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Rubber Industry

An Overview
Automotive Industry, globally, as well in India, is one of
the key sectors of the economy. The Indian Automotive
Industry comprising of the automobile and the auto
component sectors has recorded considerable growth
following the delicensing and opening up of the sector
to FDI in 1993. The unbundling of this industry from restrictive environment has, on the one hand,
helped in restructuring, absorbing new technologies, align itself to the global developments and realise
its potential with signifcant increase in industrys contribution to overall industrial growth in the country.
Due to its deep forward and backward linkages with several key segments of the economy, automotive
industry has a strong multiplier efect and acts as one of the drivers of economic growth. The well-
developed Indian automotive industry produces a wide variety of vehicles: passenger cars, light,
medium and heavy commercial vehicles, multi-utility vehicles such as jeeps, scooters, motor-cycles,
mopeds, three wheelers, tractors and other agricultural equipments etc.
It is envisaged that the opportunity landscape for the Indian auto industry would encompass
manufacture of vehicles and components for domestic sales and for exports. India would continue to
enjoy its eminent position of being the largest tractor and three wheeler manufacturer in the world and
the worlds second largest two wheeler manufacturer and would emerge as the worlds eighth/ninth
largest car producer and would retain 4th largest position in world truck manufacturing sector. Further,
by the end of decade, the automotive sector is likely to double its contribution to the countrys GDP
from current levels of 5% to 10%. It is estimated that the automotive sector requires an incremental
investment of Rs 11,000 - 12,000 crores per annum to realise its full growth potential.
Indian Auto Component industry is quite comprehensive with
around 500 firms in
the organised sector
producing practically all parts and more than 10,000
firms in small unorganised sector !he auto component sector has
been one of
the fastest growing segments of auto industry !he industry, over
the years,
developed the capability of manufacturing all components required to manufacture vehicles, which is
evident from the high levels of indigenisation achieved in the
vehicle industry as well as the components developed for the completely Indian made vehicles
"ver the last few years the Indian Auto Component Industry has created a robust capacity base and world#s
all ma$or manufacturers have set up their manufacturing unit in the country Indian auto component
manufacturing, currently constrained by lac% of large capacities, is slowly but steadily wor%ing on e&panding
capacities and automation levels !he Indian auto component industry is targeting for a bigger share of the
e&port mar%et and is in the process of ramping up its manufacturing capabilities to meet the capacity and
quality requirements !he auto component industry in India is e&pected to grow fourfold from the current
levels of '()*+ billion to over '()
110 billion by the year *0*0 and it would require an average investment of '() ,5 billion per annum
Rubber-' . Rubber
Industry (tatics
Rubber Industry
(ince the establishment of the
first rubber goods
manufacturing unit in 1/*1 at
0ol%ata, the Indian rubber
industry has maintained its
forward march, particularly
during the post.independence period It has achieved overall e&pansion through increase in the range of
products manufactured, in the number of units, in technological sophistication and self.sufficiency 1esides
catering to the entire domestic demand, the industry is brea%ing new barriers on the e&port front It pro$ects
tremendous growth in the *1st century !he factors responsible for this phenomenal e&pansion are vast
internal mar%et, rapid industrialisation, on.going economic reforms, and improved living standards of the
India is the fourth largest producer of natural rubber and second largest consumer of natural rubber2 and fifth
largest consumer of natural rubber and synthetic rubber together in the world India is the world#s largest
manufacturer of reclaim rubber India is first in productivity of natural rubber !he per capita consumption of
rubber in India is only //0 gms against / to 1+ %ilos in 3apan, '(A and 4urope !his envisages tremendous
growth prospects of the industry in the years to come
5ith around +000 units comprising ,0 large scale, ,00 medium scale and around 5+60 ((I 7 tiny sector
units, manufacturing ,5000 rubber products, employing directly -00 hundred thousand people, including
around **000 technically qualified support personnel !he Indian Rubber Industry plays a core sector role in
the Indian national economy !he industry has certain distinct advantages li%e . an e&tensive plantation
sector2 indigenous availability of the basic raw materials, li%e natural rubber, synthetic rubber, reclaim rubber,
carbon blac%, rubber chemicals, fatty acids, rayon, and nylon yarn and so on2 large domestic mar%et2
availability of cheap labour2 training facility in various technical institutes2 improved living standards of the
masses All these ground support help the Indian rubber industry to poise for an all round development and a
quantum $ump in production and technology up gradation in near future
!he wide range of rubber products manufactured by the Indian rubber industry comprises all types of heavy
duty earth moving tyres, auto tyres, tubes, automobile parts, footwear, beltings, hoses, cycle tyres and tubes,
cables and wires, camelbac%, battery bo&es, late& products, pharmaceutical goods, besides moulded and
e&truded goods for mass consumption !he products manufactured also cover hi.tech industrial items !he
important areas which the industry caters to include all the three wings of defence, civil, aviation,
aeronautics, railways, agriculture, transport as also te&tiles, engineering industries, pharmaceuticals, mines,
steel plants, ports, family planning programmes, hospitals, sports, ie practically to every conceivable field
India rubber industry is basically divided into two sectors . tyre and non.tyre !he tyre sector produces all
types of auto tyres, conventional as well as radial tyres and e&ports to advanced countries li%e '(A, 4' etc
!he non.tyre sector comprises the large, medium scale, small scale and tiny units It produces high
technology and sophisticated industrial products !he small.scale sector accounts for over 508 of production
of rubber goods in the non.tyre sector !he Indian rubber products have been e&ported to around 1/0
countries in the world including '(A, Russia, '0, 1angladesh, Italy, 9epal, :ermany, "man, ;rance, (audi
Arabia, 'A4, African countries etc and e&ports have gone up manifold
!he yardstic% to measure the growth rate of the industry is rubber consumption 1esides yearly consumption
of rubbers . natural, synthetic and reclaim, there are other raw materials li%e carbon blac%, rubber chemicals,
tyre cords, plastici<ers, process oils, <inc o&ide, stearic acid, titanium dio&ide, and other miscellaneous
chemicals which are mostly available indigenously !his apart, almost all types of ma$or rubber machinery
are being manufactured in the country
Rubber-' . Rubber Industry (tatics
Rubber Industry
Natural Rubber is produced from the crop harvested from rubber
plantations both in the latex form as well as in the feld coagulam
form. Latex is a milky white dispersion of rubber in water and
feld coagulam is the auto coagulated latex on the tapping panel
(tree lace) and the collection cups (shell scrap and cuplumps).
Both the latex and feld coagulam harvested from rubber
plantations being highly susceptible to degradation by
contamination on keeping, have to be processed into marketable
forms that will allow safe storage and marketing. The most
important forms in which natural rubber is processed and
marketed are Sheets (RSS1 to RSS5), Crepes (Pale Latex
Crepes; Estae Brown Crepes; Thin Brown Crepes; Thick Blanket Crepes; Flat Bark Crepes; Pure
Smoked Blanket crepe), Block rubber, Technically specifed (SMR, SIR, STR, ISNR), Preserved latex
concentrates. Among these forms/types, the frst three are in the dry form and almost 90% of the total
natural rubber produced in the world is at present marketed in these 3 forms. Sheet rubber and block
rubber are the dominant types of dry natural rubber available in the world market and this dominance
reduced the number of grades used in any volume to the 10-15 within these types.
In 1/0/, a team headed by ;rit< =ofmann, wor%ing at the
1ayer laboratory in 4lberfeld, :ermany, succeeded in
polymeri<ing methyl isoprene, thereby creating the first
synthetic rubber !he first rubber polymer synthesi<ed from
butadiene was created by (ergei >asil$evich ?ebedev in
1/10 @ractical synthetic rubber grew out of studies
published in 1/,0 written independently by American
5allace Carothers, Russian scientist ?ebedev, and the
:erman scientist =ermann (taudinger !hese studies led in
1/,1 to one of the first successful
synthetic rubbers, %nown as
neoprene, which was developed at
Au@ont under the direction of 40
1olton 9eoprene is highly resistant to
heat and chemicals such as oil and
gasoline, and is used in fuel hoses
and as an insulating material in
In 1/,5, :erman chemists synthesi<ed
the first of a series of synthetic rubbers
%nown as 1una rubbers !hese were
copolymers, meaning the polymers were
made up from two monomers in
alternating sequence "ne such 1una
rubber, %nown as :R( B:overnment
Rubber (tyreneC, is a copolymer of
butadiene and styrene, was the basis for
'( synthetic rubber production during
5orld 5ar II After the war, natural
rubber plantations no longer had a
stranglehold on rubber supplies,
particularly after chemists learned to
synthesi<e isoprene
(tyrene.1utadiene Rubber B:R.(C
remains the primary synthetic rubber
for the manufacture of tyres
(ynthetic rubber is any
type of artificially made
polymer material, which
acts as an elastomer An
elastomer is a material
with the mechanical Bor
materialC property that it
can undergo much more
elastic deformation under
stress, than most
materials and still return to
its previous si<e without
permanent deformation
(ynthetic rubber serves as
a substitute for natural
rubber in many cases,
especially when improved
c rubber
can be
from the
<ation of
a variety
e B*.methyl.1,,.butadieneC, 1,,.
butadiene, chloroprene B*.chloro.
1,,.butadieneC, and isobutylene
BmethylpropeneC with a small
percentage of isoprene for cross.
lin%ing !hese and other monomers
can be mi&ed in various desirable
proportions to be copolymeri<ed
for a wide range of physical,
mechanical, and chemical
properties !he monomers can be
produced pure and addition of
impurities or additives can be
controlled by design to give optimal
properties @olymeri<ation of pure
monomers can be better controlled
to give a desired proportion of cis
and trans double bonds
Rubber-' . Rubber Industr y (tatics
ISO Code Technical Name- Common Names
BIIR Bromo Isobutylene Isoprene - Bromobutyl
BR Polybutadiene
CIIR Chloro Isobutylene Isoprene - Chlorobutyl, Butyl
CR Polychloroprene - Chloroprene, Neoprene
CSM Chlorosulphonated Polyethylene - Hypalon
ECO Epichlorohydrin - ECO, Epichlorohydrin, Epichlore, Epichloridrine
EP Ethylene Propylene
EPDM Ethylene Propylene Diene Monomer - EPDM, Nordel
FKM Fluoronated Hydrocarbon - Viton, Kalrez, Fluorel
FVQM Fluoro Silicone - FVQM
HNBR Hydrogenated Nitrile Butadiene - HNBR
IR Polyisoprene - (Synthetic) Natural Rubber
IIR Isobutylene Isoprene Butyl - Butyl
MVQ Methyl Vinyl Silicone - Silicone Rubber
NBR Acrylonitrile Butadiene - NBR, Nitrile, Perbunan, Buna-N
PU Polyurethane - PU, Polyurethane
SBR Styrene Butadiene - SBR, Buna-S, GRS
SI Polysiloxane - Silicone Rubber
XNBR Acrylonitrile Butadiene Carboxy Monomer - XNBR, Carboxylated Nitrile
Rubber Industry
(ynthetic rubber is a
by.product obtained
from petroleum
Important sources are
styrene, acetylene and
butadiene !wo of the
most important types
of synthetic rubbers
are butyl rubber and
:enerally carbon blac% used in tyres
and rubber product is produced by a
process called furnace !yres and
rubber products represent the ma$or
end.use applications, accounting for
about /08 of global carbon blac%
mar%et !he growth of carbon blac%
is closely tied to the automotive
industry and the production of tyres
Consumption of carbon blac% in
tyres is e&pected to grow at a
compounded annual rate of ,+8
!he virgin carbon blac% industry is
li%ely to come under increased
pressure from governments and
environmental groups, as this
product is a significant greenhouse
gas emitter Aemand for carbon
blac% in paints, coatings and in%s
are e&pected to show upward trend
Aeveloping economies in Asia
@acific, Diddle 4ast7Africa and ?atin
America will emerge as the largest
and the most lucrative mar%ets in
the upcoming
Increasing level
of disposable
income in these
regions is
e&pected to
healthy demand
for automobiles
and other
translating into
higher demand
represents the
largest mar%et
for carbon blac%
in the world,
with a strong
hold of ,68
(ilica and other
silanes are
e&pected to
offer a serious
challenge to
carbon blac% in
the future and
are fast
emerging as
substitutes to
carbon blac% due to better performance and
environmental friendly nature !hese products
reduce rolling resistance in tyres at the same time
improve fuel efficiency, hence they are increasingly
finding usage in tyres mar%et
(teady demand from %ey end.user industries
continues to provide sustainable business options
for active carbon blac% manufacturers :rowth in
automobile demand and the subsequent increase in
tyre manufacturing provide reasonable scope for
increase in volume consumption 5ith the global
automobile industry moving east to China, India and
4astern 4urope, the tyre industry has followed, and
with it the carbon blac% producers !he large
mar%ets of China and India will post particularly
impressive gains due to a continuing rapid
e&pansion in their respective motor vehicle and tyre
industries that will be driven by robust economic
growth in both nations
There is a potential for much higher
growth for whole spectrum of rubber
industry in the domestic market due to
the fact that the current car penetration
level in India is just 7 cars per thousand.
The tyre industry accounts for about
65% of carbon black demand in India
followed by 15% in rubber products and
20% is utilized by ink, printing and other
speciality chemicals etc. Carbon black
helps in conducting heat away from the
tread and belt area of the tyre, reducing
thermal damage and increasing the
durability of the tyre.
Rubber-' . Rubber Industry (tatics
Rubber Industry
!=4 R'114R 1"ARA
The Indian Rubber Board was constituted under the Rubber (Production and Marketing) Act, 1947. This act
was passed on the recommendation of an adhoc committee appointed by the Government of India in 1945
and it came into force on 19 April 1947. The Rubber Production and Marketing (Amendment)
Act of 1954 made certain changes in the constitution of the Board and amended its name as The
Rubber Board. This act came into force on 1st August 1955. The Rubber Act was further amended by
the Rubber Amendment Act 1960 which made certain alterations in the rate and procedure of collection
of cess on rubber. It was again amended by the Rubber (Amendment) Act 1982 to enable the Central
Government to appoint a part-time Chairman/whole time Chairman for the Board and an Executive
Director on whole time basis (if considered necessary by the Central Government) to exercise such
powers and perform such duties as may be prescribed or delegated to him by the chairman. This Act
came into force on 23rd October 1982.
The Chairman who is the administrative head of the Board, exercises control over all the nine departments.
Viz. Administration, Rubber Production, Research, Rubber Processing & Product Development, Statistics &
Planning, Finance & Accounts, Training, Market Promotion and Licensing & Excise duty. Publicity & Public
Relations, Planning, Internal Audit & Vigilance Divisions function directly under the Chairman.
The functions of the Board as defned under the Act are:
1. To promote by such measures as it thinks ft the development of the rubber industry.
2. Without prejudice to the generality of the foregoing provision the measures referred to therein may
provide for:
1) Undertaking, assisting or encouraging scientifc, technological or economic research.
2) Training students in improved methods of planting, cultivation, manuring and spraying.
3) The supply of technical advice to rubber growers.
4) Improving the marketing of rubber.
5) The collection of statistics from owners of estates, dealers and manufacturers.
6) Securing better working conditions and the provision and improvement of amenities and
incentives to workers.
7) Carrying out any other duties which may be vested with the Board as per rules made under this Act.
3. It shall also be the duty of the Board:
1) To advise the Central Government on all matters relating to the development of the rubber
industry, including the import and export of rubber.
2) To advise the Central Government with regard to participation in any international conference or
scheme relating to rubber.
3) To submit to the Central Government and such other authorities as may be prescribed, half
yearly reports on its activities and the working of this act, and
4) To prepare and furnish such other reports relating to the rubber industry as may be required by
the Central Government from time to time.
!he *Eth Darch 1/5E saw the emergence of an organi<ation with a mammoth tas% ahead !hat day, Cape&il
B;ormerly, Chemicals F Allied @roducts 4&port @romotion CouncilC, started off on the mission to further
the cause of Indian e&ports of chemical based and allied products
!he prime ob$ective of Cape&il is to offer value added services to its member e&porters and to promote
their products in the international mar%ets Cape&il has always lent its creative resources for e&port
promotion strategies !hese strategies include mar%et research, participation in trade fairs and buyers
seller meets, procurement of databases and trade information, publicity drives etc
CA@4GI? acts as Heyes F ears# of the :overnment in matters of e&port of the concerned industries and
thus, contributes to the formulation of national e&port policies
Rubber-' . Rubber Industry (tatics
Performance of Rubber Industry 201112
The global economic slowdown had afected the
Indian economy and Indian economy witnessed a
swift recovery. The impact of global slowdown was
more intense on industry, particularly the
manufacturing sector. The fscal and monetary
policy interventions, however, provided the stimulus
to the economy, leading to a recovery in the GDP
growth in 2011-12.
During 2011-12 period, Indian economy grew by 6.5%,
mainly due to poor performance of the manufacturing
sector, as against 7.8% in the previous fscal. However,
economic growth, as measured by the Gross Domestic
Product (GDP), decreased to 7.8% in 2011-12 from
8% in 2009-10 due to slowdown in farm output and
construction activities and fnancial services
The growth of manufacturing sector was fairly
aligned with the overall growth of industry and as
a dominant sector; it chartered the growth of
overall industry. Indias manufacturing sector
growth during year stood at 5.1%, which is one-
third of Chinas factory output of 15% and also
lower than the world average of 6.5%, according
to a UN report.
The IIP groups the industry into three broad
sectors like mining, manufacturing and electricity.
The performance of these three sectors indicates
that the mining sector have been able to maintain
the growth at about trend rates. The rate of
wheelers were 76%, 15%, 4.5% and million tonnes as against 14.1 million
4.5% respectively. The growth rate tonnes in 2010.
recorded for domestic sales for 2011-12
was 12.24% amounting to 17,376,624 Global natural rubber consumption
vehicles. increased to 10.92 million tonnes in
The auto tyre sector registered a growth
2011 registering a growth of 1.4%
compared to 10.78 million tonnes in
of 3.7% as against 13.4% achieved 2010 due to low demand for vehicles
during 2010-11. The general rubber and tyres. Global synthetic rubber
goods sector recorded a negative growth consumption increased to 14.93
of 1.2% during 2011-12 compared to a million tonnes during 2011 from
negative growth of 1.2% registered during 14.09 million tonnes during 2010,
the previous year. According to the recording a growth of 6.0%. World
Automotive Tyre Manufacturers NR and SR consumption ratio during
Association, the average growth in tyre 2011 was 42:58.
production during the year 2011-12 was
22% compared to 13.4% in 2010-11. The Indian (cenario
truck & bus tyre production registered a Natural Rubber Production
growth of 3% during 2011-12 compared Production of natural rubber in India
to 3% achieved during 2010-11. The during 2011-12 was 903,700 tonnes
production passenger car tyre compared to 861,950 tonnes during
segments recorded 31% growth in 2011- 2010-11 and recorded a growth of 4.8%
12 as against 31% attained during 2010- compared to the previous year. The
CA!4:"RI.5I(4 @R"A'C!I"9 "; !IR4( F !'14( 2011-12 increased to
(Qty in 000 numbers) Tyres Tubes1841 kg/ha from 1806
Products 2011-12* 2010-11 2011-12* 2010-11kg/ha during 2010-11.
Truck & Bus 160857 15668 15404 14990The factors attributed
Tractor 5667 5423 2149 2006
to the growth in
Car 27141 26201 8363 9127
production were
Jeep 1595 1500 1857 1746
favourable weather LCV 6688 6029 5417 5232
Motor Cycles 44857 43118 45092 43156conditions and
Scooter+ 22195 20140 17177 16321intensive harvesting
A.D.V 293 311 166 198due to attractive price.
OTR 196 191 112 97
Industrial 681 616 100 74
Natural rubber
Total 125398 119197 95837 92947
*: provisional, +including Moped
The consumption of
(Source: Automotive Tyre Manufacturers Association) natural rubber in
of manufacturing also improved
considerably in the last two
years and has been in double
digit. Electricity sector however,
have grown more at the trends
The Automotive production data for
2011-12 shows a production growth
of 13.83% over previous year. The
industry produced 20,366,432
million vehicles of which share of
two wheelers, passenger vehicles,
and three
11. Export of tyres also
increased by
22% even though truck
& bus tyre exports
declined by 2%.
5orld Rubber
According to the
International Rubber
Study Group (IRSG),
the world natural rubber
production increased by
5.5% to 10.97 million
tonnes in
to a growth
of 7.3%
a growth
of 7.3 % to
with a
growth of
1.76% as
mption of Natural Rubber
(Qty in Tonnes) 2010-11 2011-12Gr %
Tyres & Tubes 597623 631410 5.7
General Goods 350092 333005 -4.9
Total NR 947715 9644151.76
Rubber- ' . Rubber Industry (tatics
Import & Export of NR
As per the statistics published by
the Directorate General of
Commercial Intelligence &
Statistics (DGCI&S), India has
imported 205,433 tonnes of
natural rubber during 2011-12
against the import of 190,674
tonnes during 2010-11.
Exporters have utilized the
advantage of price diferential
between domestic and international
price during the initial and terminal
months and exported 27,145
tonnes of natural rubber during
2011-12 compared to 29,851
tonnes exported during the
previous year.
The stock of natural rubber as on
31st March 2012 was at 236,275
Synthetic Rubber Production
The Synthetic rubber production
increased to 110,599 tonnes
during 2011-12 from 110,340
tonnes recorded during 2010-11,
registering a growth of 0.2% as
against a growth of 3.4% during
Synthetic Rubber
Synthetic rubber consumption
to 423,350 tonnes during 2011-12
registering a growth of 2.8% as
against 411,830 tonnes consumed
during 2010-11. The automotive tyre
sector consumed 307,365 tonnes of
synthetic rubber during 2011-12 as
against 298,414 tonnes during 2010-
11, recording a growth of 3%. The
consumption ratio of natural and
synthetic rubber in India changed to
69:31 during 2011-12 from 70:30
during 2010-11.
Consumption of Synthetic
(Qty in Tonnes) 2010-11 2011-12 Gr%
Tyres & Tubes 298414 307365
General Goods 113416 115985
Total SR 411830 423350
Consumption of NR & SR
(Qty in Tonnes) 2010-11 2011-12Gr%
Tyres & Tubes 896037 938775
General Goods 463508 448990
Total NR & SR 1359545 1387765
Import & Export of SR
Import of synthetic rubber by the
user industry during 2011-12
increased to 327,625 tonnes
compared to 302,030 tonnes
during 2010-11.
Rubber Industry
Price of Natural Rubber
During the year 2011-12, natural
rubber prices in the domestic and
international markets have been
ruling high. The surge in price was
due to tight supply, rise in crude oil
price, climatic factors, currency
movements, futures market
movements etc. Annual average
price for domestic RSS-4 grade
rubber for the year 2011-12 was Rs
208.05 per kg compared to
Rs.190.03 per kg in 2010-11.
The average international price for
RSS-3 grade was Rs.209.15 per kg
for the year 2011-12 and for the year
2010-11 the average price was
Rs.195.55 per kg.
According to Rubber Board, the
production of natural rubber for the year
2012-13 is projected at 9.42 lakh
tonnes with a growth rate of 4.2% and
the projected consumption for the year
2012-13 is 10.06 lakh tonnes with a
growth of 4.4%.
Society of Indian Automotive
Manufacturers has forecasted the sales
growth of 11-13% for the fscal 2012-
Auto Ancillary & Parts
Cable, Rubber Insulated
Carbon Black
Commerical Vehicles
Complete Tractors
Fatty Acid
Hose Pipe
Motor Cycles
Passenger Cars
Rubber Chemical
Rubber Flaps
Rubber Transmission & V BeltsRs.Crore
Rubber Tread
Scooter and Mopeds Numbers
Sports Goods, Rubber Th. Numbers
Synthetic Resins
Synthetic Rubber
Three-Wheelers Numbers
Tube, Cycle/Rickshaw
Tube, Truck
Tyre, Car/Cab
Tyre, Cycle/Rickshaw
Tyre, Jeep (Incl. Suv, Muv)
Tyre, Motor Cycle
Tyre, Tractor Front
Tyre, Tractor, Rear Numbers
Tyre, Tractor, Trailer Numbers
Tyre, Truck/Bus Th. Numbers
Utility/Multi-Purpose Vehicles Numbers
NOTE: Figures likely
to undergo change
based on factual
Rubber- ' . Rubber Industry (tatics