Jakarta, 9 April 2015 – The Government of Indonesia is pushing domestic demand of Natural Rubber (NR) to flourish downstream industry, with a focus on infrastructure products. This effort is expected to absorb 100 thousand tons of NR annually starting 2015, deriving a minimum of 700 thousand tons of total domestic utilization this year.
Expanding domestic utilization is one of the Government�s strategies to increase the currently plummeting price of NR in international commodity market. �The current price of NR now crashes at USD 1,5/kg, while in 2011 the price once reached USD 4,61/kg,� said the Minister of Trade, Rachmat Gobel, in the press conference �Improving Domestic NR Utilization Program� conjointly with the Minister of Industry, Saleh Husin, Head of Agency for Assessment and Application of Technology (BPPT), Unggul Priyanto, Acting Secretary General of the Ministry of Public Works and Public Housing (PU-Pera), Taufik Widjoyono, Director of Annual Crop of the Ministry of Agriculture, Herdrajat Natawidjaja, and Director of Traffic and Road Transport of the Ministry of Transportation, at the Ministry of Trade office, today (9/4).
To initiate this program, the Government will utilize more NR in state�s budget-based infrastructure projects. �This year, the Government prepares IDR 118 trillion for national infrastructure development projects, in which NR must be introduced as one of key supporting products,� asserted Trade Minister Rachmat.
Indonesia is currently the world�s second largest supplier of NR with total production of 3.1 million tons which contributed USD 4,7 billion revenue in 2014. Current NR domestic utilization is estimated at 18%; primarily for the Tire Industry, Gloves, Vulcanized Rubber, and other rubber articles, while the larger part is exported as raw Crumb Rubber, Ribbed Smoked Sheet (RSS) and concentrated latex.
Several infrastructure projects that potentially absorbs domestic NR include dock fenders for seaport facility, asphalt mixture for roads, rubber pads for railroads and bridge bearings, rubber dam, water stop components/gates for dam construction, irrigation and swamp development.
�In addition to infrastructure-related products, other downstream industries that are encouraged domestically include cow mats, rubber roof tiles, paving blocks, earthquake-resistant building bearings, cliff reinforcement, latex mattresses, and many others,� said Rachmat.
Rachmat expects this program would also be supported by all producers of NR, including the Rubber Association of Indonesia (GAPKINDO) and the Indonesian Rubber Council (DEKARINDO).
�Through this program, we also expect to diversify domestic NR downstream industries. Not only will it meet domestic demand, but also enhance exports of value-added products that can contribute greater national revenue and solidify the sustainability of Indonesian NR plantations, especially smallholders rubber plantation,� said Rachmat.
Trade Minister Rachmat added that this program will also bestow extra benefit in terms of sustainability aspects, as rubber plantations contribute to negate air pollution with 35 tons of CO2 absorption per hectare; equivalent to 35 carbon credits annually. Furthermore, rubber plantations also generate 23 tons of oxygen per hectare annually, which are essential for all living beings on Earth.
For further information please contact:
Head of Public Relations Center
Ministry of Trade
Nurlaila Nur Muhammad
Director of Export for Agriculture and Forestry Product
Directorate General of Foreign Trade
Ministry of Trade
Tel/Fax: 021- 3440787/3858171