Despite the tremendous devastation and loss of life caused by the Dec. 26 earthquake and tsunamis in the Indian Ocean basin, the numerous rubber operations and plantations in the region appear to have escaped relatively unscathed.
The tsunamis inundated portions of Indonesia, Sri Lanka, Thailand, India, Malaysia, Maldives and even some nations in faraway Africa-regions where the rubber industry has many manufacturing facilities and sources the vast majority of its natural rubber (NR).
Yet those firms contacted reported little or no harm to their employees and property, and no trouble so far obtaining NR-though infrastructure damage may take its toll in the coming months, sources said.
Reports indicate that most NR plantings weren't affected much by the tsunamis. ``Most of the natural rubber production areas in Indonesia are far enough inland that they weren't damaged,'' said one rubber industry executive who asked to remain anonymous.
A more crucial question is the damage to the region's infrastructure-including port facilities, railways and roads-but so far this has not affected NR supplies or their passage, sources said.
There are ample amounts of Standard Indonesian Rubber 20-the natural rubber grade most often used by U.S. tire makers-available for shipment, said Whitney Luckett, vice president of sales and marketing with RCMA Americas Inc. Also, the main Sumatran ports for NR, such as Medan, suffered little or no damage in the tsunami, she said.
Even the port facilities at Phuket Island in Thailand, which suffered terrible damage and loss of life, were relatively unaffected because those facilities are on the other side of the island from where the tsunami hit, according to Ms. Luckett.
Problems may arise, however, from the devastation of the port of Banda Aceh in northern Sumatra, the area closest to the earthquake's epicenter. ``Banda Aceh did not have a lot of rubber factories, but it was a source of cup lump and other raw materials to the factories in northern Sumatra,'' she said.
An e-mail newsletter from RCMA Commodities Asia, the parent company of RCMA Americas, noted that it is too early to predict how the tsunami will affect NR shipments. Besides being a major NR port, it noted that Medan also is the main port of import for aid to Banda Aceh.
Another rubber trade source, who asked to remain anonymous, said he had heard that some factory and dock workers in Medan came from nearby areas that were hard hit by the tsunami. ``They went home to help their families, and that shut down at least one factory, though others are still operating,'' he said.
Meanwhile, prices for SIR 20 have held amazingly steady, ranging around 53 cents per pound in the several days after the disaster. ``When I first heard about the tsunami, I thought that sentiment alone would push prices up to whatever,'' the trade source said.
Tire manufacturers with facilities in India, Malaysia, Indonesia, Sri Lanka and Thailand similarly reported little or no disruption of operations in those areas.
Bridgestone Corp. in Tokyo, for example, reported there were no casualties among its nearly 15,000 employees in the region, and no damage or work interruptions among its considerable holdings there. These include three tire plants in Thailand, two tire plants in Indonesia, a tire plant in India, several diversified products plants in Thailand and Malaysia, and two natural rubber estates in Indonesia, including one recently purchased from Goodyear.
Goodyear and Group Michelin also reported that their Asian holdings and employees were spared. Swedish industrial tire maker Trelleborg A.B. said that while it was still gathering information, it understood that none of its 800 employees at plants in Kelaniya and Malwana, Sri Lanka, was among the dead or missing. Those plants are intact and operational, Trelleborg added.
Officials from the embassies of Indonesia, Malaysia, Sri Lanka and Thailand could not be reached for comment on the situation in their countries.
What the tsunami damage will mean to NR-producing countries-particularly Indonesia, which recently announced its intention to make itself the world's largest NR producer in the next several years-still is unclear. It may, however, give Vietnam, the world's fastest-expanding NR exporter, a foot in the door for further expansion.
Vietnam, according to Asian sources, now ranks fourth among NR-exporting nations and third in latex exports. In 2003 it produced about 250,000 tons of rubber and exported about $446 million worth.