Sri Lanka rubber industry calls for more investment

September, 11, 2020

Sri Lanka’s rubber sector needs more investments, private and public, foreign and local, and thereby common industry infrastructure facilities will improve, Samson International PLC (SIL), one of the largest rubber product manufacturers in Sri Lanka stated.

“Sri Lanka’s natural rubber has a high-demand in the world market due to its unique properties. The country now has a premium quality natural rubber type known as Lankaprene which is odour free to a certain extent, light coloured, and clean which is ideally suited for medical equipment and upmarket value added products. The competent workforce with right attitudes and training will be more productive resulting enhanced earnings and lower turnover making the rubber industry more attractive for employment. The rubber sector needs more investments, private and public, foreign and local, and thereby common industry infrastructure facilities will improve. Collaboration among industry players in precompetitive areas will lead to synergistic effects in industry operations,” Samson International PLC told its shareholders in its annual report 2019/2020.

Sri Lanka’s rubber industry is positioned as the fourth largest source of foreign exchange for the country accounting for approximately 8% of export income.

Samson International PLC, which is a subsidiary of the DSI Samson Group (Pvt) Ltd earns more than Rs. 600 million per year from exports of rubber- related products such as sealing rings, hot water bottles and mats & floorings etc.

Sri Lanka exports almost all types of natural rubber available in the market including ribbed smoked sheet rubber, latex crepe rubber, scrap crepe, all grades of technically specified rubber, centrifuged latex and specialty rubbers.

Presently, Sri Lanka produces around 81,000 metric tons of natural rubber annually. Sri Lanka prides itself in manufacturing a number of value added rubber products by processing raw rubber.

These products include extrusion products like rubber bands, beadings, rubber latex products such as medical, industrial and household gloves, industrial products like hose, auto parts, industrial components, tyres, tubes, automotive and aviation tyres and general rubber products like rubber flooring, floor mats, carpets, sports goods, footwear, hot water bottles and related components.

“Around 60% of the total raw material cost of our products come from rubber. Therefore we always monitor rubber prices. There are fluctuations in rubber prices due to the changes in crude oil prices which pushup the synthetic rubber. If the crude oil prices goes up, the demand for natural rubber is expected to grow as China and other major consuming countries are expected to begin limiting synthetic rubber imports and instead opt to source natural rubber for their end products,” the company stated.

However, the company believes that during the next six months the situation might change due to the disruption from the coronavirus in China and the price could also change from time to time depending on the weather pattern in Sri Lanka and other competing countries.

In the 38th week ( Mid of October ) of 2019, the rubber price started increasing above the rubber prices of 2018. The pale crepe price at the end of March in 2018 and 2019 are Rs. 253 and Rs. 344 respectively. This is an increase of Rs. 91 or USD 0.5 per Kg.