Synthetic Rubber Mkt to Clock Double-Digit Growth.

On the back of a strong demand for synthetic rubber in auto and tyre industries, coupled with lower natural rubber production due to heavy rains in Kerala, rubber chemicals industry leader Lanxess sees synthetic rubber market in India logging double-digit growth in FY11.

"There is a rise in demand for premium products in India and West Asia. India pose very good growth opportunities due to rising middle-class and increasing spending power, which translate into more mobility and higher demand." Axel C Heitmann, chairman, Board of Management, LANXESS AG, told FE on the sidelines of a conference to mark the Rubber Day on Friday.

"We are expanding our network and manufacturing base here and heading for a strong performance in 2010. We will, therefore, continue to drive forward our expansion in this country in the next five years," Heitmann said. "India is preparing to become the third biggest market for engineering plastics after the US and China," he added.

Not only the rise in demand, the upward bias in natural rubber prices in India is also creating opportunities for the synthetic rubber industry. According to the Rubber Board, the steep rise in natural rubber prices has resulted in a sharp increase in consumption of synthetic rubber in the country.

The consumption of synthetic rubber was up 26.6% during April-July of the current fiscal year, compared to 4.9% in the same period of 2009-10. In volume terms, total synthetic rubber consumption increased to 132,925 tonne in April-July, against 104,955 tonne in the same period of the previous financial year.

Understandably, Lanxess, which invented synthetic rubber in its laboratories way back in 1909, is betting big on India. After having set up a state-of-the-art plant for ion exchange resins in the new chemical park in Jhagadia in Gujarat, the company plans to set up more manufacturing plants in India.

Once the new facilities for high-tech plastics production is completed, the company will invest a total of around 60 million euro in Jhagadia, which is the second largest production site in India after Nagda in Madhya Pradesh.

India's rubber production in November is estimated to be almost 15% less than earlier projections, which could trim overall rubber output from the country in 2010-11 crop season, if the trend continues. Rubber production in November is now estimated to be around 88,500 tonne, down from the earlier estimate of 1,04,000 tonne as heavy rains in Kerala impacted tapping. Rubber imports in the eight months to November 30 totaled 1,43,468 tonne from 1,39,321 tonne as tire companies stepped up purchases, the rubber board said.

Source : news.in.msn.com