Rubber-based industry slowing down

BANGKOK, 9 May 2011 (NNT) – Over 30,000 workers in the rubber-based industry have been affected by the twin disasters in Japan as car tyre factories are reducing production capacity, according to the Federation of Thai Industries (FTI).

FTI Rubber Based Industry Club President Dr Chayo Trangadisaikul stated that 15 domestic car tyre manufacturers have reduced production capacity by 30-40% and cut overtime (OT) operations; thereby, over 30,000 workers in the industry are affected.

Car tyre production is slowing down after the auto industry has reduced vehicle production by 150,000 units in the second quarter this year since car factories are lacking supplies of auto parts from Japan which was struck by a massive earthquake and a deadly tsunami in March.

Dr Chayo further reported that the rubber-based industry hence could shrink by about 20% and lose approximately 900 million baht in revenue in the second quarter. He admitted that damages would be higher if the auto industry in Thailand could not resume production in the third quarter this year.

The president expected that the value of the rubber-based industry for the whole year would be around 100 billion baht, down from the value last year of 120-130 billion baht. According to him, the stagnant auto industry is tentatively the major factor of the fall since it accounts for 60% of the rubber-based industrial outputs.

Dr Chayo suggested that entrepreneurs should export para rubber and car tyre materials to other countries such as Russia, China, Brazil and India where para rubber demands are high, as well as to other ASEAN countries such as Indonesia, the Philippines, Vietnam and Myanmar.