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Need to import rubber to maintain domestic manufacturing, says Atma’s Rajiv Budhraja

The Automobile Tire Manufacturers Association (ATMA) on Tuesday asked the government to allow free imports of natural rubber to the extent of a projected supply-demand gap of 4.4 lakh tonnes.

The domestic deficit for fiscal 22, which was expected to account for 45 percent of production at 3.4 lakh metric tons (MT) at the start of the year, is now expected to reach 55 percent of production at a “massive” of. 4.4 lakh MT, ATMA said citing figures from the Rubber Board of India.

In a letter to the Union Minister of Trade and Industry, ATMA said: “A severe shortage of NR (natural rubber) is negatively disrupting production processes in tire manufacturing units, even as the tire demand peaked.

Stating that the scarcity of natural rubber during peak production season in Kerala is unprecedented, ATMA said that does not bode well for the tire industry value chain.

Speaking to CNBC-TV18 Rajiv Budhraja, Managing Director of ATMA, said: “The tire industries’ cup of woes, which was already full, is now overflowing due to the natural rubber availability situation.

According to him, it is a record that over the past two decades, during the peak production season, which usually runs from September to February, the industry has never seen a position as bad as this. . It is a historical landmark, so to speak, that despite being in the middle of the peak production season, there are no arrivals of rubber on the market, a- he said and called the situation unprecedented, extremely difficult and very worrying for the tire industry. .

“Usually during peak months, production is… last year, at the peak, it was almost 75,000 to 87,000 tonnes, this year we are not expecting half of that. Production could be in the order of Rs 40,000 to 45,000 tonnes, ”said Budhraja.

Commenting on the imports, he said: “We expect a deficit of between 5.50 and 6 lakh tonnes of rubber, which will have to be imported. There is no other way than to import to maintain domestic manufacturing. “

He added that on the consumer front, the tire industry is doing well. Consistently, there has been a lakh per ton of consumption per month for the past six months, but production has lagged behind, he said.

“The tire industry is greedy in raw materials. 70 percent is the component of the raw material and of that 40 percent would be natural rubber. It is therefore the most important and critical raw material for the tire industry, ”he said.

Regarding factors affecting rubber production, Budhraja said, “The reason would be Kerala. First of all, it experienced a long period of COVID, we saw a very prolonged period, during which the pandemic prevailed there, which prevented the exploitation of rubber and its arrival on the market. Subsequently, in an unprecedented situation, it was two successive cyclones, which somehow had an impact on the weather conditions in Kerala. “

He also highlighted the challenge posed by recent unexpected rains in the southern state which continued until November 24.

Demand for rubber has been very healthy and positive and the tire industry has performed very well in terms of exports this year. “Exports have increased by almost 70% over last year and have consistently hit double digits over the past four to five years. The export performance has therefore been very strong, ”said Budhraja.

For the full interview, watch the accompanying video …

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