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Synthetic rubber consumption outgrows that of natural rubber

Source : BUSINESS_STANDARD
Last Updated: Sun, Feb 24, 2013 21:54 hrs

As there is a demand-supply mismatch in natural rubber, synthetic rubber consumption is clocking a compounded annual growth rate (CAGR) of 15-20 per cent as against a 5-7 per cent growth rate in natural rubber consumption, says All India Rubber Industries Association (AIRIA). This, therefore, offers huge opportunity for growth for synthetic rubber players in the country.

Niraj Thakker, president, AIRIA said, "The demand-supply gap in production and consumption of natural rubber is there for the last few years, and is expected to continue in the coming years as well. In 2011-12 the production was around 900,000 tonnes while the consumption was around 970,000 tonnes. The production is expected to remain at a 900,000 tonnes per annum level only, and demand-supply gap of around 100,000 tonnes would remain."

He adds that while consumption of natural rubber has grown from 861,000 tonnes in 2007-08 to 970,000 tonnes in 2011-12, up by around 12.65 per cent, consumption growth of synthetic rubber has been higher, from 297,000 tonnes in 2007-08 to 423,000 tonnes in 2011-12, up by over 42 per cent.

Synthetic rubber is mostly used in the manufacture of tyres, besides in cycle tyres and tubes, footwear, belts and hoses, among other items. Consumption from the automotive sector is rising. "Demand from the automotive sector is rising, and synthetic rubber finds usage in various automotive applications," Thakker said. Production of synthetic rubber, however, has not grown significantly either, from around 101,000 tonnes in 2007-08 to over 110,000 tonnes in 2011-12, he informs adding that there are only a handful of players who produce synthetic rubber grades.

One of the producers of synthetic rubber is the Ankleshwar based Omnova Solutions India private limited, which has a capacity of 27,000 tonnes per annum.

The company has approvals in place for expanding capacity to 43,000 tonnes per annum, informed M Majumudar, senior vice president, Omnova. "We are working on developing niche products based on different grades that could also find a demand in the overseas markets. Research and development work is on," he adds.

Around 90 per cent of India's natural rubber is produced in Kerala.



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