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RUBBER STAKEHOLDER NEWS : Tire industry must continue to go green, according to experts
(Last Updated: 19 Nov 2018)

 

 

Tire industry must continue to go green, according to experts

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Tire industry must continue to go green, according to experts
Sheerin

AKRON — Green business and economic practices, encompassing both manufacturing and recycling, are crucial to the continuing health and viability of the tire industry, speakers said at the recent International Tire Exhibition & Conference (ITEC).

According to Rahinda Mukhopadhyay, director of the Hari Shankar Singhania Elastomer and Tyre Research Institute in Karnataka, India, the population of the world will reach 10 billion humans by 2058.

Population growth will be especially intense in India, which will surpass  as the most populous country in the world, Mr. Mukhopadhyay said.

Along with population growth will come increased economic activity, but also wealth disparity, climate change, increasing social polarization, rising cyber-dependency and an aging population, he said.

 

Because of these factors, auto and tire manufacturers face the challenge of creating new green technologies and expanding the sustainable economy while remaining globally competitive, he said.

“The green economy means improving human well-being and social equity while significantly reducing environmental risks and ecological scarcities,” he said.

Climate change is already having a profound impact on Asia, according to Mr. Mukhopadhyay. The risks include:

  • Increasing crop failure and lower crop production;
  • Increased risk of heat-related mortality;
  • Increased river, coastal and urban flooding, with increased risk of flood-related deaths, injuries and infrastructure damage;
  • Increased water shortages in arid regions; and
  • Increased risk of water- and vector-borne diseases.

To reduce these risks, the world must adopt a green economy that turns away from fossil fuels and unbridled consumption toward a focus on saving resources rather than labor, Mr. Mukhopadhyay said.

In terms of tires, this means the development of renewable, mineral-based and recycled raw materials, he said.

“It is possible to produce a tire with more than a 95-percent non- base,” he said. “However, the application range today is still limited.”

Moving toward a green economy in the tire industry would include moving to:

  • silaca and a new generation of nano fillers from traditional carbon black;
  • natural rubber, bio-based synthetic rubber and recycled materials from traditional synthetic rubber;
  • vegetable fiber-based reinforcing materials, recycled rayon or thinner, ultra-high-tensile steel cord from polyester, nylon and steel tire cord; and
  • Moving to vegetable oils and substances compliant with the ’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulations from petroleum-derived oils and chemicals.
Tire industry must continue to go green, according to experts
Mukhopadhyay

A more sustainable vehicle fleet is also vital to achieving a green transportation economy, according to Mr. Mukhopadhyay. India is a good example, with a plan that all new  sold within its borders must be 100-percent electric by 2047, the 100th anniversary of the nation’s independence, he said.

By 2030, 40 percent of new vehicle sales and all new vehicles for intra-city transport fleets must be pure EV, he said.

“As vehicles are one of the main sources of air pollution responsible for poor urban air quality, suitable measures should be taken by all concerned to build a green, sustainable future,” he said.

The U.S. tire industry is well advanced in its efforts to achieve sustainability, according to John Sheerin, director of end-of-life tire programs for the U.S. Tire Manufacturers Association (USTMA).

Members of the trade group continue to prioritize research into the health and environmental impacts of the manufacturing and use of tires, Mr. Sheerin said, while at the same time striving to advance the safety and performance of tires and to manage scrap tires as valuable, reusable materials.

“We recognize the need to increase the use of sustainable materials,” he said. “We are increasing the use of micronized rubber powders, which closes the loop in tire manufacturing.”

USTMA members are also investigating the use of recycled carbon black from pyrolysis, orange and soybean oils instead of petroleum, bioisoprene instead of traditional synthetic rubbers and alternative sources of natural rubber such as guayule and dandelions, according to Sheerin.

The percentage of scrap tires that were recycled dropped from 2013 to 2017, to 81 from 96 percent of tires generated, Mr. Sheerin said. A slight drop in markets plus the sheer increase in scrap tires generated in those years was a major reason for this, he said.

Nevertheless, scrap tires represent one of the great success stories in recycling, the USTMA exec said.

“Only lead-acid batteries have a better recycling rate,” he said. In one sense, scrap tires have a more impressive track record than lead-acid batteries, because scrap tires on their own have a negative economic value, he said.

Tire-derived fuel remains the stalwart of scrap tire recycling, accounting for 43 percent of the 3.4 million tons of tires recycled in 2017, according to Mr. Sheerin.

The Environmental Protection Agency has recognized the biogenic content in TDF, in both the greenhouse gas reporting rule from 2010 and the emissions from stationary sources rules from both 2011 and 2014, he said.

Ground rubber accounted for 25 percent of the scrap tire market in 2017, and civil engineering projects for another 8 percent, according to Mr. Sheerin. Some 16 percent of scrap tires were landfilled — the highest level in three or four years, because of a decline in the market — and the remaining 8 percent went to various markets, he said.

“2017 was not a boom year for rubber-modified asphalt,” Sheerin said. “But we expect this year to be better, because of new road construction.”

Reducing scrap tire stockpiles is also a major success story, according to Mr. Sheerin. Since the USTMA began its scrap tire program in 1990, the number of stockpiled tires has plummeted 94 percent, to about 60 million from an estimated 1 billion, he said.

But problem spots remain in several states, either because of bankruptcies among scrap tire processors or lapsed scrap tire abatement programs, Mr. Sheerin noted.

In South Carolina, for example, the state faces the cleanup of 800,000 stockpiled tires left by a processor that went bankrupt. The state has allocated $2.7 million for cleanup, Mr. Sheerin said.

Colorado has two or three massive tire monofills that the state is required to clean up by 2024, he said.

“Texas has 17 million stockpiled tires that they know of, and I know of no plan to clean them up,” he said. “The state needs a new program.”

Two states — Louisiana and West Virginia — claim to have no stockpiled scrap tires, according to Mr. Sheerin.

“Louisiana has done the work and the cleanups,” he said. “The number of stockpiled tires is probably not zero, but the state is very environmentally aware.

“But West Virginia hasn’t done the work,” he said. “It hasn’t even looked for stockpiles.”

 

 

‘What is lost cannot be recovered; we have to look ahead’

KOCHI, SEPTEMBER 19

 

Kerala’s plantation sector is reeling under the impact of widespread damage and crop losses caused by the recent floods. However, the crisis can turn into an opportunity if future growth is channelised along ecologically sustainable and economically viable lines, says Thomas Jacob, Chairman of the Association of Planters of Kerala (APK).

Such an approach, he says, will generate employment and income. He firmly believes that this can be achieved by encouraging inter-cropping and multi-cropping, abolition of agricultural income tax and conservation of soil and water.

The biodiversity of the Western Ghats can be further strengthened if cultivation of fruit crops, bamboo and indigenous tree species known for their timber value is allowed in the plantation sector, he said in an interaction. Edited excerpts:

Will the plantation sector be the same again in terms of activities or the way growers practised farming?

Kerala’s plantation sector has a legacy of more than one-and-a-half centuries; it is perhaps the only industry in the State that withstood and re-emerged from the floods of 1924.

The industry has suffered huge losses, of which some are irreversible. It is interesting to note that the landslides reported in the plantation sector have not originated in the core plantation area.

As far as farming practices are concerned, the primary focus of growers has always been on conservation of resources like soil, water and natural flora and fauna without which the cultivation of plantation crops would not be possible.

The heavy rains and subsequent floods have steeled our resolve to conserve and strengthen resources like soil, water and biodiversity without which the sector may not be able to survive.

How have the rains/floods affected the plantation sector?

All the plantation crops have been drastically affected. The losses are three-fold — crop loss, losses to production infrastructure and losses to ancillary infrastructure.

The total estimated crop loss is above 800 crore, which may accentuate further depending on the recovery period.

The losses to production infrastructure are estimated to be approximately 450 crore and we are yet to quantify the losses to ancillary infrastructure.

If you analyse the weather reports for the last five years, it can be seen that the State had experienced drought conditions of moderate to severe nature in 2015 and 2016.

In 2015, there was deficit rainfall of 26 per cent, and in 2016, a deficit of 43 per cent. In 2018 there is already excess rainfall of over 40 per cent.

That means within a short span of five years, Kerala is experiencing extreme weather conditions, which is a tell-tale sign of climate change.

All plantation crops are extremely weather sensitive and any shift in the weather conditions can affect production and productivity.

The shift of the South-West monsoon to the excess rainfall situation has adversely affected all the crops. The tea industry has already lost 7 million kg in production.

Overall production for the current year will be 30 per cent lower. Cardamom is the worst affected crop, nearly 25 per cent of the plants have to be replaced and the production will be 50-55 per cent less.

Rubber production will be reduced by 20-25 per cent and coffee may record a deficit of 15-20 per cent.

Which are the commodities that are worst affected?

The maximum damage has been reported from the cardamom sector, especially Devikulam, Udumbanchola, Kumily, Vandiperiyar, Peermade, Elappara and Thodupuzha areas. The storm experienced in the initial phases of the monsoon has caused severe damage to yielding plants, wherein nearly 25 per cent of the yielding plants will have to be replanted.

Extensive damage has been reported to the indigenous shade trees which may take years to replenish.

The high intensity rainfall during the second phase of the monsoon has resulted in an epidemic outbreak of rhizome rot and capsule rot.

It is estimated that production will be 50-55 per cent lower compared to the previous year. The current crop loss alone could be above 400 crore, but as per the estimate, the overall season loss could be above 1,000 crore.

What kind of relief has the government provided to affected growers?

The Government has taken effective steps to rebuild the communication network and healthcare systems on a war footing basis.

As far as the relief measures are concerned, the State Level Bankers Committee has recommended a moratorium on agricultural loans for a period of 12-18 months.

The growers have reported the extent of damage to the concerned revenue authorities. As the magnitude of damages is too severe, long-term relief measures for the growers are yet to be finalised.

Is the relief adequate? Has APK suggested any other relief measures that the Government needs to take up?

APK has requested the Centre to immediately disburse already recognised and pending financial support from all the Commodity Boards to the growers.

It has also requested to declare MSP for all the plantation commodities, as per the formula adopted for cereal crops.

As the damages to production and the ancillary infra structure are too severe, it may not be possible for growers or the State Government to completely fund the reconstruction. Hence, the Association has requested the Central Government to provide a grant for reestablishing the production infrastructure and long-term soft loans for reconstruction of the ancillary infrastructure.

As there has been damage of soil conservation and water conservation facilities, it has been requested that the State extend financial support for rebuilding the same.

For bringing back the natural shade tree canopy, it was requested to provide support through the Social Forestry Scheme for planting trees indigenous to the Western Ghats.

How long do you think the plantation sector would need to get back to normal?

Damages due to the current crisis can be divided as short term as well as long term. We expect tea production to resume by mid-October to early November.

Rubber production may reach normalcy by December, as the majority of rubber trees have defoliated and it may take nearly 60-75 days for normal operations.

As far as the cardamom sector is concerned, the diseases are getting under control and remaining rounds of cardamom harvest will be over by end December/January.

However, replanting of damaged plants may not be completed this year. The black rot identified in coffee has come under control and normal operations may be started by end October.

The plantation sector has been going through severe financial crisis due to the high cost of production and low price realisation since 2012. The majority of the plantations are struggling to raise even working capital.

The extent of current damage is so severe that the plantations have neither the financial capacity nor the economic viability at this point. Moreover whatever crop is already lost, the industry will not be able to recoup.

The majority of damage to infrastructure — both production and ancillary — has created a permanent scar on the face of plantations in Kerala.

As far as the damage to production and ancillary infrastructure is concerned, the resurrection depends on availability of funds and support from the Government as the growers individually may not be able to meet the expenditure.

 
Published on September 19, 2018

 

Tyre firm margins hit as floods impacTyre firm margins hit as floods impact rubber tapping in Kerala

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Chennai: The devastating floods in Kerala have sharply impacted natural  (NR) production and will pinch the tyre industry’s raw material margins.

Tyre firm margins hit as floods impact rubber tapping in KeralaKerala accounts for more than 85% of total domestic NR production and even before the flood-related disruption there was already a shortage. According to Rajiv Budhraja, director general, Automotive  Association (), “The gap between NR production and its demand is widening and in the first quarter (April-) of current fiscal, more than 40% of the demand for NR had to be met from imports in view of domestic deficit.” With rains disrupting tapping in July and August, this deficit will only widen.
“In the month of July because of continuous rain there was very limited tapping and in August there has been virtually no production of natural rubber,” he added. “Arrivals in the market are practically nil or negligible.”

On the other hand, there has been an upsurge in demand from OEMs for commercial vehicles and tractor tyres which are both very intensive in natural rubber. Result: the gap between demand and domestic availability is widening. “The industry expects a gap of over a half a million tones during the ongoing fiscal,” added Budhraja.

For , this could mean a cost surge as they make do with imported raw material.“There has been an approximately 5% surge in domestic  but early signs of production coming back to normalcy have been encouraging.” Dittoed Satish Sharma, president, Asia Pacific, Middle East and  region, : “The overall raw material basket is going up, and we expect that it will be up nearly 5% in Q2, as compared to the first quarter,” said Anant Goenka, MD, CEAT.

 

The trouble is, the flooding may have caused medium to longer term damage to the rubber plantations.

“Each rubber tree has a life span of over 25-30 years,” said Budhraja. “So that assessment also needs to be done on a priority basis to see how natural  is affected going forward into the future.”

The good news though is that the domestic industry routinely plans for monsoon disruptions with an import-led plan B.

“During the monsoons, the production of rubber does get impacted every year. Our reliance on imports increases during the monsoons, and the same has happened this time as well. The landed cost of imported rubber, at the current level of the rupee, will not put us at a disadvantage vis-a-vis local rubber,” said Apollo’s Sharma.t rubber tapping in Kerala

 

India: Wanted, a national rubber policy

This vital sector has seen its fortunes fluctuating over the years and is in dire need of a comprehensive national policy.

 

 Rubber policy Slippery slope   –  THE HINDU

The long awaited release of the government’s first ever report on a national rubber policy (NRP) has still not come out. Apparently, differences of opinion among members of the expert committee representing various stakeholder groups had been the major reason for withholding the document for more than three years.

Meanwhile, mounting pressures from the Kerala Government and natural rubber (NR) producers’ interests led to the constitution of a task force by the government on March 22 to submit a report for the revival of rubber sector. Unfortunately, a consensus on the need for a NRP remained elusive due to the conflict of interests arising from a higher regional concentration of NR production vis-a-vis the diffused pattern of rubber consumption.

The strategic need for evolving a NRP in India stems from the unique characteristics of the sector borne out of its evolutionary dynamics over time.

The emergence of India as a major player in the world rubber economy had been unique for the interconnectedness among the segments rooted in the domestic market orientation that evolved under a protected policy regime since the early 1940s. This is in sharp contrast to the development of export-oriented ‘rubber enclaves’ in other major producing countries with the exception of China. In essence, the domestic demand-driven interconnectedness with limited exposure to export markets and external competition had been the hallmark of India’s rubber sector.

Post reforms

However, the trade policy reforms initiated since 1991-92 and the consequent exposure to foreign competition through the multilateral and RTA routes have changed the scenario. The challenges of market integration characterised by a surge in imports of rubber and rubber products are played out in the domestic market than in the export markets.

It is the unorganised smallholder rubber and non- segments that have borne the brunt of of the market integration process. The volatility of NR prices and the fluctuations in farm income have hit the conventional farm management practices including replanting.

One outcome this trend has been a steady growth in the share of senile trees (more than 50 per cent) in the total tapped area in the country. The negative growth rates in NR productivity in Kerala (- 2.8 per cent) and all India (- 2.7 per cent) between 2007-08 and 2016-17 show that the policy prescriptions have failed. Similarly, the crisis-ridden non-tyre segment has been hit by the volatile raw material prices and growth in imports. On the external trade front, a negative balance of trade of India’s rubber sector since 2007-08 has been in contrast to the positive balance of trade during the past four decades. In 2016-17, India’s negative balance of trade in rubber and rubber products was $415 million. So the segmented approach has failed in addressing the challenges of the sector.

Unlike other major NR producing countries the export intensity of India’s rubber sector had been negligible. The estimated export intensity was only 22.5 per cent even during 2014-15. Hence, sustaining a self-reliant rubber sector having applications ranging from household articles to the space programme is a major policy challenge. Nevertheless, the need for a NRP looms large in the context of market integration process sustained by the non-negotiable trade policy commitments under the multilateral and regional pacts.

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