SINGAPORE — Sumitomo Rubber Industries Ltd. (SRI) has launched a natural rubber procurement subsidiary in Singapore with the aim of ensuring "a more stable supply of high quality natural rubber."
Set up with a capital of $18 million, Sumitomo Rubber Singapore will be headed by Yoshiaki Yasuda and will start operations in April, SRI said.
Until now, the NR Division of the company's tire sales subsidiary in Singapore, Sumitomo Rubber Asia (Tyre), handled the procurement of the raw material for Kobe, Japan-based SRI.
Sumitomo cited an anticipated decline in the production of natural rubber in major Asian producing nations as one of the reasons behind the decision to set up a procurement system led by a local unit.
In addition, the Japanese tire and rubber products company stated that the business environment was undergoing "a series of major changes that pose various challenges."
These, it said, could include mergers and market withdrawals within the NR industry which it said could create greater risks of monopolies, price fluctuations and other potential issues in various markets.
The Singapore unit also will handle SRI's sustainability efforts regarding NR, including the company's contributions to the Global Platform for Sustainable Natural Rubber (GPSNR).
SRI was a founding member of GPSNR, which was launched in October 2018 as a multi-stakeholder platform to address sustainability issues such as human rights and deforestation across the natural rubber value chain.