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Industry Roadmaps & AEC

Game Plan: Roadmap


Localization for
Competitiveness
Mallberry Suites
Cagayan de Oro City
October 13, 2016

PHILIPPINE RUBBER

INDUSTRY ROADMAP
2016-2022
PhlRubber Secretariat

PRESENTATION
FLOW
Brief Industry Outlook
Industry Challenges
Philippine Rubber Industry Action
Plan (20016-2022)

PROJECTION OF WORLD SUPPLY


and DEMAND, 2015 UP TO 2030
-1,067.31 MT
-707.65 MT
-424.40 MT
-123.80 MT

(Results during the 5th ANRPC Supply-Demand Modelling Workshop 2015 in Singapore last
Dec 14-15, 2015)

Association of Natural Rubber Producing


Countries (ANRPC) : 11 Member Countries

Governments of: Cambodia, China, India, Indonesia, Malaysia,


Papua New Guinea, Philippines, Singapore, Sri Lanka, Thailand
& Vietnam.

Natural Rubber
Consumption

Tyre producers purchase about


72% of total natural rubber placed
on the global market

NR PRICE
China has approved NewINFLUENCES
Standard for Compound Rubber
that reduces the amount of NR usage in the formula
(rubberasia.com2016)

Crude oil market is considered to have a significant


influence on NR market on account of possible substitution
between NR and SR in relation to their relative prices.
ANRPC, PRIME 2015)

Slightly slower growth in consumption is expected for three


months from August to October 2016 taking into account
post-Brexit global uncertainties and downscaled economic
scenario by International Monetary Fund (The Economics
Times Aug 2016)

Thailand, Indonesia & Malaysia agreed to cut export by 6%

IMF FORECASTS
Growth is expected to strengthen by 3.8% in
2016
Growth in advanced economies is projected to
increase from 2.1% in 2015 and 2.4% in 2016.
Growth in emerging market and developing
economies is projected to slow from 4.6% in
2014 to 4.2% in 2015 and pick up to 4.7% in
2016
Largely on account of the projected
improvement in economic conditions in a
number of distressed economies, including
Russia and some economies in the Middle East

PHIL. RUBBER
PRODUCTS

The industry consists of 4 subsectors:


Tires (car, motorcycle, bicycle)
Automotive/industrial (transmission
belts, rubber conveyor, radiator and
fuel hoses, rubber rings, gaskets,
linings, bearing pad, boots, OEM parts)
Footwear & Sports items (footwear,
sandals, tennis balls, etc.)
Latex-based products (balloons, baby
feeding nipples, medicine droppers)

PHIL NR GLOBAL
LINK
Phil. Rubber
Manufacturers

Philippine
Natural
Rubber

Tires & Nontyres

Yokohama Tire
Phil., Inc.

Export to
Other
Countries

Philippine
Market

Tires & Nontyres


(automotive
parts, etc..

Note:. Dr. R.Dy_UAP - Exports mainly cuplumps (70%) to Malaysia.

Export to
Other
Countries

Philippine Export of NR
2010-2014
FOB US $
Year

MT

2010

38,164

55,523,000.00

2011

43,331

79,920,000.00

2012

53,174

61,626,000.00

2013

69,653

72,131,000.00

2014

88,606

78,560,000.00

2015

80,496

56,843,000.00

Source: PSA, Industry & Trade Statistics Department &


UN COMTRADE Statistics - ITC Calculations, Jan 2016

1.09%

7.71%

4.06%

4.50%

4.12%

Region

Rubber Area Planted, by Region


2015

CAR

Area (Has.)

27

Cagayan Valley

203

CALABARZON

435

MIMAROPA
Central Visayas
Zambo Peninsula

1,778.25
978
89,837

Northern
Mindanao

8,776

Davao Region

8,872

SOCCSKSARGEN

60,966

CARAGA

12,450

ARMM

38,275

TOTAL
Source: PSA, July 2016

222,601.56

Volume of Production (Wet


Rubber), by Region 2015
Region
CALABARZON
MIMAROPA
Central Visayas

MT
34.71
117.69
34.19

Zambo
Peninsula

176,771.93

Northern
Mindanao

12,141.90

Davao Region

11,406.87

SOCCSKSARGEN
CARAGA
ARMM

TOTAL

126,264.18
12,006
59,359.16

398,136.
64

Philippine Rubber Industry Association


(PRIA 62 members)
3 Tire Manufacturers/Suppliers & Retreaders
17 Automotive, Industrial Parts & Sporting
Goods Manufacturers
16 Natural Rubber Processors/Traders
3 Footwear Manufacturers
3 Latex-based Product Manufacturers
17 Synthetic Rubber & Chemicals
3 Other Suppliers
NON-PRIA Members (YTPI & other Locators)

NR Processing Plants & Production


Capacity
No. of
Processing
Plants

Total Annual
Production Capacity
(DR in metric tons)

Est. Annual RM
Requirements
(Cuplumps in MT)

Zamboanga Peninsula

11

51,000

102,000

SOCCSKSARGEN

36,000

72,000

MIMAROPA

82

164

Region 7

36

72

Northern Mindanao

192

384

ARMM

4,836

9,672

CARAGA

TOTAL

30

92,146

184,292

Region

Source: Processors & DTI Regional Offices

23 Crumb Processors
7 pale crepe/Air-dried sheet processors (Village type processing facilities)

Yokohama Tire Phils., Inc


YTPI Demand
Current

Average of 2 kls
NR/tire

For 2017

7 Million
tires/year

16-17 Million tires/year

600T
tires/month

1.30 -1.40 Million


tires/month

21,000
tires/day

43,000-45,000 tires/day

42 MT per day

86 MT 92 MT per day

Yokohama Tire Phils., Inc


@ 11%-15% (2012) to 32% (2015) ----- 50% in 2016 &
2017

15%

AVERAGE RUBBER PRICE (JAN-SEPT 2016


PHP PER KILO)

INDUSTRY CHALLENGES
1) Lack of quality planting materials deterring efforts
in production expansion;
2) Low productivity due to obsolete production
technology;
3) Low quality of natural rubber non-adoption of
Philippine National Standards for NR;
4) Non-recognition of Standard Philippine Rubber
(SPR) in the international market;
5) Processors are not ISO aligned or certified (only 5
crumb rubber (CR) processors are ISO certified out
of 21 CR processors)
6) Low price of natural rubber;
7) No updated Rubber & Rubber Industry Data

INDUSTRY CHALLENGES
8) Lack of marketing research and assistance for
rubber products;
9) Lack of Promotional activities for rubber
products both in the domestic and international
markets;
10)Logistics and Tax Concerns;
11)No public/private institution or body promoting
and protecting the interest of the rubber
industry;
12)No policy in place defining the development
direction and strategy for the rubber industry

Philippine Rubber Technical Working Group


(PhlRUBBER) was responsible in crafting and
finalizing the integrated Philippine Rubber
Industry Roadmap 2016-2022

STRUCTURE
MR. ALFONSO JACK F. SANDIQUE
(CHAIRPERSON)
Department of Agriculture
Vice CHAIR (Upstream)
Department of Trade and Industry
Vice CHAIR (Downstream)

INFORMATION /
POLICY
FORMULATION
ADVOCACY
ACTION TEAM

DTI, DA,
TESDA, DOST,
DOLE, PSA,
DILG, DAR,
DENR, PRIA,
ACADEME,
LGUs, DDTK,
Private Sector,
& Other
Institutions

PRODUCTION &
PRODUCTI-VITY
IMPROVE-MENT
ACTION TEAM
DA, PSA, LGUs,
DENR, TESDA,
ACADEME, DTI,
DOST,
PRODUCERS &
PROCESSORS,
&Private Sector

Department of Trade and


Industry
SECRETARIAT
PROCESSING
& MANUFACTURING
RESURGENCE ACTION
TEAM

PRIA, DOST,
PROCESSORS,
MANUFACTURERS, DAPhilMech, DTI
& Other Private
Sector

DOMESTIC &
EXPORT
MARKETING
ACTION TEAM

DTI, DA, PRIA,


PRODUCERS,
PROCESSORS &
MANUFACTURERS, Private
Sector, & Other
Institutions

RESEARCH &
DEVELOPMENT&
EXTENSION
ACTION TEAM
DOST, DA,
PRRI,
ACADEME,
Private Sector,
& Other
Institutions

FINANCE &
INVESTMENT
ACTION TEAM

LBP, DBP, DTI,


LGUs, GFIs,

PHILIPPINE RUBBER

INDUSTRY ACTION PLAN


2016-2022

AN INCLUSIVE AND GLOBALLY


COMPETITIVE RUBBER INDUSTRY
PROVIDING SUSTAINABLE
BENEFITS TO ALL
STAKEHOLDERS

DEVELOPMENT OF A COSTCOMPETITIVE, QUALITY-DRIVEN,


SUPPLY-RELIABLE, PRODUCTDIVERSIFIED VALUE CHAIN FROM
FARMING TO RUBBER PRODUCTS
MANUFACTURING UNDER
SUSTAINABLE PRACTICES.

To increase the benefits of all


stakeholders in the rubber
industry
Spread the gains down to the
smallholders in the remote
barangays in all rubberproducing provinces in the
regions

INDICATOR AND TARGET (OUTPUT)


Indicators
Job creation
Productivity: Average
Yield per hectare per year
(DR)
* (WB Research
Data)
Farmers Income (PSA
2015-Poverty
Threshold @ PhP
9,040.00/Month )
Note:
Average Area @ 2
hectares per Farmer
Average Price of SPR
20 (Jan-August 2016)
= PhP 52.75/kilo
PhP 6,933.00 per
month
Expansion of primary
production areas
(based on the
available planting
materials : PSA 2015
Data = 222,601
hectares)
Investments in Plantation
development &
Manufacturing (PHP)
Import substitution In MT

2016

2017

2018

2019

2020

2021

2022

50,000

56,000

63,000

71,000

80,000

89,000

99,000

*800
kilos

800 kilos

800 kilos

800 kilos

800
kilos

800 kilos

800 kilos

232,601

242,601

252,601

262,601

272,601

282,601

292,601

19,991
MT

21,529
MT

23,067
MT

36.4277 B
12,072
MT

15,378
MT

16,916
MT

18,454 MT

By end of year 2022, the industry should have


achieved the following objectives:
1.Increase the income of the rubber farmers
above the Poverty Threshold;
2.Improve the current productivity of rubber
farmers from 800 kgs. up to 2,000 kgs. dry
rubber per hectare per year by fully adopting
the modern technology;
3.Support the establishment of rubber nurseries
for the targeted 10,000 hectares per year rate of
field planting;
4.Reduce import of natural rubber by 70%;
5.Increase the export volume of rubber and
rubber products by 10% annually.

1) Expansion of Production and improvement of


plantation/farm Productivity by adopting
recommended technology and good
agricultural practices;
2) Promotion of investment in Manufacturing of
rubber-based products in Mindanao resulting
in the increase of domestic consumption of
natural rubber;
3) Mainstreaming the Philippine rubber industry
in the global value chain;
4) Promote and advocate for compliance of
product standards & market requirements to
increase export of rubber & rubber producrts;

5) Intensify Research, Development and Extension


services to improve technology in production
and in manufacturing;
6) Develop industry financial services to faciliate
access to finance;
7) Establish institutional policies and information
network to ensure sustainability of assistance
and provide access to new markets and
technology.

PROGRAM
OF INTERVENTIONS

Production and
Productivity
Improvement

RESPONSIBLE
DA (PRRI, BPI, BAFS, ATI, RFOs & RFOS-Research
Division)
LGUs, USM, SUCs, TESDA, DAR, DENR-FMB,
DOST, Private Sector

Production and Productivity


Improvement
Major Programs/Projects/Activities
Establishment of additional Budwood Garden
Accreditation of nurseries and budwood
garden certification
Continuous implementation of EO 193
(National Greening Project)
Development of GAP
Techno model farms in strategic areas
Trainings and review training regulations (NC
II)

Processing and
Manufacturing Resurgence

RESPONSIBLE
DTI (BOI, BPS, PAB), DTI Enrolled Regions, PRRI,
DOST-FPRDI, PRIA, Rubber Processors, Rubber
Laboratory Testing Center, Phil. Chamber of
Furniture, USM, DA-PhilMech, DOLE

PROCESSING AND MANUFACTURING


RESURGENCE

Major Programs/Projects/Activities
Continuous harmonization/coordination of
standards
Accreditation of 3 laboratories for NR and at least 3 rubber
based products with the Philippine Accreditation Bureau (PAB)
ISO 9001 certification/alignment of at least 3 processing
plants
Continuous implementation of rubber quality improvement
program
Develop high value products from rubber wood
Promotion of the adoption of labor occupational safety
standards and practices
Global Value Chain (GVC) on rubber & rubber-based products

Domestic and Export


Marketing

RESPONSIBLE
DTI (EMB, PTTC, BOI), DTI enrolled regions) DA
(BPI, AMAS), Regional/Provincial Cluster Teams,
PRIA, DENR, LGUs, Coops and Associations

Domestic and Export Marketing


Major Programs/Projects/Activities
Conduct info session on market opportunities, Doing
Business in Free Trade Areas (DBFTA)
Participation in regional trade fairs
Campaign for the establishment of LGUs trading/
consolidation centers for NR
Production of Information and Promotion Collaterals
Conduct of investment opportunity seminars
Promotion of Rubber Products Manufacturing for the
Comprehensive Automotive Resurgence Strategy (CARS)
Program

Foreign Market Campaign on Rubber & Rubber Products

Research, Development &


Extension

RESPONSIBLE
DOST (Region9, FPRDI, PCAARRD, ITDI, PCIEERD)
Academe/SUCs (USM, WMSU, BaSC, UPLB & Others),
DA(PRRI, RFOs & ZAMPIARC) LGUs, DENR &

Research, Development and Extension


Major Programs/Projects/Activities
Nationwide clonal adaptation trial and innovation of
propagation techniques of newly introduced high-yielding
and promising rubber clones
Science and technology programs and projects
Nano sensors for rubber quality assessment
PRRI-IRRDB multi lateral clone exchange
Capability building of rubber researchers/scientists and
key industry players
Upgrading of standards of laboratory testing centers

(DOST 9, USM/PRTC and PRRI)

Finance and Investment


Promotion

RESPONSIBLE
LBP, DBP, BOI, DAR, DA, DENR, DTI, Private
Sector (Coops, Associations)

Finance and Investment Promotion


Major Programs/Projects/Activities
Rubber financing program
-establishment of nursery and budwood garden
-rubber plantation development and maintenance
-rehabilitation of plantation damaged by natural calamaties
-production inputs
-establishment of rubber wood processing facilities
-manufacturing of rubber-based products

Rubber financing program


-Inclusion to the new investment priorities plan (IPP) of BOI nursery,
rubber
plantation, processing and manufacturing
-Investment promotion of rubber and rubber based products in various
outbound missions
-Capacity building program for unorganized communities focused on
investments

Information, Policy Formulation


and Advocacy

RESPONSIBLE
PSA, DENR-FMB, DA-BAR, PRRI, DOST, PCIC, ATI,
AFIS, PRRI, PhlRUBBER, Private Sector (NGOs,
Coops, Association, BPI, LGUs, Academe

Information, Policy Formulation and


Advocacy

Major Programs/Projects/Activities

Review the existing PSA methodologies and align with


ANRPC
Re-validate the methodology of gathering
statistics/data on rubber
Update and classify rubber areas by region under the
NGP
Info campaign on quality, production, processing,
manufacturing thru brochures, industry briefer, social
media or forum
Lobby support for the passage of HB 2912 - Creation
of the Philippine Rubber Industry Devt. Board
(PhlRUBBER)
Policy request for financial institution for a longer
grace period on loans

AGREEMENT
September 13, 2016 - PCAF Rubber Industry
Devt. Sub-Committee Special Meeting, Manila
Joint Resolution between PCAF and
PhlRUBBER requesting DA Secretary to approve
the Philippine Rubber Industry Roadmap 20162022
Pledge of Commitment among Secretaries or
undersecretaries to sign the document
Upon signing the ROADMAP will be cascaded to
regional offices and other concern stakeholders
for its implementation

Thank You