LETTERS: The Rubber Research Institute of Malaysia (RRIM) has enjoyed the kind of stature seldom experienced by an agency from a small developing country.
But the rubber industry is now a pale shadow of that greatness.
Recent years have seen misfortune piling up, especially in the upstream and midstream sectors. Production has been declining. The depressed rubber prices, which stagnated for several years, was much to blame.
This was exacerbated by the struggle to secure enough harvesting labour. The fact that big plantation companies moved away from rubber cultivation was another factor to rubber's decline.
A study revealed that owners of rubber smallholdings are no longer full-time farmers.
They also rely on external labour. It is no surprise that less than 400,000ha of the one million hectares cultivated are tapped. Most are collected as cup lumps.
Such production decline has impacted the midstream rubber processing business. Many have closed down. Some have shifted to Thailand, Vietnam and Indonesia.
Those which stay operational have to import cup lumps from as far away as Africa. But with the recent announcement by the Ivory Coast to stop exports, that supply source has shrunk.
Many rubber factories now operate at below capacity. It is much worse for the latex concentrate factories. The country's big glove factories, which enjoyed bumper business during the Covid-19 pandemic, had to rely on imports.
With the recent expansion in China's glove business, our glove companies are pressured. Goodyear, a multinational tyre maker, has recently exited the country because of raw material issues.
The current surge in the rubber price to RM4 a kg is a welcome relief. But some analysts are not optimistic that the price can be sustained.
Even if the price can be sustained, our struggle to obtain enough labour will not guarantee the necessary pick up in production.
What we need is a new business model less dependent on cheap labour but which can still be lucrative to the overall industry.
We need one that will attract the big plantation companies. Smallholders should complement not dominate the sector.
It is a known fact that the revenue from natural rubber (NR) cultivation can come from latex and timber. So far, the primary focus has been on latex. Little attention has been paid to rubberwood.
Most of the time, it is treated as incidental. Even the research has been focused on maximising latex not the wood. The pressure to rethink the business model cannot but shift our attention to now look at timber as the primary product and latex as the secondary output.
A recent conversation with the Deputy Head of Mission at the Swedish Embassy has shed new light on the potential of reviving our timber business. If we can do that with the rubber tree, that would be a double bonus.
In Sweden, it takes 80 years before they can harvest their timber. Yet they are among the world's top exporters of timber products. In the case of rubber, experts say we can harvest as early as 15 years using the right timber clones.
The right incentives must be put in place to attract big companies. With the recent foray of timber aggressively entering the construction business, there is no reason why investors will not be attracted.
In the EU, efforts are underway to increase the use of timber to replace high emission concrete made possible through new timber adhesive technologies including Cross Laminated Timber (CLT) and GLUELAM Timber.
Through such a business model, we can not only bring back the glory of the once flourishing timber trade but also inject new vigour in the natural rubber business.
PROF DATUK DR AHMAD IBRAHIM
Tan Sri Omar Centre for STI Policy, UCSI University
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times