Thailand: Rubber estate taking shape
The Industrial Estate Authority of Thailand (IEAT) is teaming up with Tribeca Enterprise Co to jointly develop a 2,442- rai rubber estate in Rayong to start operating in January.
The 3.24-billion-baht Luckchai Estate, the IEAT’s 46th site, will support development of downstream rubber clusters. Tribeca is the estate’s sole investor but it is open to bringing in a partner with a maximum shareholding of 25%.
The company is currently conducting an environmental impact assessment for submission to the Office of Natural Resources and Environmental Policy and Planning in November.
Luckchai Kittipol, a rubber industry veteran who sits on the Tribeca board, said the group had approached 10 potential customers to occupy a combined 1,000 rai. It expects to sell all the land at the estate within two years, he said. Luckchai Estate will also feature a rubber research and development facility with investment by theChinese government.
China consumes a third of the world’s rubber supply and wants to move closer to the raw material source, said Dr Luckchai, who is also the chief executive of Thai Hua Rubber Plc, one of the country’s largest rubber producers and exporters.Thai Hua has joined China’s largest tyre producer, Hangzhou Zhongce Rubber, to plant rubber on 300 rai in Luckchai Estate with investment privileges from the Board of Investment.
The Thai company will own 15% of the joint venture, while the plantation will supply 30,000 tonnes of latex annually for tyre production at a 5-billion-baht factory.
Initial annual production will be a million passenger car tyres and 300,000 ten-wheel-truck tyres, with output tripling in the third year.
“Thailand is the world’s top producer of rubber, but only foreign businesses produce downstream products,” said Dr Luckchai, who is also president of the Thai Rubber Association.
He said strong demand for rubber would persist if the US and European economies encounter no further problems. Prices of rubber sheet are currently around 130 baht a kilogramme, up by 30% from last year. Thailand’s 17 million rai of rubber plantations will produce 3.4 million tonnes this year, up from 3.2 million last year. Worldwide demand is forecast at 11 million tonnes this year and is expected to rise by 5% next year.