Thursday, June 3, 2010


Govt to doll up aging rubber plantations

The Jakarta Post, Jakarta | Thu, 06/03/2010 11:03

The government will revitalize up to 400,000 hectares of aging rubber plantations in a bid to meet growing domestic demand for high-quality crumb rubber, a senior official says.

Director general of plantations at the Agriculture Ministry Ahmad Manggabarani said Wednesday that locally produced crumb rubber was mostly exported because domestic buyers preferred higher quality imports.

“Domestic rubber-based manufacturers absorb only about 422,000 tons, less than 15 percent of the total domestic crumb rubber output,” he told The Jakarta Post on the sidelines of a seminar.

Crumb rubber is semi-processed rubber used as a raw ingredient in rubber products.
Ahmad said about 400,000 hectares of the country’s total 3.44 million hectares of rubber plantations would be revitalized by the end of 2010 with the aim to produce better quality raw materials for crumb rubber production.

“We have 13 banks that have agreed to offer about Rp 40 million (US$4,360) in loans with a 6 percent flat lending rate for each hectare of land that will be revitalized,” he said, adding that the government would subsidize the loans.
Local crumb rubber factories produce 2.9 million tons per year on average, Ahmad said.

Tony Tanduk, director of the downstream chemical industry at the Industry Ministry, said increasing the quality and quantity of raw rubber would boost the competitiveness of Indonesia’s rubber on the global market.

“We have to increase our rubber plantations’ productivity to at least 1 or 2 tons per hectare from just 901 kilograms annually,” Tony said, adding that natural raw rubber fetched about $3 per kilogram on global markets.

According to data at the Industry Ministry, last year the country’s rubber and rubber products exports decreased to 1.99 million tons, worth $3.24 billion, from 2.3 million tons, $6.06 billion, in 2008.

In 2009, exports of rubber products alone reached $1.6 billion, comprising $1.1 billion worth of tires, $198 million in rubber gloves, $165 million in industrial rubber goods and $169 million in other rubber goods.

According to the Agriculture Ministry, Indonesia has the largest area of rubber plantations in the world, with 3.4 million hectares, followed by Thailand with 2.6 million hectares and Malaysia with 1.2 million hectares.

However, despite Indonesia’s massive area advantage, it is the second biggest rubber producer, outputting 2.4 million tons of rubber per year, behind Thailand, which produces 3.1 million tons.

“Blessed by natural resources, Indonesia should be the world’s biggest rubber producer,” Ahmad Manggabarani said, adding that the country’s rubber had good prospects on the global market,especially since China was leading the region’s recovery from the recent financial downturn.

Nevertheless, he said, Indonesia would rather see the other two biggest rubber producers as partners rather than competitors.

“We have agreed with Malaysia and Thailand to form the International Tripartite Rubber Council to regulate the world’s rubber supply and demand, which influence global prices,” he said. (ebf)

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