Natural Rubber Procurement Intelligence

In this natural rubber procurement intelligence report, we have estimated the key cost components associated with the commodity’s production. They are raw material sourcing, labor, processing (machinery, energy, chemicals, facilities, etc.), storage and transportation, and others. Other costs may include investments in RD, compliance and testing, utilities and administrative expenses. Processing expenses are associated with converting raw latex into useable rubber products. This may include machinery, equipment, energy (fuel, electricity), chemicals (fertilizers, insecticides, processing agents, etc.), facilities (factories, processing plants, etc.), and maintenance. The cost of storage and transportation can include elements like inventory control, packing, and delivery of both raw materials and completed goods. The delivery of which can further include costs of freight, distribution, and logistical charges.

Rubber farming operations can have higher production costs due to increased freight costs for imported raw materials, including fertilizers, pesticides, and machinery. Companies in this industry follow different types of pricing models. Some of them are spot pricing, long-term contract pricing, cost plus, and market-based pricing. In the spot pricing model, natural rubber prices are determined based on present market conditions, including dynamics of supply and demand, prices, and quality requirements. This pricing method is constantly subject to change and is usually negotiated on an individual basis between buyers and sellers. Similarly, under the long-term contracts pricing model, the prices of natural rubber are based on agreements that have been established over a number of months or years between buyers and sellers. These agreements frequently have fixed or formula-based pricing mechanisms, which give both parties security and predictability.

Order your copy of the Natural Rubber category procurement intelligence report 2023-2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis

Operational Capabilities - Natural Rubber

• Geographical Service Provision - 25%
• Years in Service - 22%
• Revenue Generated - 14%
• Employee Strength - 14%
• Industries Served - 10%
• Key Certifications - 10%
• Key Clients - 5%

Functional Capabilities - Natural Rubber

Type of Natural Rubber Product

• Technically Specified Rubber (TSR) - 5%
• Ribbed Smoked Sheets (RSS) - 5%
• Concentrated Latex - 5%
• Skim Block - 5%
• Standard Thai Rubber (STR) - 5%
• Others5%

Other specifications

• Production capacity/Total output - 20%
• Available grades - 15%
• Number of manufacturing or processing facilities/factories - 10%
• Ammonia content - 10%
• Dirt content/color - 10%
• Others - 5%

Rate Benchmarking

Geographical location, supply chain dynamics, weather conditions, transportation, and labor availability play a vital factor in analyzing the rate benchmarking of the natural rubber industry. For instance, the location of rubber plantations will impact not only the transportation costs but proximity to the markets and will be vulnerable to weather conditions. In areas close to transportation hubs or ports, shipping costs may be lower for rubber plants, whereas those in remote areas might incur higher transport costs. Further, regions that have favorable climates for rubber cultivation may be more productive and less expensive to grow.

The production and cultivation of rubber can also be affected by weather conditions. This can involve changes in temperature, rainfall patterns, and the frequency of natural disasters like storms and droughts. The more effort or resources required to implement mitigation measures will hamper harvesting schedules, resulting in lower yields and increased production costs. For instance, in April 2024, Vietnam and China continued to face natural rubber manufacturing problems. Vietnam's production zones were yet to begin harvesting, while China's drought-related concerns hampered rubber-cutting efforts. As a result, natural rubber prices increased in April 2024.

On the other hand, in India, due to the scarcity of natural rubber in the global market, prices between March and May 2024 reached a record peak of USD 2.40 per kg. In India, almost 70% of natural rubber consumption comes from the tire industry. These record steep prices of raw materials bumped up their production costs. Generally, RSS4 grade of natural rubber is used in the automobile industry, the prices of which reached USD 2.16 per kg in March 2024. Crude oil price increases also caused natural rubber prices to increase in India during this period. Red sea problems (or supply chain complexities) further caused delivery delays of Indian supplies to the West, thereby negatively impacting the tire exports from India. At the end of March 2024, the global rates of sheet rubber RSS3 increased by 50% since January 2024.

Supplier Newsletter 

• In May 2024, Vietnam Rubber Group (VRG) announced it would continue to promote sustainability with a goal that 60% of its rubber area will be certified for sustainable forest management by 2030. The company also aims to achieve international sustainability certifications like VFSC, PEFC, and FSC by 2030. By implementing eco-friendly production methods, VRG minimizes waste and emissions throughout the entire supply chain.
• In March 2024, Sri Trang Group announced the launch of its new product “Traceable Natural Rubber (GPS).” The clients (or, end-use companies) will be able to 100% trace back the origin of all the natural rubber products under this product portfolio. Sri Trang has started providing EUDR-compliant rubber from May 2024 onwards to major tire manufacturers in Europe, China, South Korea and other countries. Sri Trang is fully equipped to provide all forms of EUDR rubber, such as rubber blocks, latex concentrates, rubber sheets, etc.
• In July 2023, Pirelli acquired Hevea-Tec, the largest independent natural rubber processing company in Brazil. Through this acquisition, Pirelli aims to boost its natural rubber supply in the LATAM region. In order to meet the company's goals, Pirelli will be able to launch natural rubber projects and increase the use of non-fossil-based materials in tires.

List of Key Suppliers

• Vietnam Rubber Industry Group
• Hevea-Tec (Pirelli C. S.p.A)
• Thai Hua Rubber Company Limited (Guangdong Guangken Rubber Group)
• Sri Trang Agro-Industry Plc
• Tong Thai Rubber Co., Ltd.
• Kuala Lumpur Kepong Berhad
• Thai Rubber Latex Group Public Company Limited
• Hainan Natural Rubber Industry Group Co., Ltd.
• Feltex Co., Ltd
• Enghuat Industries Limited
• Southland Holding Company
• Von Bundit Co., Ltd.

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Natural Rubber Procurement Intelligence Report Scope 

Our services include (not limited to): 

• Market Intelligence involving – market size and forecast, growth factors, and driving trends
• Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
• Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
• Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions

Brief about Pipeline by Grand View Research:

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions.