Construction of 1st rubber plant on track
MANILA, Philippines - The construction of the first-ever rubber manufacturing plant in the country remains on track after a Finland-based tire company agreed to make a feasibility and technical study.
Agriculture Secretary Emmanuel Piñol said Finnish tire manufacturer Black Donuts Engineering Inc. would soon undertake a technical and feasibility study for the proposed construction of the Pilipinas Agila Tyre Manufacturing in Davao.
“Black Donuts is ready to conduct a study which would determine the feasibility of a tire factory in the Philippines including financial and technical studies,” Piñol said.
“It was also agreed that the study would be conducted in coordination with the Philippine Rubber Farmers’ Association while the signing of a memorandum of agreement is expected to be done in Helsinki in November,” he added.
Black Donuts, which is involved in the establishment of several tire factories globally, also pledged to help explore sources of funding for the tire factory project which will approximately have an investment of $200 million.
The planned manufacturing plant would cater to domestic consumption for the production of tires for passenger vehicles, cargo, small pick-ups and agricultural machineries.
It was estimated to have the capacity to produce four million tires per year. One tire averages 10 kilograms and is composed of 40 percent natural rubber from the estimated 130,000 hectares of local rubber farms.
This would translate to about 16,000 metric tons (MT) more of rubber to be planted and produced annually.
A different line to manufacture motorcycle and bicycle tires would also be established and is expected to employ about 800 Filipinos.
“The establishment of the tire factory is expected to provide a ready market for the rubber produce of the farmers who will also be part owner of the corporation,” Piñol said.
Data from the Philippine Statistics Authority (PSA) showed majority of the total rubber production comes from Zamboanga peninsula and the Soccsksargen.
Currently, there are only 25 manufacturing and processing plants nationwide, majority of which are allotted for the production of tires.
The country’s P12-billion rubber industry remains to be underdeveloped compared to other countries such as Thailand and Malaysia.
This is due to the inadequate supply of quality planting materials deterring efforts in production expansion, low productivity and poor handling resulting in low-quality rubber.
Poor rural infrastructures, less investments from private and public sectors and lack of marketing and promotional initiatives in the global market also affect the lagging performance of the country’s rubber industry.
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