Black Donuts mulls tire factory in Davao region

A FINLAND-BASED company is considering putting up a $200-million facility in the Davao region that will produce tires using locally sourced natural rubber.

Black Donuts Engineering, Inc. has been invited to take look into the country’s rubber industry to see if it can be a source of natural rubber for its operations. Company executives will be in Davao this week to visit various rubber plantations.

“They will take a look at the rubber industry in the Philippines and determine whether it is feasible to put up their tire factory so we will no longer be dependent on the tire world market price,” Agriculture Secretary Emmanuel F. Piñol said in an interview on Tuesday.

The company, which has partnered with businesses in parts of Europe, Africa, China, Indonesia, Thailand and India, has expertise in plant technology, raw material development, and tire testing.

Black Donuts is eyeing Davao region for its expansion due to the area’s accessibility to seaports and airports.

Black Donuts President and Chief Executive Officer Kai Hauvala said the growing demand for automobiles, particularly in Southeast Asia, makes the Philippines a viable market.

“[With] the growth of the vehicle sales in Southeast Asia and (economy’s) growth rate, as well, it’s the right place. A good example already is there are plants located in the Philippines,” Mr. Hauvala said in an interview.

Mr. Piñol expressed confidence the company will push through with the project.

“The moment they say it’s a go, we’ll sign the MoA (memorandum of agreement) right away, we’ll start organizing the farmers,” said Mr. Piñol.

Should the project materialize, the DA will act a facilitator for the company and tap cooperatives that can commit to producing Black Donuts’ rubber requirements.

The $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.

Black Donuts targets to produce 4 million vehicle tires annually from the Philippines if the project pushes through. This translates to an annual demand of 16,000 metric tons of rubber. —