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28. August 2006

THAILAND: Tyre firm to cut use of rubber

Source: Daily "Bangkok Post", Bangkok; 28 Aug 2006

Intermediate and downstream industries are likely to
use less natural rubber in the future due to soaring
rubber costs and rising environmental concerns, a
leading tyre manufacturer has warned.

Prayong Hiranyawanich, the president of Michelin Siam
Co, said his company was studying ways of reducing the
amount of natural rubber in tyres.

He said any reduction would slash rising rubber costs,
lighten the weight of tyres and prevent used-tyre

Each year, about 135,000 tonnes of old tyres are
disposed of in Thailand, which produces about 20
million of new tyres every year.

Michelin is studying tyre-replacement chemicals and
ways to lighten loads.

He said the development could affect Thailand's rubber
industry and suggested that the government start
preparing for any adverse effects.

The domestic price of rubber this year was estimated
at 76 baht per kilogramme on average, a rise of 38%
year-on-year, while the world price was projected at
US$1,637 a tonne, up nearly 40% from the year before,
according to a study by the International Trade
Studies Centre of the Thai Chamber of Commerce.

The director of the centre, Aat Pisanwanich, said
prices could jump to 82 baht per kg in 2011, in line
with the world market, in which rubber was expected to
sell for at least $2,100 per tonne, following
continually high demand.

Based on the study, world production is expected to be
13 million tonnes in 2011, up from 8.6 million tonnes
in 2005, while demand is expected to be 9.5 million
tonnes, up from 8.7 million last year.

Projected rubber output in Thailand in 2011 is
expected to be 4.14 million tonnes, up from an
estimated three million tonnes this year with about
90% of that exported.

Domestic demand was expected to be between 457,000 and
476,000 tonnes per year over the next five years, up
from the 342,000 tonnes expected this year.

Mr Aat said continous high demand from China and
domestic expansion in the car industry in Thailand
were factors behind rising demand.

(Syed Rashid Ali, Karachi, Pakistan)

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