Dawei rub­ber farm­ers rally as plan­ta­tions face clo­sure

The Myanmar Times - - Business - SU PHYO WIN su­phy­owin@mm­times.com

RUB­BER farms in Tanintharyi Re­gion are in a critical con­di­tion, as rock-bot­tom in­ter­na­tional prices for the raw ma­te­rial show no sign of ris­ing and de­mand is at an all-time low, ac­cord­ing to the re­gional chair of the Myan­mar Rub­ber Planters and Pro­duc­ers As­so­ci­a­tion (MRPPA).

As global rub­ber prices fell, the out­look for Myan­mar’s sec­ond-largest rub­ber-pro­duc­ing re­gion has be­come in­creas­ingly bleak, par­tic­u­larly as rub­ber made in Tanintharyi does not meet in­ter­na­tional qual­ity stan­dards, said the pres­i­dent of the as­so­ci­a­tion, U Yu Sein, and many plan­ta­tions face clo­sure. Myan­mar rub­ber typ­i­cally sells at a $400 per tonne dis­count to the in­ter­na­tional bench­mark.

Un­will­ing to ac­cept this fate, 20 plan­ta­tion own­ers from Dawei dis­trict have joined forces to set up a pri­vate com­pany, called Dawei Rub­ber Com­pany Limited.

They plan to build a plant with new tech­nol­ogy to pro­duce qual­ity rub­ber of an in­ter­na­tional stan­dard and cre­ate a cen­tral mar­ket, U Yu Sein said.

“We have an ini­tial in­vest­ment of K3 bil­lion and we are find­ing the land to build the pro­cess­ing fac­tory. We hope to start run­ning it this Oc­to­ber, which is the sea­son for ex­tract­ing la­tex to pro­duce rub­ber,” he said.

He wanted to set up a public com­pany so that all the small­holder rub­ber planters in the re­gion could buy shares, but the reg­u­la­tions make it hard to start a public busi­ness, he said.

The Di­rec­torate of In­vest­ment and Com­pany Ad­min­is­tra­tion raised the reg­is­tra­tion fee for public firms from K1 mil­lion to K2.5 mil­lion at the end of May. Nearly 140,000 acres of rub­ber plan­ta­tion in Dawei dis­trict is in dan­ger of go­ing out of busi­ness and daily work­ers are mi­grat­ing to Thai­land be­cause own­ers can­not af­ford to pay a daily K6000 wage, U Yu Sein said.

“We want to cre­ate a cen­tral mar­ket where lo­cal farm­ers can sell their rub­ber sheets, which we will process at the fac­tory to pro­duce a stan­dard­ised, high-qual­ity prod­uct,” he said. “All the in­vestors are lo­cal but the Overseas Hu­man Resources and In­dus­try De­vel­op­ment As­so­ci­a­tion of Ja­pan and Ja­pan’s Min­istry of Econ­omy, Trade and In­dus­try will of­fer tech­ni­cal as­sis­tance and help us ac­cess in­ter­na­tional mar­kets,” he said. With the co­op­er­a­tion of rub­ber planters, pro­duc­ers and lo­gis­tics com­pa­nies, the new busi­ness will try to con­nect lo­cal sell­ers with in­ter­na­tional buy­ers.

In the com­ing years, the gov­ern­ment plans to de­velop a cen­tral rub­ber mar­ket for the coun­try in Mawlamyine, the cap­i­tal of neigh­bour­ing Mon State, un­der the Na­tional Ex­port Strat­egy and a new law cov­er­ing the en­tire rub­ber sec­tor is be­ing drafted by the Min­istry of Com­merce, the Min­istry of Agri­cul­ture and Ir­ri­ga­tion, and the MRPPA.

U Khing Myint, sec­re­tary gen­eral of the MRPPA, said the law will be im­por­tant for every as­pect of the rub­ber in­dus­try, from the very early stages of plan­ta­tion un­til ex­port.

A cen­tral mar­ket will be cru­cial for small­holder farm­ers, al­low­ing them to sell their prod­ucts at a fair price, and it will also help im­prove qual­ity con­trol, he said. “A cen­tral mar­ket won’t make in­ter­na­tional rub­ber prices re­cover, but it can help Myan­mar pro­duc­ers to sell their rub­ber for the global mar­ket price.” The in­ter­na­tional price of Rub­ber, No 3 Smoked Sheet (RSS3) is around $1700 per tonne but the Myan­mar-made equiv­a­lent sells for around $1300.

Photo: Kaung Htet

A worker pulls apart sheets of rub­ber in Mawlamyine.

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