Export Potential of Natural Rubber from Sri Lanka

Sri Lanka pioneered the Asian rubber industry in 1876 with the planting of 1919 rubber seedlings in the famed Henarathgoda botanical garden in Gampaha. Today, Sri Lanka caters to 50% or even less of the demand due to a plethora of factors. With about 136,625 hectares of rubber plantations and more than 200,000 strong workforces, Sri Lanka is currently identified as the 13th largest rubber producer in the world.

What makes Sri Lankan Rubber Special?

First and foremost, Sri Lanka is the world’s leading manufacturer and exporter of the highest quality of natural rubber latex crepe rubber, which is considered the finest rubber that results in the industry having a telling competitive edge in fetching a premium price over the rubber products of all the other types and grades.

One of the premium quality natural rubber types manufactured in the country is known as Lankaprene. Due to its properties such as being odour free, being light-coloured and clean, it is widely used for medical equipment and upmarket value-added products locally and globally. Secondly, with the availability of high quality ribbed smoked sheet rubber (RSS Rubber), the expertise and the experience of the people in the industry, Sri Lanka has become a global hub for solid tyres in the international market.

Also, the world now sees rubber product manufacturers based in Sri Lanka catering to the globally rising demand for rubber gloves that became an essential PPE owing to the ongoing Covid-19 pandemic. It’s the availability of superior latex crepe that has made it possible.

According to the Sri Lanka Association of Manufacturers and Exporters of Rubber Industry (SLAMERP), the rubber industry is picking up after being adversely affected by Covid-19 last year. While the growth of the hand protection or the rubber gloves industry is clear, SLAMERP is positive that the tyre industry too will follow suit.

The Scale of Sri Lanka’s Rubber Product Manufacturing Industry 

70% of natural rubber production in Sri Lanka is utilised by the rubber products manufacturing sector for local sales or predominantly for the lucrative export market. Even so, as mentioned above Sri Lanka is only capable of producing 50% or less of the demand which leads to 50% of raw materials getting imported by other countries to meet the demand by the local manufacturers.

By now, Sri Lanka exports rubber and rubber-based products to the US, Germany, Belgium, Italy, and the UK and also exports semi-processed natural rubber to Pakistan, Malaysia, India, Japan, and Germany.

Some measures to develop the rubber and rubber products industry in Sri Lanka

• Enhancing the yield per tree
• Introducing the enhanced rubber varieties offering a higher yield
• Expand rubber plantations
• Build a skilled employee base to cater to the industry’s growing demand
• Increase value addition 
• Initiate a new rubber investment and draw in foreign investments, advance technologies, and expertise

The Global Rubber Market 

According to Fortune Business Insights, the global rubber market was estimated to be worth US$40.77 billion in 2019 and it is projected to reach US$51.21 billion by 2027, exhibiting a CAGR of 5.3% during the forecast period. From a global perspective, Rubber is dominantly used as a raw material in the automotive end-use industry for the production of a wide variety of products such as tires, crap tubes, adhesives, hoses, pipes, gaskets, and roll coverings. The increasing demand for tire and non-tire automotive parts is expected to influence market growth.

It's further used in diverse applications such as footwear, industrial goods, construction, textiles and other consumer products. The amalgamation of rubber in footwear gives protection from water, chemicals, electricity, impact and low temperatures. It's also used in a variety of consumer products such as protective covers, mats and others. The growing usage of rubber in textiles and industrial goods is expected to serve as a driving force for the growth of the market. Sri Lankan rubber product exporters have to pay close attention to the global market drivers in the rubber industry and invent solutions and ramp up the production of what’s in demand. If we play this right, we stand to gain a lot from this. But this takes a concerted effort and a holistic strategy.

The Growth Potential for Rubber & Rubber Product Exporters 

The rubber industry in Sri Lanka has the potential to increase the country’s export earnings both in the short to medium and the long term. In the long-term in particular Sri Lanka enjoys a competitive edge in its ability to manufacture grades of rubber, which are not produced by other countries. The unique properties of rubber produced by Sri Lanka (for instance, Sri Lanka is the only producer in the world of Latex Crepe and Sole Crepe grades which is the purest form of natural rubber) further bolsters the country’s proposition. Further, Sri Lanka is also the largest exporter of industrial solid tyres and the fifth largest exporter of surgical / examination latex gloves in the world. To achieve the ambitious multi-billion dollar growth targets, however, cohesive action and support by the policymakers as well as the other stakeholders is a prerequisite. The projected growth of the global rubber industry certainly favours us here.