KOCHI, MARCH 14: The steep fall in prices of natural rubber during the past few months has cast a shadow over the future of crumb rubber-manufacturing units in the country. Industry sources said due to fall in prices and increasing cost of production most of the factories are closing shops or planning to do so soon. There are 52 crumb-rubber factories operating in the country, a majority of which are located in Kerala.According to a Kochi-based crumb-rubber manufacturer, the cost of production has gone up considerably during the past couple of months while there is a sharp fall in the offtake of finished products. Most of the factories are now operating in less than 50 per cent of their capacity, he said.The industry has an installed capacity of of 1,17,300 tonnes, while in the current year the total production was only 51,960 tonnes, Indian Crumb Rubber Processors Association president KA Abraham said.While overseas tyre companies use 80 per cent of crumb rubber for manufacturing purposes, few tyrecompanies in the country do the same. The use of crumb rubber is mainly confined to the manufacture of cycle tyres, tubes, and rubber chappals.Crumb rubber, in the country, are graded as technically-specified rubber (TSR), Indian standard natural rubber (ISNR), and block rubber (BR). Crumb rubber manufacturing began in 1974, as it has led to increased revenue for the growers and also helped to improve the quality of sheet rubber. The Rubber Board has also encouraged the processing of crumb rubber by giving subsidy to various units. Crumb rubber is priced between the RSS-4 graded rubber and superior grade. The processing expenditure for crumb rubber is estimated to be between Rs 4.50 and Rs 5. In 1996 crumb rubber used to fetch an average price of Rs 50 per kg, while scrap rubber with 80 per cent dry rubber content (DRC) fetched Rs 44.10.Now the price of scrap has come down to Rs 18, which makes a processing cost of Rs 27.50 for crumb rubber.The exiting market price is estimated to be Rs 26, while theraw material cost is estimated to be Rs 23.48. The situation is that we are not even able to meet the processing cost, a manufacturer said. He said the cost of electricity, diesel and the wages had increased during the period, making the survival of the factories extremely difficult.
