Rubber processors mull plants in Indonesia

KOCHI: The Indian rubber industry is warming up to the idea of setting up manufacturing units in Indonesia and Sri Lanka encouraged by friendly government policies, greater availability of natural rubber and cheap labour. The interest has been triggered by the recent visit of Dickey Fabrian, consul general of Indonesia, the second largest rubber producer, who expressed his eagerness to enhance the bilateral trade in rubber goods.

Earlier, the Indonesian government’s policies did not favour investment by foreigners while land prices were exorbitantly high for outsiders willing to invest in the country. But now with Indonesia inviting investment in rubber plantations through land lease, there is a great scope for setting up units producing gloves, balloons and condoms. The idea is to set up 100% export-oriented units with value-addition. “It is a winwin situation for both countries,’’ said Niraj Thakkar, senior vice president of All India Rubber Industries Association.

At a time when the domestic rubber industry is bearing with high import duty on raw materials, inadequate supply of natural rubber and exorbitant wages, this looks an attractive option . Indonesia can gain from India’s expertise in the production of rubber components and other latex products. Sri Lanka, too, is looking at inviting Indian rubber goods manufacturers to set up units, he said. Investor-friendly policies will also prod Indian tyre makers to pump money into Indonesia, which was off the radar all these years. The tyre industry had been looking at investment in plantations in Laos, Cambodia and Africa mostly, said Rajiv Budhraja, director general of Automotive Tyre Manufacturers’ Association.