Tyre industry flags insufficient availability of natural rubber

“The tyre Industry has been experiencing tightness in domestic availability of natural rubber for some time,” said ATMA Director General Rajiv Budhraja.

By Kiran Murali calendar 03 Jul 2024 Views icon12611 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Tyre industry flags insufficient availability of natural rubber

India’s tyre industry is struggling with insufficient availability and unpredictable arrival times of natural rubber, the key raw material for tyre companies. The Automotive Tyre Manufacturers Association (ATMA) has flagged the Rubber Board regarding this crisis.

“The tyre Industry has been experiencing tightness in domestic availability of natural rubber for some time,” said ATMA Director General Rajiv Budhraja. The industry association has alerted the Rubber Board, seeking to improve natural rubber availability to avert plant shutdowns and production disruptions.

ATMA represents 95% of the tyre industry in India with six companies – Apollo Tyres, Bridgestone India, CEAT, Goodyear India, JK Tyres and MRF.

Natural rubber is the main component in heavy-duty and bicycle tyres, tubes, hoses, as well as for products such as conveyor belts, foam mattresses, footwear, balloons and toys. It also has engineering applications in shock absorption, vibration isolation and road surfacing. Around 70% of natural rubber produced is consumed by the automobile industry.

The consumption of natural rubber in the country exceeds the production. In 2023-24, India is estimated to have produced 8.5 lakh tonnes of natural rubber, while consumption stood at 14.2 lakh tonnes. According to the data from the Rubber Board, the average price of natural rubber during March was Rs 177 per kg.

India’s total domestic natural rubber stock was at 3.7 lakh tonnes at the start of the current financial year, against the quantity of 4.4 lakh tonnes in the year-ago period. “The paucity of NR needs to be addressed at the earliest so that tyre production processes are not disrupted”, he said.

Despite the natural rubber prices touching multi-year highs, Budhraja noted that the industry is witnessing a severe raw material crunch. The association also noted that a section of natural rubber producing or traders might be with- holding the material in anticipation of a further increase in the commodity’s prices.

“Consuming interests have no option but to increase reliance on imports of NR to bridge the huge deficit. However imports contracted now, with no visibility of local arrivals, may arrive subsequently and may coincide with peak domestic production season,” the association said.

The total natural import in India was at 4.9 lakh tonnes during FY24. Indonesia accounted for around 27 percent of imports, followed by Vietnam (25%) and Cote d’Ivoire (18%).

India's domestic tyre industry is among the largest in the world, with annual production exceeding 200 million units across various categories including two-wheelers, passenger vehicles, commercial vehicles, and off-road vehicles.

The tyre industry expects to double its exports by value by the end of this decade with the country becoming the third largest tyre maker globally. The companies are targeting to increase their total exports to Rs 50,000 crore by 2030 from the current Rs 23,000 crore. 

Recently, Prime Ministry Narendra Modi urged the industry to work with farms and reduce the import of rubber. Four major tyre makers represented by the tyre association have committed Rs 1,100 crores for rubber plantations on a total of 2 lakh hectares in the North Eastern states to increase domestic production. 

 

Tags: ATMA
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