BY Dr Ahmad Ibrahim

Revenue from petroleum is now a major income source for the country. Not very long ago, it was natural rubber (NR). Now however, NR plantation has been mostly replaced by oil palm. This is because palm oil gives better returns. But this does not mean NR is no longer important. NR still brings in sizable revenue for the economy. The export of rubber products, especially latex gloves, earns millions every year. If we add the earnings from the rubber-wood furniture export, we can safely say NR is still a major economic force. But is this sustainable?

Can we bring back the glory of NR? It is not impossible if the right strategies are put in place. In recent years, NR prices have shown positive trend. The price has even reached a high of more than RM10 per kilogram. This was never before achieved. Investors are re-evaluating NR. Its tag as a sunset industry is now being critically re-assessed. Is NR bouncing back? Some say it is still too early to make any conclusion. But the signs are encouraging. The spike in prices has been mainly linked to the surge in oil prices as well as the escalating demand in China. And experts agree that both the world oil price and the pent up demand in China will remain bullish for many more years to come.

For Malaysia, income from oil export will start declining once the country becomes a net importer. This is expected to occur in a matter of less than ten years. We need to explore other income sources. Will NR be an option for the country? How can we sustain the present bullish spell of the NR business? Is there a role for science, technology and innovation, STI The Academy of Sciences Malaysia recently teamed up with the Malaysian Rubber Board to explore such opportunities. A forum was held to discuss how Science and Technology can chart new directions for the country’s natural rubber industry. The verdict from the meeting was that NR can bounce back if the right strategies in STI are pursued.

We now live in a new global business environment. Country borders have mostly disappeared. Goods can move easily between countries. Competition is growing more intense. Consumer expectations have also changed. Increasingly, products which negate environmental well-being are less preferred. Buying environmentally friendly products or green purchasing is becoming more popular. In fact green procurement has even become regulatory practice in many countries. In line with that, there is also a growing preference for natural and renewable materials. NR is definitely natural and renewable. This means NR can command a preference over synthetic materials in the green economy. This can be further enhanced with the right strategies.

At the moment, NR as a whole is still a thriving global business. The world NR production has increased from 6 million tonnes in 1995 to 9.6 million tonnes in 2009. Consumption has also increased to 9.5 million tonnes. Demand is not a problem for NR. Among the NR producing countries, only Malaysia has shown a decrease in production. The biggest increase is in Vietnam, where production has jumped by more than 489% for the period 1995-2009. Malaysia’s production

has decreased by 21% during the same period. The NR acreage in Malaysia is also on a downward trend. Can something be done to stop the decline? How do we inject new vigour in NR?

NR consumption in Malaysia is about 595,000 tonnes, of which more than 470,000 tonnes end up as latex products. Malaysia is now the world’s largest consumer of latex concentrate, world’s largest supplier of medical rubber gloves and world’s largest supplier of latex thread and cord.

The import of NR into the country has been on an increasing trend. In 2009, total NR import has exceeded 730,000 tonnes. Export has however declined to about 700,000 tonnes. With the decline in rubber cultivation, not only is the export revenue decreasing, but equally worrying is the growing dependence of the downstream sector on import. This may not be sustainable because as soon as the other producing countries start expanding downstream, they will have less latex concentrate for export. This means Malaysia’s latex products sector will be adversely affected.

It has been predicted that in 2018, the world rubber consumption will reach 28 million tonnes. NR share is expected to increase to about 50% in 2018. 65.5 % of NR consumption is now in Asia. China leads the NR consumption in Asia. 80% NR end up in tyres where Asia is now a dominant market for NR. So the question of lack of demand does not arise at all. But supply may face challenges. There are constraints on further yield improvement. Climate change is one factor. There is now more rainy days, higher morning temperatures affecting latex flow, extended wintering days and the emergence of new diseases. All these will contribute towards the growing tightening of supply. This may have been partly responsible for the high prices.

How can we arrest the decline in the rubber areas in Malaysia? The industry may have to rethink its policies to drive the growth of the rubber business. Malaysia is now behind Thailand and Indonesia in NR production. In fact very soon the production in India may also exceed Malaysia’s. Though oil palm has taken most of the areas earlier under NR, there are still sizable areas available. There are areas in the dryer North where oil palms do not perform
as well. Why aren’t big plantations venturing there? For that matter, why aren’t big rubber plantation

houses venturing into Indonesia and the other emerging rubber growing countries? They do that in oil palm but not rubber. Why? At the same time we see China and even Vietnam already looking beyond their borders to plant NR.

The focus should be on new and unique downstream technologies in latex products and the dry rubber products which will strengthen Malaysia’s position as the place to manufacture rubber-based products. The Malaysian NR industry should capitalise on the growing green consumerism movement in the world. Modification work on NR, whether chemical or biological, should be a useful research area not only to develop new materials but also to improve the properties of NR vis-a-vis competing materials such as synthetics. The rubberwood sector, now an important revenue earner for the industry, needs careful planning to further strengthen the sector. These would include the forest plantation programme and other process improvement research.

Research in the basic science of NR and also the non-rubbers in the latex will need a new vigour. We also need to research new rubber-like materials which can complement NR in production. For all you know, it may be another rubber producing crop. Already we hear of a promising rubber crop which produces latex without the allegernic proteins associated with Hevea. We have to explore this. New breakthroughs in genetic engineering have made it technically feasible to deploy the rubber tree as a biofactory for various products including pharmaceuticals and fuel. The potential application of nanotechnology to further improve NR properties calls for serious research. Whatever future of NR in Malaysia. It would therefore be strategic to establish a technology intelligence group tasked with the responsibility to scout for and collate information on global technology developments related to the NR industry and undertake the relevant technology foresight studies.

It is clear that with the emergence of new scientific tools, NR can harbour new hopes. In fact, with the right investment in scientific R&D, there is no reason why the glory days of NR cannot be brought back.

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