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Shrinking domestic industry may dethrone RI as world's No. 2 rubber exporter
A variety of factors are behind the decline in the rubber industry in Indonesia, which might be left playing catch-up as the global demand for the commodity drives downstream expansion.
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A worker taps a rubber tree on Jan. 12, 2016 to collect natural rubber, also called latex, at a plantation in Pahang, outside Kuala Lumpur. (AFP/Mohd Rafsan)
T
he world is expecting expansion of the rubber industry in the near future, but Indonesia may not get a piece of the pie in the face of lagging downstream of the commodity.
The value of global rubber market is expected to reach US$51.21 billion by 2027, from $40.77 billion in 2019, due to rising demand from the automotive, construction and aerospace industries, according to a report from Fortune Business Insights.
Other factors include the expanding market for natural rubber, driven by increasing demand for tires and industrial durable goods, such as linings for petroleum and chemical tanks, as well as automotive gaskets and seals.
Aziz Pane, chairman of the Indonesian Rubber Council, told The Jakarta Post on Wednesday that Indonesia might not be able to develop its downstream rubber industry in time to seize the enormous opportunity.
“Indonesia’s rubber industry has suffered a significant decline,” Azis said, pointing to an increasing number of rubber factories that had closed in the last four years.
Read also: RI, Malaysia seeks to soften EU palm oil stance
The closures were due to declining raw materials, he explained, whereas other countries were continuing to intensify plantation expansions and downstream industry development.
