Tire manufacturer could increase local sourcing if PHL rubber quality improves

Car tire manufacturer Yokohama Tire Philippines Inc. will consider increasing its sourcing of local rubber if its quality improves to meet the company’s standards, said a report from the Department of Trade and Industry. DTI Undersecretary for Regional Operations and Development Merly Cruz said the Department had recently met with company officials on this issue. “... YTPI claimed that low quality of crumb rubber produced in some areas in Mindanao is one of the factors contributing to its minimal sourcing of supply locally," Cruz quoted DTI national rubber industry cluster manager and Region 9 assistant regional director Sitti Amina Jain as saying in a report. Jain said Yokohama has been importing 94 percent of its natural rubber requirement from Thailand and Indonesia. Only about 4 percent of its requirement is sourced from local producers in Mindanao. Currently, Yokohama produces 21,000 tires of varying sizes every day. Each tire is 20 percent natural rubber and weighs an estimated average of 15 kilograms. DTI said given these estimates, Yokohama is assumed to have a total natural rubber requirement of 21,000 metric tons for 2012. This amount requires 12,400.76 hectares of land at an average annual yield of 1.688 metric tons per hectare. By 2017, YTPI will produce 50,000 tires a day and will require an estimated 51,000 metric tons of natural rubber. This will need a total area of 30,213.27 hectares of land. Jain said the DTI will launch an industry-wide quality improvement advocacy in partnership with University of Southern Mindanao-based Philippine Rubber Testing Center and the Philippine Industrial Crops Research Institute (PICRI). This project is an initiative to promote quality awareness and standards compliance among rubber farmers and processors in order to facilitate easier access to market, Jain added. “The requirements of YTPI and Philippine Rubber Industries Association members represent a huge opportunity from the domestic market alone. The country has a huge potential to meet these requirements and organizing the 1st Philippine Rubber Investment and Market Encounter [Prime 2012] would be a big leap towards this direction,” Cruz said. The event will bring together at least 300 participants from the rubber industry, the government, and market experts to address current challenges. Based on industry sources, about 85 percent of the total Philippine production of natural rubber is exported, and only 15 percent are sold for domestic consumption. However, official data indicates that more than 70 percent are sold in the domestic market and only about 30 percent are exported. — BM, GMA News