MRF looking at rubber acquisition options – but not rushing in

Almost a year ago, MRF chairman K M Mammen told journalists the tyre maker was considering acquiring or leasing a 100,000 hectare rubber plantation in Southeast Asia. Since then, little has been heard on the subject. In recent days, however, Indian newspapers the Hindu Business Line and Business Standard have both quoted MRF executive vice-president of marketing, Koshy Varghese, as saying the company is currently investigating its options.

At present, MRF uses 12 to 13 tonnes of rubber a month, which it sources from plantations in India’s north-east and from Kerala state. “Though prices of rubber internationally and in India have softened, the concern now is the long-term supply of rubber…In the next three to four years, we would require 30 to 40 per cent more rubber,” Vargehese told the Hindu Business Line. “We may have to look at captive rubber estates to meet our needs.

According to both newspapers, the Indian manufacturer has dispatched teams of investigators to rubber producing countries including Vietnam, Malaysia, Indonesia and Cambodia in order to scout for rubber estates it can potentially acquire. “We have sent our teams to these countries. But these countries are not so transparent. Acquisition will take time; we haven’t frozen anything,” Varghese added.

In addition to seeking rubber plantations, MRF says it will also enter the military tyre market in the near future. “Expect an announcement on this soon,” Vargehese commented.