(Akron/Tire Review) Vietnamese newspaper Thanh Nien News has reported that Vietnam’s Southern Rubber Industry Co has completed a contract to supply 100,000 to 120,000 light truck tyres a year to Continental AG. In July, Southern Rubber Industry, also known as Casumina, completed a previous deal with Continental to supply 300,000 motorbike and scooter tyres a year.
The Vietnamese Government has taken steps to protect its domestic rubber industry by imposing an import tax on car tyres and tubes of 30 per cent and a 50 per cent tax on motorbike and bicycle tyres and tubes. These will fall to five per cent by 2006, as a condition of Vietnam’s entry into AFTA; the ASEAN Free Trade Area.
Vietnam’s rubber producers have called for a limit on exports of crude rubber. Exports to countries such as China have increased to the stage where the domestic rubber processing industry is facing a shortage of raw materials.
The price of rubber, at US$0.54, is the lowest for 30 years. Tyre producers, who buy two-thirds of rubber production, are being very cautious in view of the falling demand for cars in the large industrial countries. Thailand, Indonesia and Malaysia want to keep prices high through a cartel but to date have not been very successful. Competitors Vietnam and Cambodia are increasing production, which has kept prices low. The rubber producers are pinning their hopes on China which – if it joins the World Trade Organisation – will import more rubber.
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