IRSG: Challenges beget opportunities; technology disruption sires innovations

SalvatoreVarious industries that are reliant on high performance and quality rubbers are advancing at a past pace.Today, opportunities and challenges alike are shaping up innovations in leading industries such as automotive and tyres. These current challenges and prospective opportunities, among other relevant issues and topics will be tackled at the upcoming World Rubber Summit (WRS) to be held  7-8 May 2018 in Colombo, Sri Lanka with the theme, Breaking Barriers towards Sustainable Growth.

Organised by the Singapore-headquartered International Rubber Study Group (IRSG), in collaboration with the Ministry of Plantation Industries of the Government of Sri Lanka, WRS 2018 lays bare major developments impacting the global rubber industry, including the disruptive trends that are transforming the automotive industry and the extensive use of innovative solutions to improve rubber quality and productivity.

In this exclusive interview by Rubber Journal Asia (RJA), IRSG’s Secretary-General Salvatore Pinizzotto expounds on the emerging challenges, trends and opportunities in the automotive and allied industries.

RJA: What are the current “disruptive trends” in the rubber industry? And which of these trends are “transforming” and benefitting the automotive industry?

Pinizzotto: Technology disruption necessitates the implementation of new changes and innovations over time and for longer-term efficiency gains. Current disruptive technologies such as robotics, artificial intelligence, virtual reality, 3D printing, and the Internet of things (Industry 4.0) are impacting new business models, and are applicable to the rubber and automotive industry too.

The automotive industry will undergo a profound transformation and its potential impacts to transportation mode and environment, and its effects on energy and cost saving in the long-run is a strategic game change.

The future of mobility is connected autonomous electric vehicle fleet including shifts in vehicle ownership. Instead of individual traditional ownership, shared mobility platforms offer access to variety of vehicles. Passenger car OEMS are investing in technology as well as ride sharing platforms. Sharing mobility and transport data are helpful to develop better business models to raise productivity. Intelligent and powerful software is the key element in the future tyre industry.  Tyres will communicate with the control system of an autonomous vehicle, sensing road and weather conditions and adapting to them. As the mobility landscape changes with the adoption of the disruptive transformations, there is a call for a closer partnership in the ecosystem to move forward. There will be changes in tyre requirements and the future tyre will be customised tyres.

RJA: Consumption growth has always been attributed to Asia (particularly China); how does the changing economic climate in the region, eg, Asian currencies getting weaker, and implementation of trade policies such as the One Belt One Road in China and the South Asian Economic Cooperation (SASEC), etc,  affect the consumption growth outlook in the region?

Pinizzotto: Asia consumes around 64% rubber produced and 1/3rd of the global rubber usage has been attributed by China. World economy is evolving and new trend are shaping the world with the shift in economic activities towards emerging markets like China.

China is shifting its growth pattern from a robust growth to that of a moderate and sustained pattern with the focus on consumption growth than investment. The rebalancing of economic activities in China with a slowdown expected in the future years will have spill over to other economies. China’s rubber consumption is expected to grow by 3.7% during the next five year period (2018-22). Economic cooperation and trade policies such as the One Belt One Road in China and the South Asian Economic Cooperation (SASEC) encouraging new investments will keep a sustained growth in rubber usage in China.

RJA: What is new on the Sustainable Natural Rubber Initiative – where are we now in terms of sustainability in rubber?

Pinizzotto: The Sustainable Natural Rubber Initiative (SNR-i) was developed under the frame-work of the IRSG as a voluntary and collaborative industry initiative to promote the sustainability of the natural rubber value chain. So far SNR-i has seen 48 companies/organisations completing the self-declaration process. The self-declared registrants as leading industry players’ accounts for around 50% of the global processed and consumed volume.

RJA: What is your outlook for natural and synthetic rubbers (Europe, Asia, ROW) for the next 3-5 years?

Pinizzotto: The world total rubber consumption is forecast to increase by 2.7% for the next 5 year period (2018-22). Total rubber consumption in Asia is forecast to increase by 3.2% whilst Europe’s total rubber consumption is forecast to be up 1.8% and others by 1.5% during the next 5 year period.

RJA: Any upcoming activities and plans of IRSG and how do you think can IRSG and the WRS2018 equip industries to become more efficient and more responsive to these new trends?

Pinizzotto: IRSG is the global platform of the rubber sector as it includes among its members natural and synthetic rubber producers, processors, traders, financial institutions, and R&D organisations alongside the IRSG Member Governments. This year’s World Rubber Summit in Sri Lanka is designed to address broader strategic policy-led issues which impact the rubber sector. This year theme is “Breaking Barriers towards Sustainable Growth” represents the need of an open willingness to cooperate and collaborate among the rubber value chain stakeholders, enhancing cooperation between rubber players and organisations, was one of the takeaway of the Summit held in 2017. The aim of this year’s Summit is to reinforce the concept that only through a constructive dialogue among the stakeholders in the rubber sector it will be possible to guarantee a sustainable growth for the benefit of the future generations. The rubber industry needs a global multi-stakeholders platform where the topic of the sustainability of natural rubber is brought forward and I am sure that the World Rubber Summit 2018 will greatly contribute to achieve this goal.