Malaysian rubber industry in a competitive mode

The ARTS is expected to revolutionise tapping in the country

WHEN the country shifted its focus to oil palm and natural rubber (NR) had to take a back seat, Malaysia’s ranking as the top rubber producer in Asia slipped to three notches lower, pushing Thailand to the top spot, followed by Indonesia. Although a volatile market commodity, demand for NR is gaining in the world market. But Malaysia cannot take the short route if it is to climb back to the top, except to embrace an innovative edge.


The global rubber demand is surging and along with it Malaysia is revving up its advantage as one of the leading global rubber producers, said many speakers at the recent International Rubber Technology and Economic Congress (IRTEC), held 10-11 October in Kuala Lumpur.


Synthetic rubber, having reigned as a more viable substitute for natural rubber (NR), has grown rapidly, at the expense of the NR sector, inciting price volatility that is influenced partly by domestic and global demand, said Tan Sri Bernard Giluk Dompok, Chairman of the Malaysian Rubber Board (MRB) in his opening speech. “One way to strengthen the rubber industry is through innovations in technology, which provides  opportunities to enhance the use of natural rubber for the production of new products and applications,” he said, also emphasising the importance of the industry to Malaysia’s economy.


“The natural rubber industry is one of Malaysia’s socio-economic drivers that benefits 442,510 rubber smallholders, comprising more than 1 million family members,” he added.


Pulling up productivity The country’s National Key Economic Agenda (NKEA) is undoubtedly a yardstick for the industry to hit its target within a specific time frame, in this case by 2020. To achieve its High Income nation status Malaysia has to generate a projected GNI per capita of RM48,000, according to Dr Suami Sumormo, Deputy Director-General for Policy & Operations of MRB, in his presentation.


“Malaysia must grow 6% a year to reach this GNI target,” he said, adding that the rubber industry is one of the key players in this growth. For the industry, a high rubber production can sustain growth through upstream development and revitalisation of existing downstream products, Sumormo said. “Increased rubber productivity translates to more job opportunities,” he explained, referring to the smallholders who will be benefiting from a higher income. The income of smallholders, which occupy 2.3 ha of plantations in the country, is currently RM4,000 a month.


Meanwhile, Ramesh Veloo, General Manager for Advisory Services of Tradewinds Plantation, said rubber output needs to be increased because global demand for rubber is expected to reach 31.5 million tonnes by 2020. “The healthcare sector and the rising health scares have increased the demand for high quality latex-based products such as gloves. Also, the booming transportation industry is stimulating the demand for NR, especially since 70% of consumption is coming from this sector,” he said.


Factors that affect NR output include declining plantation areas, matured untapped trees and labour shortages. Addressing the dwindling numbers of rubber planting areas, Veloo pointed out that the marginal areas were economically viable options but could prove to be more challenging.


Citing his comparative income data for oil palm versus rubber in marginal areas, the projected profit/ha of oil palm is RM5,719 against RM6,800 from rubber – an 18.9% difference in favour of rubber. “There are limited potentials for reviving rubber in Malaysia for both greenfield and brownfield development,” he said, adding, “But it can be economically viable if all the marginal land being used for oil palm can be used for planting rubber.”


However, Veloo also explained that planting of rubber in marginal areas may have lower yields, requires more labour and therefore has higher production costs. Moreover, these areas have distinct dry climates, less-than-ideal soil and hilly terrain.


Some parts of the oil palm-planted greenfield land (or undeveloped tracts used for, but not limited to, agriculture), which some farmers reserve to enhance biodiversity, may be planted with rubber, he suggested.


Currently, other Asian countries are showing potential as rubber planting territories, Veloo also said, pointing out Laos and Myanmar as potential rubber destinations for local companies. “Africa is also being eyed in view of its proximity to Europe and the US,” he said, adding that the continent is expected to reap about US$2.6 trillion collective GDP by 2020. “Also, Africa will have a working age population of 1.1 billion by 2040,” he said, highlighting the continent’s edge in the labour-intensive global rubber industry.


However, Veloo explained that the shortage of labour is a hindrance to the expansion of rubber plantations. “Compared to the oil palm sector, the rubber industry requires more workers and those who have higher skills,” he said, explaining that recruiting local workers, let alone foreigners, to work in rubber plantations is becoming difficult.


Adopting new technologies


To overcome the productivity stumbling blocks, MRB presented its newly hatched technologies to make life easier for rubber producers (and increase productivity, too).


Presenting the Automatic Rubber Tapping System (ARTS), Datuk Dr Salmiah Ahmad, Director-General of MRB, said this technology, which is in a pre-commercial trials now, was developed to primarily address labour shortages (and to reduce dependency on foreign workers) and increase output.


“Rubber tappers have to be at the plantations early in the morning when the turgor pressure is high and more latex can be tapped,” she said. A mechanised and automated device, ARTS is able to undertake the task without any human supervision.


The solar-powered device is attached to a rubber tree and at a programmed time can perform the tapping (without the presence of a field operator). The system has a rotating blade to skin the bark with precision to expose the latex vessels. It can also cut at precise depth and thickness. The tapping time is also programmable and has a short tapping length of 1 inch. A piping system is also attached at each tree to collect the latex.


The development of the ARTS is congruent to Malaysia’s NKEA’s 4-point EPP, which is to increase the average national rubber productivity to 2,000 kg/ha/year by 2020.


Currently about 2,000 units of ARTS are being used in a pre-commercial trial until the end of 2012.


Five other technologies were also highlighted at IRTEC:


1) An Android-powered smartphone application i-Klon, which is a clone-inspector application designed as an alternative as well as to augment the shortage of expert clone inspectors. The technology evaluates a clone and does an image analysis that is displayed on the phone screen.


2) Rubber Information Traceability System (RITeS), a monitoring tool to ensure the quality of the planting materials obtained by tracing their source. All private nursery operators will be required to input their product details into a barcode generating software. These barcodes, printed on special labels, will be affixed to the

planting materials. This allows enforcement personnel to easily retrieve pertinent details by scanning the labels and thus ensuring that only high-quality materials are passed on to the smallholders.


3) Automatic Rubber Nursery Machine, an automated polybag filling device that lifts the polybag using a vacuum system, and at a horizontal position is opened by gravity and an air blower. Slotted into a gripper, the polybag is rotated vertically and soil will be released into it. A rotating auger will transfer the bags from the lower chute to the upper chute and by means of an actuator will move the bags to a pallet for collection. Not only consistency of planting quality is ensured with this system, but it also increases productivity whilst lowering manpower use.


4) Automatic Planting Machine for Rubber Seedlings, which aids in planting and replanting schemes to increase productivity. Attached with an auger where a hole for planting can be created, the operator-controlled machine automates the preparation of the planting platform and dropping seedlings into them. The auger displaces soil, which produces a hole for planting. A conveyor system holds the seedlings whilst an actuator pushes the seedlings to drop into the holes.


5) Latex Collection Vehicle, consisting of a latex storage tank, an air compressor, a diaphragm pump, Teflon tubing and a carriage vehicle, to aid in increasing latex collection. As observed by MRB, smallholders collect their yield by cuplumps as it is a simpler method but with this new vehicle, productivity of collecting latex can be improved. Harvesting in latex form is important to deter dependency on imported latex, which according to the MRB data is 50% of the country’s total NR imports. Domestic consumption of latex is also high and 80% of the total rubber products export is latex-based.


Given the availability of these technologies, adoptability is an issue. In 1985, Motoray Mark II, a hand-held mechanical tapping tool was invented but adoptability was poor, said Datuk Salmiah in her presentation. “Even with the availability of new clones, smallholders are still using old clones,” she also observed.


Because the younger labour force does not seem interested in rubber tapping, older tappers do the work, exposing them to further health risks such as musculoskeletal problems, thus compounding the problem of low productivity. But Dr Salmiah agreed that it is just a matter of time before the smallholders appreciate these innovations and uitilise them.


Future of rubber industry Given the scenario at the home front, is there a future for the local industry? Yes, said the country’s former Prime Minister Tun Dr Mahathir Mohamad who delivered the inaugural address at IRTEC, adding that it is important to engage in research to innovate more applications for rubber.


However, he said that funding for research is in itself a concern. Investors, when approached for research funds would demand that a feasibility of the return of investment (ROI) be provided, which usually does not apply to research endeavours.


Aside from funding, research requires persistence, Mahathir said, explaining that success would come at the expense of failures. Nonetheless, he emphasised that without research the industry would flounder..(RJA)