosthetics, fabrics, implants, and catheters.
Adhesives & sealants – Industries that typically use rubber adhesives and sealants include construction, consumer products, assembly, packaging, labelling, and transportation.
Rubber footwear, industrial and commercial goods – Hoses, rubber mats, rubber bands & belts, etc.
Construction Industry – Additive/modifier of Asphalt – paving, different waterproof membranes (roofing), sealants, flame retardant materials.
Appliances – Plastics – impact modifier
Lubricant – Viscosity modifier
Personal care – Diapers, non-woven, rubber grips, others.
In each of the applications, there may be a new development, a new formulation of compounds, etc.
Is IISRP promoting the start-up culture which is very prominent in industries across the globe? Do you have any specific projects in this regard?
At this time, we do not have a project or initiative on this topic. Recently, we performed a survey, and the results showed that sustainability, innovation, and improved margins are the top priorities and for which, we are driving our strategic direction. It is recognised by many of our members, however, that there is a shortage of labor around the world for our industry and providing an improvement to work-life balance, improving transparency of communications and the environment of the workplace will lead to a more engaged and productive workforce with less turnover.
The IISRP conducts scientific research on the health effects of workers in the industry. Could you please elaborate on the latest findings of this research?
Yes. In fact, for quite a while, the IISRP has been doing scientific studies on the effects of the exposure of the monomers used in the manufacturing processes, by the workers of the plants that produce synthetic rubber. We recently completed a study of the effect of exposure to butadiene and styrene to workers in the SBR production plants in North America. It was a very detailed study, where the analysis included the effects of exposure to monomers at work, considering the gender of the workers, the workplace within the plant, the exposure time, using information from various plants in the United States and Canada from the 1940’s to the 2000’s.
Today, we are starting two additional studies related to butadiene and styrene, and the effect of exposure of workers at the time of manufacture of synthetic rubber.
We understand that IISRP has been promoting a lot of green Initiatives in the industry. We would appreciate if you could elaborate on this.
IISRP monitors, on a daily basis, all regulations that may impact the industry or help to have safer and more environmentally-friendly operations, which is also very important for our workers. We also carry out a benchmarking exercise, which allows us to compare the performance of the operation with the producers. This exercise includes environmental key indicators such as waste generation, emissions, energy consumption and others that help us to improve operations.
Also, today we are reviewing the study of the CO2 footprint (Life Cycle Assessment-LCA) that was made a few years ago, to decide if we need to update it shortly with the recently revised methodology. In addition, we have included sustainability topics in our recently established webinar programme.
How does the SR industry view the intensive research taking place across the globe to find a commercially viable alternative to NR? In your opinion, what will be the impact of this research on the prospects of the SR industry?
As you have mentioned, there are lots of efforts to obtain natural rubber from different sources, to make it possible in different climates and geographical territories. As a matter of fact, this specific search for an alternative to natural rubber led to the creation of synthetic rubber many years ago. The research of natural substitutes did not derive from natural rubber; there were products that offered a different and, in some cases, similar performance.
These products were the basis of the initial portfolio of synthetic rubber products in the industry.
This continuing search can and should encourage us to find products and applications with greater differentiation and specialisation, and, in addition, should encourage us to look for other uses of synthetic rubber in applications different from the usual ones, that is, to diversify the applications of our products.
In addition, the synthetic rubber industry has had some very incipient efforts to find the supply of raw materials from renewable sources, other than oil. The biggest efforts were made a few years ago when we faced high oil prices and monomer supply issues; but as these issues faded, the interest decreased, and efforts to covert were reduced since they were not very attractive on an economic and commercial basis.
However, I believe now it is important to reflect on how to resume these initial efforts, since today there is a mega trend towards greater sustainability of products and operations.
Do you think that the trade war currently happening across the world will impact the production/pricing of Synthetic Rubber?
The Synthetic Rubber industry is a globalised industry that has a presence in all geographical areas of the world and in recent years has experienced significant growth in the Asia Pacific region. But like any industry, it is not an isolated entity. It can be affected by everything that happens in the places which operates or commercialises its products, and of course, it can also be affected by the performance of the global and regional economy, as well as with any policy — whether local or global — that affects the performance of the regional or global economy. So, any policy that generates trade barriers and causes distortions in the commercial flows that we have today, and therefore, affects the global or regional economic performance, can have an impact on the performance of the Synthetic Rubber industry, both in its operational and financial performance.
Today, the SR producers operate in many countries with different trade regulations, some with more open economies than others. In recent years, there have been some protectionist claims that have not made a major impact on trade flows in general. We believe that having fewer trade barriers between countries or regions, and having policies that promote fair trade, will be for the benefit of all. The most important thing that we must promote, as an industry, is the competitiveness of our products, operations and technologies, in all aspects such as operational and financial performance, competitive prices and long-term sustainability, through technological development and innovation.
And finally, please let us know your priorities and plans as the new President International of IISRP?
Our strategic direction is focused on increasing the value of our Association’s Membership and continuing to expand the Membership across the globe. To do this, it is important to promote the largely positive influences that the Synthetic Rubber industry has in improving the quality of life through diverse uses and applications.