Export performance of rubber products manufacturing sector in Sri Lanka

Abstract

This paper attempts to study the performance of rubber products exports during the period, 2007 to 2012. The performance was measured using growth of total products exports and their categories. Although the rubber industry in general, has shown less growth in year 2012, the products industry showed satisfactory growth with global financial recovery. Fall in sale of vehicles is one major factor caused decline in demand for tyres and tubes which accounted for 57% of Natural Rubber (NR) consumption globally. Average annual growth of Sri Lankan rubber export earnings decreased by 15% in year 2012 which can be attributed to 2% reduction in world rubber consumption. Dry rubber based products had an export value share of 78% while latex based rubber products had a share of 22%. Out of the latex based rubber products, industrial and surgical gloves have a share of 99 %. Solid tyre sector earned US $ 331 million in 2012 and was the largest contributor in tyre sector in the last 6 years. USA is the largest importer of solid tyre from Sri Lanka while Belgium, Germany and Italy are the other major importers of solid tyres. There will be a strong growth in original equipment and replacement tyre sales as a result of increased vehicle production in the future. Replacement car tyre sales are expected to move from 786 million units in 2012 to 1.3 billion units by 2022. The value added rubber products give high foreign earnings per metric ton than raw rubber export earnings. Hence, the industry should pay more attention to encourage export of more value added rubber products than raw rubber.