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Feasibility Report On The Export Of Natural Rubber In Nigeria

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Feasibility Report On The Export Of Natural Rubber In Nigeria

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Hevea brasiliensis drives the world – quite literally. Hevea brasiliensis is the world’s number one source for natural rubber, and though the primary use is in vehicle tires, it has hundreds of consumer and industrial applications. These include uses in building and bridge construction, medicine, personal care and transportation, and in many cases, it cannot be replaced by synthetic, or petroleum-based, rubber.

Product Description

Most natural rubber, also called India rubber or caoutchouc, comes from latex, the milky tree sap of Hevea brasilensis. The trees are tapped by making an incision in the bark of the tree and collecting the sap in a bucket – a very low-tech process and much like the way maple trees are tapped to make maple syrup. The latex is then refined into natural rubber.

The harvesting (Tapping) or rubber is done during the dry season. Tapping normally takes place early in the morning, when the internal pressure of the tree is highest. A good tapper can tap a tree every 20 seconds on a standard half-spiral system, and a common daily “task” size is between 450 and 650 trees. Trees are usually tapped alternate or third daily, although there are many variations in timing, length and number of cuts.

Rubber is grown in Edo, Delta, Ondo, Ogun, Abia, Anambra, Akwa Ibom, Cross River, Rivers, Ebonyi and Bayelsa States where the amount of rainfall is about 1800 mm to 2000 mm per annum.

Close to 21 million tons of rubber were produced in 2005, of which approximately 42% was natural. Since the bulk of the rubber produced is of the synthetic variety, which is derived from petroleum, the price of natural rubber is determined, to a large extent, by the prevailing global price of crude oil.

Today, Asia is the main source of natural rubber, accounting for about 94% of output in 2005.

The three largest producing countries, Thailand, Indonesia (2.4m tons) and Malaysia, together account for around 72% of all natural rubber production. Natural rubber is not cultivated widely in its native continent of South America due to the existence of South American leaf blight, and other natural predators of the rubber tree.

Demand for rubber started to pick up after the global economy recovered from financial crises in late 2008 and early 2009. Positive moves in the tyre production industry which captures 68% of the total demand for natural rubber helped to boost the requirement further. Recovery in global automobile sales also helped in the recovery of rubber prices. While the requirement of natural rubber continued to increase, its production and supply did not increase at the same pace because of plantations are either too old or immature to start yielding.

The gap between the demand and supply of natural rubber increased further in 2009 when Thailand, Indonesia and Malaysia, the three largest producers of natural rubber cut down the production by 4.3% of their volume to stabilize global rubber price. Rapid growth in the automobile sectors of China and India also increased the demand for natural rubber in 2011, while the supply remained low.

According to the International Rubber Study group, the global demand for natural rubber may reach 12.4 million tons by 2015 and 14.2 million tons by 2020, while the production of natural rubber can reach only 13.6 million tons/ year in 2020. Demand for natural rubber for automobile industry in China and India is also expected to increase further.

Table of Contents

1.  Introduction
1.1 Executive Summary
1.2 Business Opportunity
1.3 Country Background

2. Technical Analysis
2.1 The Project
2.2 Product Description
2.3 Product Location and Distribution
2.4 Legal Considerations
2.4.1 Pre-Export Documentations in Nigeria
2.4.2 Post-Export Documentations (Exchange Control Documents)

3. Opportunity

3.1 Market Overview
3.2 Demand and Supply
3.3 Customer Profile
3.4 Primary Competition
3.5 Competitive Advantage

4. Managing Contract Negotiations and Export Operations

5. Socio- Economic and SWOT Analysis of the Project
5.1.1 Generation of Employment
5.1.2 Source of Government Revenue
5.1.3 Foreign Exchange Generation
5.1.4 Technological Transfer
5.1.5 Increase in Gross Domestic Product (GDP)
5.2 SWOT Analysis

6. Risk Identification and Mitigation Strategy
6.2 Critical Success Factor

7. Financial Analysis

Report Details

Report Type: Feasibility Report
Formats of Delivery: MS WORD
No. of Pages: 21 Pages
Report Code: FORA/2016/NATURALRUBBEREXPORT/343987
Publisher: Foraminifera Market Research
Release Date: 25/06/2016; We update our reports quarterly.
Language: English
Delivery time: 24– 48hours

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