Making rubber more elastic Secured domestic latex supply, new growth areas key for the future. – Nation

Bangsar – Many of us know this upmarket residential neighbourhood in Kuala Lumpur but how many are aware of its genesis?

In 1906, when Malaya was a British colony, the London-based Kuala Lumpur Rubber Co Ltd started planting rubber trees in Kuala Lumpur to produce the then much in demand commodity.

The names of two board members of the company, Edouard Bunge and Alfred Grisar, a Dutch and a Belgian respectively, were used to create the Bunge-Grisar rubber estate or Bungsar estate, which evolved over time to become the Bangsar of today.

Rubber, the second largest plantation commodity of Malaysia, has a much longer history compared to oil palm, our current largest plantation commodity, and it is no less colourful. The story of Bangsar is but one such example.

It all started with Sir Henry Nicholas Ridley, an English botanist who served as the first scientific director of the Singapore Botanic Garden. He pursued the promotion of rubber trees in Malaya with such fervour that he came to be called “Mad Ridley”.

In 1877, Ridley brought nine seedlings from the Singapore Botanic Garden and planted them in Kuala Kangsar, one of which remains standing outside of the office of the Federal Department of Lands and Mines. Those seedlings originated from the Kew Gardens in England, which in turn, were from seeds brought from Brazil in 1876 by Henry Wickham.

Is rubber losing its elasticity?

In the subsequent decades, Malaya became the world’s largest rubber exporter and contributed tremendously to the British coffers, along with tin. However, declining prices and competition from synthetic rubber contributed to its declining hectarage from the late 70s. However, the decrease in upstream sector has been effectively supported by rapid expansion of the rubber downstream.

The economic contribution from the rubber industry continues to generate increased export revenue for the country, the total exports has increased from RM13.27bil to RM33.26bil for the period from 2000 to 2016.

Be that as it may, planted rubber area stood at 1.076 million hectares as at 2016, just under one-sixth the size of oil palm area, with almost 93% of the area in the hands of smallholders.

Rubber remains an important contributor to the economy but does not receive the attention that it deserves.

The upside of the rubber story is that we are global leaders of latex products, where Malaysia is No. 1 in gloves and condoms, with 63.2% and 20.4% market shares respectively in 2016.

However, this is not the case with natural rubber where the large majority of exports are in the form of Standard Malaysia Rubber and compounds while domestic consumption is dominated by low value-added segments.

However, the story of the upstream segment requires us to do more for the industry as Malaysia is only the fifth largest producer of rubber in the world and this has some impact on our influence over rubber prices. Between 2010 to 2016, our production dropped by 28% from 939.2 million tonnes to 673.8 million tonnes. This decline and the 90:10 ratio of dry rubber to latex production also means that both the domestic dry rubber midstream companies as well as latex-based downstream companies are reliant on imports and this must be managed properly.

Can rubber regain its lustre?

Realising the strategic importance of sustainable upstream supply, rubber was identified as a National Key Economic Area (NKEA), alongside oil palm, with the aim of maintaining its hectarage at around 1.2 million hectares through a combination of replanting and new planting programmes.

The programmes also focus on planting only Malaysian Rubber Board (MRB)-approved high-yielding clones, increasing tapping days to 85% of possible tapping days and planting more densely at 550 stands per hectare.

Under the 10th Malaysian Plan a significant amount was allocated to Rubber Industry Smallholders Development Authority (Risda), Lembaga Industri Getah Sabah and Jabatan Pertanian Sarawak for the programme. As at 2016, 148,461 hectares have been replanted while 53,456 hectares have been newly planted. With scheduled fertilizing rounds and use of latex stimulant as part of implementing good agricultural practices, I am hopeful that when the first batch of areas open for tapping, we will achieve the targeted annual productivity of 1.8 tonnes per hectare. This will be a remarkable turnaround for the upstream rubber industry.

In tandem with supply planning, it is just as important that domestic demand be boosted to consume the increased production.

To support latex-based products, latex collection infrastructure needs a relook to provide competitively priced latex compound and address the domestic feedstock security issue.

We must also not be complacent with our leading global market shares and build on our successes by growing them even further to better meet future competition.

Meanwhile, dry rubber companies need assistance to get connected to the supply chains of industries where there is a sizeable domestic market in industrial and engineering rubber products such as industrial hoses for the oil and gas sector as well as seals, dampers and fenders for marine and aviation MRO.

The upcoming production of Proton and Geely vehicles in Tanjung Malim, could also give a boost for the rubber automotive parts manufacturers.

Having strong domestic baselines are critical for technology development and scalability to position these manufacturers for the competitive regional and global market.

R&D needs to be reinvigorated to enhance domestic rubber consumption in critical areas such as advanced materials, product development and processing technologies. For example, graphene as an additive to rubber could deliver superior properties such as increased strength, excellent conductivity and higher impermeability for both dry rubber and latex-based products.

This initiative has already taken off under the National Graphene Action Plan 2020 led by Nano Malaysia to facilitate late-stage R&D, prototyping and commercialisation of graphene-enhanced rubber products.

Mad about rubber

Rubber’s rich and colourful past was not only a source of livelihood for our forefathers but also laid the foundation that made the strong economic development of Malaysia today possible.

While it may have lost some of its lustre, finding new areas of growth is certainly not an impossible dream, as our world benchmarked Standard Malaysian Rubber and highly successful glove and condom businesses have demonstrated.

Just like Ridley, it is time for us to get ‘mad’ again about rubber. Let’s make rubber more elastic.

  • Datuk Seri Mah Siew Keong is Minister of Plantation Industries and Commodities. Commodities Today and Beyond is his op-ed to share his views, hope and vision for commodities with everyday Malaysians.

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