NORTHERN MINDANAO RUBBER INDUSTRY STATUS AND PERFORMANCE
In the Philippines, natural rubber production remains an emerging industry even though the country started growing trees at around the same time as Thailand, Indonesia and Malaysia. At present, these three countries produce 75% of the world’s rubber requirement.
The Bureau of Postharvest Research and Extension (BPRE) reports that domestic consumption of rubber in 2006 was 160,000 -180,000 with a 15-20% increase in demand annually.
Seventy percent of the total natural rubber production is utilized by the tire and construction industries while the rest goes to other non-tire products.
A look in the rubber industry in the Philippines reveals that the country ranks seventh in the world rubber production with a total of 390,962 MT produced in 2009 (FAOStat, 2011). The top three producers are Thailand, Indonesia and Malaysia.
Cup lump rubber production in the 2nd quarter of 2011 grew by 6.08% to 110.77 thousand MT from 104.42 thousand MT in 2010 (BAS, 2011). The increase was attributed to early recovery from defoliation which led to increased tappings in Zamboanga Sibugay. High price of rubber likewise intensified tapping in North Cotabato, while an increase in number of tappable trees was noted in Basilan.
The country has about 139,000 hectares planted to rubber, with Mindanao accounting for 98.67% of the total production area .
Top producers in Mindanao are Regions IX (Zamboanga Peninsula) and XII (SOCCSKSARGEN) with shares of 43.30 percent and 37.94 percent in the national output, respectively. Total production from these two regions reached 321,091 MT in 2010.
In Northern Mindanao, only 0.25 hectare from the province of Camiguin was added to the total regional area planted to rubber for the last two years, the number of bearing trees on the other hand increased by only 297 trees in 2010. With this minimal development, production grew by only 0.30% from 10,168.59 MT to 10,198.86 MT in 2010.
Though the contribution of the region is very minimal in terms of production, Northern Mindanao has the highest recorded yield per bearing tree of 13.33 in 2010.
For the last 10 years, average yield of per bearing tree is 19.78 kg. According to crop specialists, this high yield is attributed to the favorable weather conditions.
According to the GMANews.TV, an estimated 190,000 Filipinos depend on the industry for their livelihood, with 38,000 families engaged into rubber farming, 18,000 working as part-time off-farmers and another 20,000 being employed as tappers in the year 2009.
In the meantime, the Philippines’ 30 existing rubber processing centers provide jobs for 600 processors and 700 buyers and traders.
According to Ms. Akut of DA RFU-10, 1 tapper is employed per 3 hectares of rubber plantation. So with the existing 4,567.25 area of production in Region 10, an estimated 1,522 tappers were employed by 2010.
C. Marketing Practices and Prices
Rubber is usually marketed as centrifuged latex, cup lumps, crepe sheets, crumb rubber and smoked. Marketing is usually done through local and provincial assemblers then to processors/traders and manufacturers.
While majority of the regions rubber produce is sold to traders from Cotabato, a significant amount is marketed backdoor to Malaysia at about P5/kg higher than local price.
At present, there are 130 companies nationwide involved in the Rubber and Plastic Products Industry (www.peza.gov.ph).
Based from DA RFU-10’s database, there are 11 identified rubber processing and buying stations in Northern Mindanao and majority of which are in the province of Bukidnon, these are:
1. Pioneer Rubber Corporation - Maramag, Bukidnon
2. F.S. Sajulga Processing Plant - Malaybalay City
3. Standard Rubber Corporation - Kibawe, Bukidnon
4. FARBECO - Talakag, Bukidnon
5. Philippine Rubber - Talakag, Bukidnon
6. Mindanao Rubber Corporation - (Mobile Trader)
7. MAC Rubber Corporation - (Mobile Trader)
8. NYLEC - (Mobile Trader)
9. TNP - (Mobile Trader)
10. ACK Industrial Corporation - (Mobile Trader)
11. Valencia Rubbertex, Inc. - (Malaybalay City )
D. Import and Export
Based on the report from ANRPC, the gross import of the Philippines from 2008-2010 is negligible. Export on the other hand reached 27.2 thousand tonnes.
In 2009, the Philippines exported 25 million kilos of latex, rubber plates, and other rubber products worth US$40.5 million, which were shipped mostly to China, Hong Kong, Taiwan and Malaysia.
Data from the regional office of DTI showed that Northern Mindanao started to export natural/raw/processed rubber in 2007. From its initial US$1.2 million value of exports, it is now valued at almost US$10 million in 2010.
Valencia Rubbertex, Inc. continues to export rubber boots to Japan. Unfortunately, export of rubber wood halted in 2005 due to high demand of the product in the local market.
According to DA RFU-10 local producers of rubber wood in the region could still not meet the demand of the local market. Supply of rubber woods used for rubber expansions in the region were bought from neighboring provinces like Cotabato and Zamboanga.
The top exporters of natural and processed rubber in the province are Valencia Rubbertex, Inc., FARMA Rubber, Pioneer Amaresa, and Southern Peninsula Rubber
The Philippines has large extent of potential lands suitable for expanding the cultivation of rubber.
In Northern Mindanao, other than its favorable weather conditions, a total of 500,000 hectares of potential area for rubber production was identified.
Other opportunities include:
ISSUES AND CONCERNS
After a hundred years in the industry, rubber as a priority commodity in the country has still plenty to accomplish. Critical issues are to be addressed to sustain the supply and demand of rubber and get a bigger share in the global market.
Among the issues and concerns affecting the industry in the region are the following:
1. Low productivity
a. Area planted to rubber is dismally minimal due to conversion of rubber areas to industrial crops like banana, sugarcane, pineapple and oil palm.
Expansion of rubber areas is likewise affected by the following:
§ Availability of quality planting materials
§ Competition with other industrial crops (banana, sugarcane and oil plam)
§ Limited access to credit and financing
§ Tenurial problems
§ Unstable peace and order situation
b. Old and senile rubber trees
c. Clone planted are not those recommended for elevation and climatic condition
d. Farmer lack technical knowledge on rubber production
2. Low product quality
a. Poor harvest and post harvest practices
b. Values of farmers/producers
3. Inadequate infrastructure support for production, processing and marketing
4. Inadequate R&D and extension program
5. Inadequate market information specially for rubber holders
6. Aging pool of technical experts
7. Back door marketing of raw rubber
8. Climate change (flash flood and tornado)
Northern Mindanao Roadmap and Action Plan
To address these issues, a localized Rubber Roadmap was crafted for Region 10 (Northern Mindanao). This was patterned after the Rubber Industry Roadmap which aims to increase production of raw rubber by 10% per year, improve the marketing system, meet world market standards with respect to quality and consistency of rubber, and to increase the income of growers and those in the peripheral industries in rubber during the first 3 years of runner (for small rubber holders).
In order to achieve these, here are the strategies identified by the stakeholders and activities lined-up from 2011-2015:
Objective 1: To increase production of raw rubber by 10% per year
§ Planting and replanting of high yielding rubber clones
§ Apply new planting design using quality planting materials
§ Installation of rain protector
§ Provision of credit facilities (ACEF, LBP, DBP)
§ Conduct of trainings on nursery establishment at the LGU level and production pf quality planting materials
§ Conduct of training on improved production technology and pest and disease control
§ Planting of new areas (10%) and integration of cash crops during the gestation period
§ Use of latex stimulants (for older trees)
§ Incorporation of rubber in the Agro-forestry (ISF, SIFMA, etc) program of DENR and LGUs.
Objective 2: To improve marketing system
§ Strengthen MIS on rubber, particularly on Price info bulletin
§ Improve transport system through construction of FMR and tram lines
§ Unify producers and organize marketing clusters
Objective 3: Meet world market standards with respect to quality and consistency of rubber.
§ Level 1 (Producers) – strengthen rubber organization re: internal quality control
§ Level 2 (Trader) – Price incentive for good quality cup lumps / dry rubber
§ Level 3 (Processor) – Financing for improvement of post harvest facilities
§ Level 4 (Manufacturing) – establishment of on-site rubber manufacturing plant (village level)
§ Implementation of the Philippine National Standards for rubber
§ Establishment of a rubber testing laboratory
§ Training on product quality improvement and post harvest handling
Objective 4: To increase the income of growers and those in the peripheral industries in rubber during the first 3 years of runner (for small rubber holders)
§ Intensify rubber-based cropping systems research
§ Introduce integrated and sustainable farming systems approach
18 May 2010 (Press Release) - Republic of the Philippines Joins ANRPC
(Bloomberg, October 3, 2011)
Rubber Output Forecast Revised Up To 10 Million Tons by ANRPC http://www.anrpc.org/html/market_industry_update.aspx
(Tyrepress.com, October 3, 2011)
Analysts: Natural Rubber Prices to Average $5.10kg in 2012
Rubber Product Manufacturers. (2005). Retrieved January 18, 2011, from Meere Industries:http://www.meererubbermolding.com/rubber-product-manufacturers.htm
Rubber Product Manufacturing. (2010). Retrieved January 20, 2011, from IBIS World:http://www.ibisworld.com/industry/default.aspx?indid=529
Rubber Product Manufacturing Industry by Kristine M. Reyes 1-21-2010
6 Rubber Commodity Notes, FAO (2004)
7 On the Road to Progress: Invest in Mindanao, DA (2005)
Natural Rubber Industry Cluster Assessment for Trade Liberalization in line with the finalization of DOHA Development Agenda.
Submitted by Cecilio P. Costales for Universal Access in Competitiveness and Trade (UACT), Philippine Chamber of Commerce and Industry (PCCI) and Angelo King Institute – De La Salle System (AKI-DLSS), Makati City, June 06, 2006.
Major Non - Food and Industrial Crops Quarterly Bulletin April-June 2011 (BAS, 2011) Production, Area and Number of Bearing/Mature Trees
January-June 2011 (BAS, 2011)
Northern Mindanao Rubber Industry Profile published by Department of Trade & Industry-10
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