The Philippine Rubber Farmers Association (PRFA) and the country’s Department of Agriculture (DA) have signed an agreement with Davao City-based Phoenix Petroleum for the development of the first-ever local manufacturer of cargo tyres.
The parties agreed to invest in the Pilipinas AgilaTyre Manufacturing Company as well as conduct a feasibility study on the establishment of a factory in Mindanao.The proposed facility is envisioned to produce up to four million rubber tyres annually for passenger vehicles, cargo, small pick-ups and agricultural machineries.
The PRFA looks to tap Filipino rubber farmers for the project, while Phoenix Petroleum will extend financial and technical assistance to farmers for the establishment of a tyre factory.
“A tyre factory in the Philippines will also mean a stable income for the country’s growing number of rubber out of the farmers,” Agriculture Secretary Emmanuel F. Piñol said, adding that this could be a “game changer” to the sector.
Last January, a Finland-based company said it is considering putting up a US$200-million facility in the Davao region that will produce tyres using locally sourced natural rubber.Black Donuts Engineering, Inc. had been invited to take look into the country’s rubber industry to see if it can be a source of natural rubber.
The US$200-million budget will be used for the construction of the facilities which is planned on a 50-hectare land in Davao. Construction is expected to take two years before operations begin.
According to the data of the Philippine Rubber Research Institute, local rubber output last year reached 110,000 metric tonnes, higher than the 100,000 MT level in 2015.
At present, Yokohama Tire Philippines, Inc. is the only manufacturer of car tyres in the country which produces around 21,000 tyres per day. It sources the bulk of its natural rubber requirement from Indonesia due to the poor quality of those produced in Mindanao.
Listed Phoenix Petroleum reported a net income of Php1.09 billion in 2016, higher by 21% compared with the previous year’s bottom line, driven by double-digit growth in fuel sales.