Sumitomo Rubber to open natural rubber procurement specialty unit in Singapore
SINGAPORE, NNA - Japan’s Sumitomo Rubber Industries, Ltd. will extend its reach to procure natural rubber beyond Asia to global suppliers by starting a procurement unit in Singapore in April amid decreasing Asian production of the material used for automobile tires manufacturing.
The Japanese rubber producer earlier this month launched Sumitomo Rubber Singapore Pte. Ltd. with a capital of $18 million in HarbourFront Centre in Singapore, the world's largest natural rubber trading hub, a spokesman told NNA Wednesday. The procurement activities will start in April.
The procurement operation will be transferred to the new subsidiary from a division of Sumitomo Rubber’s tire sales unit in Singapore, Sumitomo Rubber Asia (Tyre) Pte. Ltd., the first business for the group focusing on the natural rubber procurement globally.
Sumitomo Rubber will seek natural rubber suppliers in the world, including Brazil and Africa, as it currently procures the material from Indonesia, Thailand and Malaysia. Natural rubber production in those Asian countries has been reduced, hit by heavy rainfall and forest disease.
Consolidation or withdrawal of natural rubber suppliers has also hurt the production of the material, causing a risk of a market monopoly and price fluctuation. Those factors combined are prompting Sumitomo Rubber to seek a stable supply of natural rubber.
The Japanese company also said that with the potential for human rights abuses, deforestation and other problems that may arise in the process of producing natural rubber coming under sharper scrutiny from the viewpoint of sustainable development goals, or SDGs, there is a higher demand for considerations from the perspective of human rights and the environment in the procurement process toward realizing sustainable procurement of natural rubber.