Tyre industry’s Rs 1,100-crore project to plant rubber in northeast to take off in June

The Rs 1,100-crore five-year project initiated by the Automotive Tyre Manufacturers’ Association (ATMA), the apex body of major tyre makers in India, to plant rubber in 200,000 hectares in the north eastern states will go on stream this month.

Rubber Board will start the cultivation on a limited scale from June. ``We are starting with 10,000 hectares in the first year due to Covid-19 restrictions and limited availability of plants from nurseries,’’ said Dr K N Raghavan, chairman and executive director of the board.

Majority of the plants will comprise those produced in the nurseries of Kerala, the top rubber producer in the country. Besides the popular varieties RRII 105 and 430, some RRIM 600 clones form northeast that can withstand severe winds will also be planted, he added.

ATMA will provide financial support of Rs 50,000 per hectare either through a credit linked scheme or by direct payment for the planting materials.

The project is expected to boost the rubber production in the country that has stagnated in the range of 600,000 to 700,000 lakh tonnes in the last few years as low prices prevented growers from increased tapping.

The prices started looking up since the end of 2020, reaching a seven year high of Rs 170 per kg for the variety used by the tyre industry. The price rally and the board’s efforts to re-activate untapped estates in Kerala saw production inch up by 0.4% to 715,000 tonnes in FY21
Industry experts have projected the global demand for natural rubber to grow at nearly 5% CAGR in the next five years as economy rebounds post Covid-19.

"The idea is that the productivity and yield from the new plantations will be higher. We will also be doing quality improvement programmes under the project,’’ said ATMA director general Rajiv Budhraja.

Since most of the tyre factories are situated in the West and South of the country, the idea of water transportation can be explored to bring down the transportation cost, he added. Non-tyre units located mostly in North India, however, can save the cost of transportation from Kerala with increased supply from north eastern states.

As the production in Kerala has plateaued, the board and the industry have decided to focus on northeast where rubber is grown in all the states. The region together accounts for 23% of the total rubber production with Tripura leading with over 10% share followed by Assam. The total acreage under rubber in northeast is 160,000 hectares.

Kerala’s rubber production has dwindled by nearly 15% since 2010 to 5,34,000 tonnes in FY20 as per the data of Association of Planters of Kerala (APK). The rubber acreage in the state has shrunk by 8% during the decade to 551,000 hectares. This represents 67% of the total area of 822,000 hectares under rubber in the country.

"With the steep increase in wages, the cost of production of rubber in Kerala is in the range of Rs 170-175 per kg in the organised plantations compared to Rs 52 per kg in Tripura. Even in the unorganised plantations the production cost will be higher than in the north eastern states, ‘’ said Ajith B K, APK secretary.

Many of the rubber estates in Kerala are at fifth or sixth stage of replantation which has reduced productivity. ``The productivity is highest in virgin plantations in the first 30 years,’’ he pointed out.