THE WORLD BANK FAU 13

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SEC'TORAL LIBPARYN Public Disclosure Authorized llTeRNATI0NAL 3'#N

"CONSTRUCTlON AND oEVELOPMAN Public Disclosure Authorized Agro-Industry Proffles RUBBER Public Disclosure Authorized

s 698 * A37 1985 FAUr 13 PROFILES IN THIS SERIES:

OILCROPS - OVERVIEW ...... FAU-01

OIL SEEDS ...... FAU-02

OIL PALM...... e. FAU-03

COCONUT ... e...... FAU-04

SUGAR...... e...... o... .FAU-05

ETHANOL. .o.o.o.o...... e...... FAU-06

WHEAT...... o s.o.o...... o... FAU-07

RICEo o o o o s o ...o.....ee....e.....FAU-08

CORN .... .oo ... o .. . e...... FAU-09

CASSAVA o...... oooo o. FAU-10

ANIMAL FEEDSo. .ooooo..o....o. . .FAU-11

FRUITS AND VEGETABLES...... oFAU-12

RUBBER...... oo...... o o. FAU-13

COFFEE .... e...... oo...... o...... FAU-14

TEA ...o...ooo.o....o...ooooooo.FAU-15

COCOA...... e..eo ...... e. FAU-16

COTTON...... o..o ...... FAU-17

MEAT .. ... ESSENI OL...... FAU-18

SPICES AND ESSENTIAL OILS ...... FAU-19 ABSTRACT The object of this Profile is to provide a review of the rubber processing industry. It explores various aspects of the industry, from raw material production to processing, refining and marketing. It contains specifications for major products and world consumption figures, a glossary of key words, and a bibliography of useful references. It traces collection and milling as well as preparation techniques, including granulation, creping, drying/smoking and baling; and refining techniques such as mastication, mixing, formation and . Marketing aspects are addressed, covering grade, quality control, uses, substitutes and market characteristics and barriers. Other factors, including location, environmental issues, and plant capacity are also discussed. An Annex contains examples of investment and operating costs. Conversion tables (Metric/US) are included for the readers' convenience. I I I I I FOREWORD

The nature of project and sector work in the World Bank is such that staff are often called upon to work outside their major fields of specialization, if only to make an initial judgement on the utility of further, often costly, investigation. Under these circumstances, up-to-date and authoritative reference material is essential.

The profiles in this series are designed for use by operational staff with experience in the agricultural sector but who do not have a technical knowledge of the particular commodity under discussion. Their purpose is not to substitute for technical expertise but to provide a reliable inhouse reference which will help Bank staff to determine when and what expertise is needed in the detailed evaluation of investment proposals in agro- processing.

The conditions for any particular proposal are bound to be unique in a number of respects, and the use of norms and general data in project analyses could give rise to significant errors. On the other hand, by providing responsible staff with a guide to the issues on which appropriate expertise should be sought, these profiles can contribute to the overall quality of agro processing investment. Used with care, they should also facilitate broad pre-screening such as may occur during sector work and reconnaissance.

Questions, comments and further inquiries should be addressed to: Agro-Industries Adviser Finance and Agro Industry Unit Agriculture and Rural Development Department

The contribution of Harrisons Fleming Advisory Services, Ltd. in the review of this profile is gratefully acknowledged.

September 1985 I I Rubber

CONTENTS

DATA SHEET i ......

INTRODUCTION ...... 1

GLOSSARY ...... 1

RAW MATERIALS ...... 3

PROCESSING ...... 6

REFINING ...... 13

MARKETING ASPECTS ...... 17

OTHER FACTORS ...... 22

BIBLIOGRAPHY ...... 24

ANNEX I EXAMPLES OF INVESTMENT AND OPERATING COSTS

ANNEX II CONVERSION TABLES (METRIC/US) I Rubber

DATA SHEET

The dry rubber content (drc) of field latex is about 35% (Rubber Research Institute of Malaysia - RRIM, 1979). The national average yield of drc in peninsular Malaysia in 1980 was almost 1,500 kg/ha. Average smallholder yield was about 750 kg/ha, while the large estates realized 1,655 kg/ha.

Rubber packaged in crepe or sheet form is usually pressed into bales of 111.11 kg to give 9 bales per ton.

Crumb rubber is packaged in bales of 33 and 1/3 kg; a pallet consists of thirty bales packaged in a crate and weighing 1 ton (Barlow, 1978).

i.~~~~~~~~~~~~~~ i

I I I INTRODUCTION

Natural rubber is processed into two basic forms: dry rubber and liquid latex.

Dry rubber is made from coagulated field latex and/or field coagulum which is milled, creped, or granulated. These three processes yield sheet, crepe, and crumb rubber, respectively. Subsequent processing operations include drying or smoking and baling.

Liquid latex, comprising less than 10% of total rubber production (Wanigatunga, 1983), is made by concentrating the field latex, i.e., increasing its dry rubber content, by removing water. For a more detailed discussion of processing, the following texts are recommended:

Barlow, C. (1978) The Natural Rubber Industry: Its Development, Technology. and Economy in Malaysia. Oxford: Oxford University Press; and

Pee, Teck Yew and Ani bin Arope (1976) Rubber Owners' Manual, 1976: Economics and Management in Production and Marketinq. Kuala Lumpur: Rubber Research Institute of Malaysia.

GLOSSARY

Block Rubber Uniform grade, technically-specified crumb rubber which is compressed into blocks.

Build-up Construction of rubber product from various components, binding the different parts by means of a calender. Calender A multi-roller machine which spreads and impresses a rubber coating onto a supporting material, such as fabric.

1 Coagulum A sponge-like rubber mass recovered from liquid latex, either spontaneously or by the use of chemical coagulents.

Crepe Rubber Rough-surfaced sheet rubber produced by passing coagulum through a series of rollers which rotate at different speeds.

Crumb Rubber Technically specified particulate rubber formed by mechanical granulation or by the addition of crumbling agents to coagulum.

Cup Lump Latex not retrieved during collection which spontaneously coagulated in the cup. drc Dry rubber content of liquid latex; usually expressed in percentages, and used to measure yields, which are normally given as tons of drc.

Elastomers Any natural or synthetic materials with elastic properties.

Field Coagula Low grade coagulated rubber retrieved from the field; includes cup lump, tree lace, scrap from the base of the tree, and pre-coagulated rubber strained from the latex.

Ground Scrap A mixture of bark, dirt, and rubber (Earth Scrap) found at the base of the tree and used in the production of low grade dark crepe. of Latex Milk-like liquid extracted from bark rubber trees.

Latex Concentrate Latex with a drc of 60%, or about twice that of field latex.

Milling Passing of coagulum through successive pairs of rollers in the formation of sheets.

2 Sheet Rubber Sheets of milled coagulum dried in air-drying tunnels (Air Dried Sheet) or cured in smoke houses (Smoked Sheet).

Tapping Severing of latex vessels in the bark for the purpose of collecting latex. Technically Specified Rubber which is graded according to a Rubber series of rigorous technical properties, e.g., dirt retention, plasticity reten- tion, viscosity.

Tree Lace Spontaneously coagulated rubber gath- ered from tapping cuts. Vulcanization Application of heat, chemical accelerators and vulcanizing agents (usually sulphur) to rubber to improve its elasticity and maintain its shape over a wide temperature range; introduces cross links between the long chain molecules of rubber.

RAW MATERIALS

The vast majority of the world's natural rubber production is derived from the tree, hevea brasiliensis. It is best grown in equatorial climates characterized by: relatively little variation in temperature; even distribution of rainfall of at least 1800-2000 mm annually (Barlow, 1978); absence of destructive winds; and soils with good drainage. A mature rubber tree is 25-30 meters in height and has a girth of 45-50 cm at a point 75 cm from the base (Pee and Ani, 1976).

Rubber is grown on smallholdings and large estates; the latter normally have their own processing facilities.

3 Tapping

Tapping is the means by which latex is harvested. An incision is made in the bark of the tree that severs as many latex vessels as possible in relation to the length of cut. Latex vessels spiral from bottom left to top right at an angle of 3.7 degrees from vertical and are concentrated in the inner bark close to the cambium. A cut from high left to low right penetrating to within 1 mm of the cambium is recommended. The latex is channeled into into the collection cup by cutting a groove which is normally 25-30 degrees from horizontal. At each tapping, the same cut is reopened by the removal of a thin shaving of bark. Tapping depth is critical. A cut too shallow will not reach the greatest concentration of latex vessels. One too deep will touch the cambium causing wounding, and thereby harming future yields. Release of latex stimulates production of its replacement. The flow rate of latex declines rapidly during the initial 40 minutes from the time of incision, and within three hours latex vessels become plugged with spontaneously coagulated latex. Flow normally ceases after four hours. Tapping systems designed to produce optimum long-term yields are many and varied. Excessive frequency of tapping, excessive length of the tapping cut, or multiple cuts, lead to both yield decline and exhaustion of bark reserves. Tapping of a half circumference spiral cut "alternate daily" (every other day) has commonly evolved as the optimal method of long-term exploitation. Stimulation, commonly implemented by the application of ethephon to the groove or bark immediately below the tapping cut, substantially increases latex flow by retarding the spontaneous plugging of latex vessels. Since the early 1970s the use of ethephon has become an increasingly accepted means of boosting the yield per tapping. In combination with reduced tapping frequency, stimulation can produce enhanced yields with smaller labor requirements and lower bark consumption. Smallholders often fail to practise the best long term systems, tending to tap too heavily in times of good prices, and often stopping tapping when prices are low. Tapping begins in the 6th or 7th year, when a girth of 45-50 cm is reached 75 cm from the base (Pee and Ani, 1976). When begun too early, too little latex is harvested to make the effort worthwhile; furthermore, this increases the possibility of injury

4 to the tree and tree growth may be retarded. When begun too late, there is an irreparable loss of yield. Yields increase progressively during the first 10 years of tapping, stabilize for the next five, then begin to decline. After 20-30 years of tapping, the trees must be replaced. The national average annual yield of rubber estates in peninsular Malaysia in 1980 was 1484 kg drc/ha. This spanned a range from 1224 kg/ha for small estates (less than 200 ha) to 1655 kg/ha for certain types of large estates (405 ha and larger). Corresponding smallholder yields averaged 751 kg/ha.

Determinants of yields are discussed in detail by Barlow (1978), p. 135-159.

5 PROCESSING

For more than half a century, until the early 1960s, traditional rubber processing methods remained more or less unchanged. and small-scale producers were equally adept at the simple Large- were operations involved. The crepes and sheets thus produced according to a visual system which emphasized appearance graded have as opposed to technical qualities. While modern methods since been introduced in response to the demand for a more approach to technical quality control, rubber produced systematic of by traditional methods continues to comprise the majority total production. The 'New Process' rubbers are graded according to specifications to be of economic consequence to the consumer, such as believed aim impurity content and plasticity retention. In addition, they a uniform quality of output. Block rubbers produced to maintain 1977 in this way comprised 39% of the total export production in (Grilli, et al, 1980). involves the transformation of field latex into a Processing a marketable form. Concentration of the collected liquid yields latex concentrate which in 1975 comprised 8.5% of total world rubber exports (Ibid). Dry rubber in crepe, sheet, and block form makes up the remainder. Its manufacture involves the following operations: coagulation; creping, milling, or granulation; drying or smoking; and baling, as depicted in Flowchart 1 (next page).

Collection

The raw material collected from rubber trees is of two types: field latex and field coagulum, depending on whether or not coagulation has occurred. Field latex is the spontaneous bark, milk-like liquid exuded from incisions in the rubber tree while field coagulum is the spontaneously coagulated rubber collected following tapping.

6 Flowchart 1: Rubber Processing - Overview Sources: Barlow (1978) and Pee (1982)

Rubber Tree]

Field Latex Field Coagulum

Concentration Coagulation > Creping .CI C71 Milling Granulation (Crumbing)

Drying Smoking Drying Drying

Baling Baling Baling Baling

LATEX AIR DRIED SMOKED BLOCK REMILLED CONCENTRATE SHEET SHEET RUBBER LATEX CREPE

7 Field coagula are of several types: - cup lump, the coagulated rubber formed in the collection cup following latex collection. This is the result of uncontrollable exuding of latex from the tapping incision, which eventually closes as a result of spontaneous coagu- lation.

- tree lace, the coagulated rubber formed in drips between tapping incision and collection cup;

- ground scrap, from the base of the tree; - pre-coagulated rubber, strained from the latex. Natural coagulation can be caused by the enzymes present in the latex, acids formed by bacteria, or salts and tannins from the bark. It is not desirable, since field coagulum cannot be used in the production of latex grade rubbers. An anti-coagulent such as ammonia is often added to the latex to prevent coagulation. Equally undesirable is the presence of dirt and other impurities in the latex. Precautions must be taken to maintain high levels of cleanliness during the collection process. Upon its arrival at the processing center, field latex is bulked, i.e. mixed, in large containers. The purpose of bulking is to standardize the latex. Variations in drc, concentration of mineral elements, latex stability, and color occur as a result of tapping from different fields and clones, and variation in temperature, rainfall and tapping intensity. A first straining follows the bulking, to remove large debris such as bark, leaves, and sticks from the latex. Special hydrometers are then used to determine the rubber content of the latex, which varies from field to field and from day to day. At this point the latex is diluted with water to a 12-15% drc to standardize subsequent preparation. A second, finer screen is then used to remove remaining solid impurities.

8 Concentration

If the field latex is to be converted to latex concentrate water must be removed and the drc increased to 60-70% in order to minimize shipping and freight costs (Pee and Ani, 1976). Several methods are used commercially to concentrate the latex: evaporation; electro-decantation; creaming; and centrifuging. Of these, centrifuging is the most common. In centrifuging, rapid rotation of the latex in the bowl of a centrifuging machine causes the separation of relatively light-weight rubber particles from the heavier latex serum. The concentrate is re-worked until the desired 60-70% drc is obtained. The skim is usually coagulated and used in making crepes.

Creaming involves the addition of creaming agents such as salts of alginic acid to the latex, causing the rubber particles to rise to the surface in clumps. Although this method is simple and inexpensive, it is relatively sensitive to variations in the field latex.

Evaporation in the traditional sense involved surface evaporation of stabilized latex in large horizontal rotating drums. A more modern technique requires the passage of liquid latex through a tubular heat exchanger and into a reduced pressure chamber where vaporization occurs.

Coagulation

Coagulation is the process by which rubber is extracted from the latex. While many chemicals cause coagulation, formic acid is the most commonly used. Coagulation can take from three to twenty-four hours, depending on the concentration of the latex. Quickly-coagulated rubbers tend to be harder and more difficult to mill.

Again, strict sanitary standards are required since the presence of bacteria may result in bubble formation; other impurities can affect color and appearance, leading to down-grading of the final product.

9 Milling

The thick lump of coagulum must be flattened to facilitate drying. It is pressed by hand or by means of an iron bar on a flat surface and then passed through a series of hand- or power-rolls adjusted to a final thickness of 0.3 cm. Uniformity of thickness, shape, and consistency are important at this stage (Pee and Ani, 1976). Water is used to wash the sheets between passages. The final rolls are grooved, producing a "ribbed" effect on the surface of the sheet, to reduce drying time.

Granulation

Granulation, or crumbing, is the key operation in the production of technically specified rubbers. The size reduction of coagulum blocks and field coagulum is accomplished either mechanically or by the addition of an incompatible oil or crumbling agent. Among mechanical methods, use of the creper/hammermill has widely replaced that of other crumblers and granulators. Either latex coagulum or field coagulum can be used; prior to granulation the former must be crushed to a thickness of about 5 cm and macerated, while the latter requires cleaning, blending, shredding, and creping (see next section). The creper/hammermill reduces the rubber input into small particles as the rapidly rotating hammers strike the material. Power requirements for this process are substantial. The addition of an incompatible oil to liquid latex or to cleaned field coagulum crepe during milling causes the loss of natural tackiness or stickiness, thereby preventing agglomeration following crumbling. When recommended oils are used in recommended proportions, the properties of the rubber are not adversely affected. The Heveacrumb process, in which castor oil is used, has been widely adopted (Ibid).

Creping

Remilled crepe is produced by passing coagulated rubber through a series of power-driven sheeting rolls which rotate at different speeds. This imparts a tearing action which continuously exposes fresh surfaces in the rubber, effectively mixing it in the

10 process. A creping battery consists of a succession of rollers: a macerator with large rolls, deep grooves, and low rotational differential produces a coarse-textured blanket; an intermediate creper with less-profound grooves and a moderate rotational differential produces a lacy crepe; and a smaller finishing machine with smooth rolls and a very high shear (1:2) produces the final product. The number of passes through each machine depends on the material being processed, with lower grade inputs requiring more creping. The manufacture of remilled crepes requires much greater energy inputs than does that of sheet rubber. Remilled crepes are made from a variety of inputs:

-thick and thin estate brown crepes, from cup lump and other high quality scrap; -thick blanket crepes (ambers) and thin brown crepes, from unsmoked sheets, cup lump, and other high grade scrap; and -flat bark crepe, from earth scrap and other low grade scraps.

Higher quality pale and sole crepes are manufactured from latex. These require the removal of carotenoid pigments, since lighter colored products command a higher price. Oxidation in the field is countered by the addition of a bleaching solution, such as sodium sulphite. This is reinforced by the addition of sodium metabisulphite upon arrival at the processing center. Since latex color varies with clone type, this factor must also be considered when pale and sole crepes are to be produced.

Drying/Smoking

Drying of sheet and crepe rubbers begins with the hanging of the sheets and crepes; this allows the runoff of water used in processing.

Unsmoked sheet, produced by smallholders, is dried in the open air and sold in its 'white' state. Crepes can be dried by means of natural ventilation in airy buildings shielded from direct sunlight or in special heat-controlled drying houses. Because of its texture, crepe requires less drying time than sheet rubber.

11 The grying of crumb rubber requires the application of hot air (110 C) to perforated trays of crumbs, using a heat exchanger, normally one fired by oil. The process takes four to seven hours, depending on the materials used and the efficiency of the dryer. According to one source (Pee and Ani, 1976), if throughput of rubber is less than 500 kg per hour, single-layer tray driers with direct firing burners should be used. For throughputs of 1000 kg per hour or more, chamber dryers, which are more economical with respect to space and fuel consumption, are recommended. Most sheet rubber is smoked, either as is or, more typically, as ribbed sheet to facilitate drying. (This requires an additional stage of milling, in which the sheet rubber is passed through grooved rollers, to produce the ribs. Ribbing increases surface area exposure which facilitates drying.) The smoking process acts to preserve the rubber against fungal growth, although there are now fungicides available for this purpose. In traditional, labor-intensive methods, sheets of rubber are are hung in smoke-filled6 multi-story smokehouses. Temperatures maintained at 50-60 C. Drying time depends on the thickness of the sheet: one that is 2.5 mm thick requires about four days, while one that is 5.0 mm requires 16 days (Polhamus, 1962). It is important to maintain proper ventilation and cleanliness standards, particularly with respect to condensation of tars on the ceiling which could drip onto the sheets below. In large-scale, modern smoking operations sheets are hung on trolleys which are rolled through heat-controlled smoking tunnels, in which temperatures are higher at later drying stages. These require less smoking time.

Baling

Sheet and crepe rubber is shipped in bales usually nine to the ton, each weighing 111.11 kgs. A bale is prepared for shipment by stacking and compressing sheets into solid blocks which are then normally wrapped in rubber sheets of the same grade as the bale contents. Bales of sheet and crepe are normally covered with a talc-based bale coating to prevent them from sticking together in transit.

12 Bales of crumb rubber (block rubber) are formed using a hydraulic press with pressures of 50-60 tons. They are wrapped with an opaque polythene wrapper which keeps out light and dust and prevents blocks from sticking together.

Each block weighs 33.3 kg (Barlow, 1978). Thirty blocks packed together in a crate form a 1000 kg pallet. Pallets are well-suited to the rigors of overseas shipment and storage. Increasingly, block rubber is being shipped in 20 and 40 ton containers to reduce handling and shipping costs and to give greater protection.

REFINING

Raw rubber is , i.e., it can be formed into and will retain a given shape. It is also sensitive to variations in temperature, i.e., it softens upon exposure to heat and becomes brittle at low temperatures. Refining effectively minimizes both of these characteristics and, in the process, improves rubber elasticity.

Four principal stages comprise the refining process: Mastication (for dry rubbers), mixing or compounding, formation, and vulcanization. These stages are detailed in Flowchart 2 on the following page.

Mastication

Natural rubber in bale or block form is stiff and difficult to manipulate. Mastication is the process by which it is softened into a doughy, semi-plastic consistency for subsequent mixing or formation.

This is accomplished mechanically by the use of mixing rolls or an internal mixer. Mixing rolls are similar in principle to rollers used in milling. They are placed in a parallel position horizontally and are of a much heavier construction, however (Polhamus, 1962). As in creping, the rolls operate at unequal speeds, pulling and tearing the rubber as it passes.

13 Flowchart 2: Refining of Rubber

Dry Rubber Latex Concentrate

Mastication

Mixing Mixing

Extrusion Molding Build-up Calendering Dipping Foaming

Lulcanizatioi 1X

Rubber Products]

The internal mixer masticates the rubber by means of two rotors in an enclosed chamber. The irregular shape of the rotors helps prevent excessive adhesion and build-up. Mastication is not necessary for those technically specified rubbers with constant, low viscosity.

14 Mixing

A wide variety of materials is added to natural rubber to aid in processing, to alter the properties of the finished product, and, as a , to increase the bulk. General categories include (Polhamus, 1962):

-Softeners, such as mineral and vegetable oils, waxes, tars, pitches, and resins, which are added to minimize break-down time (and cost), to increase the rubber's natural tack, and to increase the flow quality necessary for extrusion and molding;

-Antioxidants, to counter the natural oxidation process which causes the rubber to harden and crack; -Accelerators, such as benzothiazole, thiuram sulphides, salts of dithio acids, quanadine derivatives, and aldehydeamines, and accelerator activators, to speed up the process of vulcanization;

-Fillers, such as carbon black, whiting, clay, slate, flour,and the already-mentioned oils, to lower the product cost by increasing its bulk. (Some of these add more than weight, e.g., carbon black strengthens the rubber.); -Vulcanizing agents, chief of which is sulphur; and -Other additives including pigments and dyes, odorants, and abrasive agents.

An internal mixer is commonly used for mixing, replacing the mill as a result of its speed and handling capacity. Mixing time is important: too little results in incomplete mixing while too much can mean scorching of the compound.

A masterbatch is a rubber mix from which one or more additives has been deliberately omitted. Masterbatching eliminates the need for measurement of small quantities of ingredients, aids in additive dispersion, and contributes to efficiency of the production flow (Blow and Hepburn, 1982). The missing ingredients, usually curing or vulcanization agents, are later added to the mix.

15 Formation

The desired form of the finished article is shaped by extrusion, molding, build-up or calendering of softened, masticated rubber; or by dipping or foaming when latex concentrate is used. -Extrusion. In an extruding machine, pressure produced by a screw forces rubber through an orifice. The result is usually a tube, cord, or profiled strip. -Moldinq. This involves forcing the rubber into molds or casts, often under pressure. treads are an ex- ample of molded products; inflatable bags placed inside the tire serve to force the rubber into the mold. -Build-up. In this process, a rubber product is created from various components, which are bound together by means of a calender. -Calenderinq. This spreads the rubber compound onto and forces it into a fabric by passing both through multi-roller machines known as calenders. The result is rubberized fabric. -Dipping. Alternating the immersion of a special form in latex concentrate with drying produces a thin-layered product, such as a glove or balloon. For a thicker-walled article, the special form should first be dipped into a solution of coagulant, such as acetic acid or calcium chloride. -Foam Formation. Three steps are involved in the for- mation of foam rubber: (1) air is blown into the latex; (2) a delayed-action gelling agent, sodium silicofluoride, is added to the frothy latex; and (3) molds are filled with the gelled foam prior to vulcanization.

Vulcanization Vulcanization is the chemical process whereby raw rubber is transformed into a finished product which is less susceptible to deterioration upon exposure to temperature extremes. Vulcanized rubber is characterized by "decreased plastic flow, less surface tackiness and increased tensile strength" (U.S. National Bureau of Standards).

16 This final step in the refining sequence involves the application of controlled heat to the formed rubber compound to which the vulcanizing agent has been added at an earlier stage (see Mixing). Time and temperature requirements depend on the type of rubber, the type of article being produced, and the performance specifications of the article. Vulcanization can be effected by a variety of methods, generally categorized as compression/injection molding, batch curing, and continuous vulcanizing. Each requires specialized machinery.

MARKETING ASPECTS

Grade

Special properties of rubber are listed below (Barlow, 1978, and Polhamus, 1962): -Elasticity: The stretching ability of the substance, and the forcible resumption of its original shape with the removal of the stretching force. This property is enhanced by vulcanization. -Green Strength: Resistance to breakage in handling. -Tack, or stickiness: The tendency among rubbers to merge or unite.

-Resistance to Abrasion: A by-product of rubber's ability to yield to deformation. -Plasticity: Susceptibility to and retention of deformation. This property of rubber permits it to be mixed, manipulated, and formed in its raw form. It is greatly reduced with vulcanization.

-Resistance to gases: Especially important in the manufacture of inner tubes. -Resistance to Oils and Chemicals: Important in the production of industrial hosing, insulation, gaskets, etc.

17 Until the advent of technically specified rubbers in the 1960s, rubber was graded according to a system of visual standards, in which lightness of color and the absence of bubbles, blemishes, and impurities were desirable characteristics. This system still prevails for sheet rubber and crepes. Block rubber is graded and guaranteed according to a series of rigorous technical tests determined to reflect considerations of importance to consumers. Its quality is specified on the basis of dirt retention, levels of ash, nitrogen, and volatile matter, plasticity retention (an indication of resistance to oxidation), viscosity, and color (Barlow, 1978).

Quality Control

Quality of processed natural rubber is initially determined prior to tapping on the basis of planting material, fertilizers, and stimulants. These govern drc, concentration of mineral elements, stability, and color of the field latex (Barlow, 1978). Upon tapping the potential for deterioration in quality increases: exposure to catalytic poisons results in contamination; over-washing of coagulum causes loss of natural antioxidants; the introduction of dirt darkens color; and bacterial contamination causes the appearance of bubbles which adversely affect the visual aspect. Field coagula and sheet rubber risk a decline in plasticity with exposure to sunlight. The danger of quality deterioration persists during storage and shipping, especially with prolonged exposure to low temperatures, such as those found in temperate countries during winter months. Increased viscosity or crystalization may result. In latex concentrate, quality control is directly linked to control of bacterial growth. Excessive bacteria counts increase the presence of volatile fatty acids, thereby impairing processibility.

Uses Because of its special properties rubber has numerous industrial applications. Foremost among them is the manufacture of

18 pneumatic , which in 1970 accounted for approximately 60% of all natural rubber consumed by industrial countries. (See Table 1.) A middle-grade ribbed smoked sheet (RSS 3) has been the standard kind of rubber used in tire production, but block rubber, especially that originating from field coagulum and remilled rubber, is now also widely used for this purpose. Rubber is the principal component of a variety of latex goods (e.g., condoms, latex thread), accounting for 10% of industrialized country rubber consumption. It is also used extensively in the manufacture of footwear. Table 1: Usage of Rubber by Major Products in the United States, Japan, and the EC, 1970. Source: Adapted from Wanigatunga (1983) All Natural NR NR share rubber rubber % of total NR of all rubber '000 tons percent Tire Passenger car 1,385 265 17.1 19.1 Heavy vehicle 962 502 32.3 52.2 Off the road 196 85 5.4 43.4 Bicycle/motorcycle 41 15 1.0 36.6 Aircraft 12 11 0.7 91.7 Tire rebuilding 215 43 2.8 20.0 Tubes 134 8 0.5 6.0 Flaps, etc. 55 9 0.6 16.4 SUBIOTAL, Tires 3,000 938 60.4 31.3 latex goods 472 153 9.9 32.4 Other Belting 113 46 2.9 40.7 Hose 110 17 1.1 15.5 Footwear 233 78 5.0 33.5 Cables 82 11 0.7 13.4 Unspecified 1,145 309 19.9 27.0 SUBTOTAL, Other 1,683 461 29.7 27.4 'ITAL 5.155 1,552 100.00 30.11

19 Substitutes

Many types of synthetic rubbers are available on the market, although seven principal kinds account for about 98% of the total tonnage consumed in the non-centrally planned economies (Grilli, et al, 1980). (See Table 2.) Of these, styrene-butadiene (SBR) comprises almost 60% of world consumption, and 40% of total rubber consumption. SBR, like polybutadiene (BR) and Polyisoprene (IR), is a general purpose rubber and is used predominately in the manufacture of tires.

Table 2: World Rubber Consumption, by Kind of Rubber, 1977. Source: Grilli (1980)

Thousands Percentage Percentage of of of Metric Synthetic Total Kind of Rubber Tons Rubber Rubber

Synthetic Rubber Styrene butadiene (SBR) 3,328 58.3 38.3 Polybutadiene (BR) 895 15.7 10.3 Polyisoprene (IR) 208 3.6 2.4 Ethylene-propylene 290 5.1 3.3 Polychloroprene (CR) 318 5.6 3.7 Butyl (HR) 386 6.8 4.4 Nitrile (NBR) 190 3.3 2.2 Other Synthetic 91 1.6 1.1

Total 5,706 100.0 100.0

Natural Rubber 2,984 --- 34.3

Total Rubber 8,690 --- 100.0

Note: Excluding centrally planned economies. Sources: International Institute of Synthetic Rubber Producers (HSRP), private communication, and International Rubber Study Group, Statistical Bulletin.

20 Technical factors based on the performance needs of the product and on process technology determine to a large extent whether synthetic or natural rubbers will be used. Natural rubber is superior in terms of adaptability to temperature fluctuations, low heat build-up, high strength, resilience, low crack growth, and overall versatility (Barlow, 1978, and Polhamus, 1962). Synthetic rubbers are advantageous in processing since they do not require mastication, and depending on the type of synthetic rubber, may be superior to natural rubber in resistance to oxidation, impermeability to gases, and resistance to oils and chemicals (Polhamus, 1962). In terms of price, until the mid-1970s, synthetics held a distinct advantage. But with the escalation of petroleum prices, synthetic rubber prices have been forced up, restoring the competitive edge to natural rubber in many cases. As of 1977, synthetic rubber accounted for almost two thirds of the non-centrally planned economies' total rubber consumption (Grilli, et al, 1980).

Characteristics of the Market

The diversity of marketing arrangements and contractual and corporate relationships in rubber marketing precludes generalization. However, physical rubber markets, where the rubber actually changes hands, are located in New York, London, Hamburg, Singapore, Kuala Lumpur, Tokyo, Kobe, and Colombo. Producers and/or their agents, and rubber dealers, which include representatives of transnational companies, participate in these markets.

Rubber markets are for the most part competitive.

Market Barriers

A study of tariff and non-tariff barriers to trade in the U.S., the EC, Sweden, and Japan showed tariffs on natural rubber to be nil (Takeuchi, 1979). Most processed rubber products are subject to effective protection rates below 10% (Ibid). (The important exception is footwear, the rates for which are substantially higher, e.g., in the U.S. the tariff on canvass shoes is 37.5%.) Furthermore,

21 many developing country rubber products are accorded special preferences. Non-tariff barriers such as quotas, safety regulation requirements for tires, and copyrights are not considered to be major impediments to trade. Shipping costs, especially relevant to tires destined for overseas markets, may impede market entry.

OTHER FACTORS

Location

Optimal location of a rubber processing plant is determined by proximity to sources of inputs: liquid latex, water, electricity, and fuels. Since latex from the rubber tree is unstable, i.e., prone to spontaneous coagulation, it must be processed as soon as possible after harvest in order to maximize production of higher-priced superior-grade rubbers. A processing plant should therefore be located near the estates or smallholdings which supply it with field latex. Large amounts of clean water are necessary for cleaning of the rubber during the milling and creping stages, while adequate supplies of electricity are needed for milling, creping, and drying.

Environmental Concerns

Water consumed in the processing of dry rubber is often obtained from and returned to nearby streams or rivers. Problems arise as a result of the organic material waste and uncoagulated latex contained in the discarded water. In Malaysia, for example, the rubber industry is a major source of organic pollution of water resources.

22 Effluents are typically a mixture of processing water, uncoagulated latex, proteins, sugars, lipids, caroteniods, and inorganic salts which provide a base for the proliferation of micro-organisms, leading to increased biological oxygen demand (BOD) (RRIM, 1979). Health problems arise with the introduction of pathogenic bacteria.

Proper treatment of effluents prior to their return to the river can minimize environmental disruption. Minimization of water consumption, improvements of the drainage system, installation of rubber traps, and the construction of biological ponds are recommended when a high proportion of organic matter is present in waste water (Ibid). In some rubber producing countries, including the two leading producers, Malaysia and Indonesia, effluent treatment is now mandatory, and commonly achieved by the use of biological ponds.

Plant Capacity

Plant capacity is largely determined by the availability of field latex. This in turn governs choice of process and output. In small-scale production, i.e., less than 10,000 lbs of output per day, sheet rubber processing is recommended because of its relative simplicity and lower cost. In sheet rubber production either of two basic systems can be employed: Hand-operated mangling machines or a sheeting battery. The former requires relatively less capital and more labor, and is recommended for production of 500 lbs/day or less. For 500-1000 lbs/day either system can be used, but for more than 1000 lbs/day, a sheeting battery is recommended (Teck, 1978). Because of its capital-intensive nature and resulting high initial investment requirements, a block rubber plant must normally process at least 10 tons/day to be financially viable (Pee, 1982). Even at this level of output, production costs per unit are higher than those for sheet rubber.

23 I I I BIBLIOGRAPHY

01. Arope, Ani bin, A.b. Mohd.Nor, and T.P. Hua (1983) Rubber Owner's Manual. Kuala Lumpur: RRIM.

02. Barlow, C. (1978) The Natural Rubber Industry: Its Development, Technology, and Economy in Malaysia. Oxford: Oxford University Press.

03. Blow, C.M. and C. Hepburn (Eds) (1982) Rubber Technoloqy and Manufacture. London: Butterworth Scientific.

04. Cameroon Development Corporation (1976) CDC Development Programme: Part I - Kompina Rubber Prolect: Fascicle III Annexes. Cameroon: Ministry of Economic Affairs and Planning.

05. FAO (1977) and Processing Review: Papua New Guinea: Prolect Findings and Recommendations. Rome: FAO. Rept. No. AG:DP/PNG/75/004.

06. Green and Collier Pte. Ltd. (1978) The Rubber Market: A Brief Guide. Singapore: Green and Collier Pte. Ltd.

07. Grilli, E., B. Bennett Agostini, and M. 't Hooft-Welvaars (1980) The World Rubber Economy: Structure, Changes, Prospects, World Bank Occasional Papers, No. 30. World Bank: Washington, DC.

08. Hassan, Halim (1978) Rubber Market. IN: R.R.I.M. Course on Estate Management. Kuala Lumpur: Rubber Research Institute of Malaysia.

09. Heinisch, K.F. (1974) Dictionary of Rubber. New York: Halsted Press.

10. Ibrahim, Ahmad (1979) Treatment of SMR Factory Effluent. IN: RRIM Traininq Manual on Natural Rubber Processinq. Kuala Lumpur: Rubber Research Institute of Malaysia.

11. Kadir, M.A.(1981) Structure and Outlook of the Rubber Pro- cessing Industry in Malaysia. The Planter: 57(668): 660-668.

24 12. Malaysia Rubber Fund Board (1966) Heveacrumb: A Standard Malaysia Rubber in a New Form. National Rubber Technical Bulletin: No. 10, R.R.I.M.

13. Ng, E.K. and T.Y. Pee (1977) Innovations in Natural Rubber Technology: Some Malaysian Lessons. Teaching and Research Forum, No. 9, The Agricultural Development Council, Inc. 14. Pee, T.Y. and Ani bin Arope (1976) Rubber Owners' Manual 1976: Economics and Management in Production and Marketing. Kuala Lumpur: Rubber Research Institute of Malaysia.

15. Pee, T.Y. (1982) Supply and Cost Prices of Rubber Produc- tion. World Bank Division Working Paper No. 1982-3. World Bank: Washington, DC. 16. Pee, T.Y. (1982) Technical Innovations in Natural Rubber. World Bank Division Working Paper no. 1982-4. World Bank: Washington, DC. 17. Polhamus, L. (1962) Rubber: Botany. Production, and Utilization. London: Leonard Hill Ltd. New York: Interscience Publishers, Inc. 18. Rubber Research Institute of Malaysia (1979) RRIM Training Manual 1976: Economics and Management in Production and Marketing. Kuala Lumpur: Rubber Research Institute of Malaysia. 19. Smit, H.P. (1982) The World Rubber Economy to the Year 2000: Its Prospects and the Implications of Production Policies on Market Conditions for Natural Rubber. Alblasserdam: Offsetdrukkerij Kanters B.V. 20. Swift, P.M. (1982) Competition Between Natural and Synthetic Rubbers. Unido: Rept. No. LD/WG.368/2. 21. Takeuchi, K., C. Chung, and J. Chhabra (1979) Export Oriented Processing of Primary Commodities in Developing Countries. Washington, DC: The World Bank.

25 22. Tan Ah Seng, Mohd; Ali Awang; and Cheong Sai Fah (1981) Preparation of Free-Flowing NR Crumbs. The Planter, 57(664): 356-360. 23. Teck, Ong Chin (1978) Factory Planning and Organization. IN: R.R.I.M. Course on Estate Management and Planning. Kuala Lumpur: Rubber Research Institute of Malaysia. 24. Wanigatunga, R.C. (1983) Processing of Natural Rubber in South Asian Countries for the Export Market. IN: The World Bank's Case Studies on Industrial Processing of Primary Products. Volume I. London: Common Secretariat Washington, DC: The World Bank. 25. World Bank, East Asia and the Pacific Projects Dept., (1973) Appraisal of Smallholder Development Project, North Sumatra, Indonesia. Washington, DC: World Bank.

26 I ANNEX I:

EXAMPLES OF INVESTMENT AND OPERATING COSTS i .~ ~~~~ ~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ RUBBER PROCESSING EXAMPLE 1 Page 1 of 3

Representative Investment and Operating Costs

SHEET RUBBER FACTORY ______Establishment of a 10 ton dry rubber content/day sheet rubber factory.

COUNTRY: Indonesia

NOTE: These data are intended as indicative only, and are unique to the time, circumstance, and country of the identified investment. Their applicability to other situations may vary considerably.

Annual Full Development Production:

3400.0 tons

Capacity Utilization at Full Development: not available

US$ '000 1984 prices Total I. Investment Costs: ______Site Preparation 17.1 Buildings factory & product godown (2500 m2) 250.0 smokehouse (1280 m2) 128.0 power house 3.0 workshop 3.0 pump house 2.4 other 1.6 Sub-Total Buildings 388.0 . - Loading Ramp 15.0

(Continued on Page 2) RUBBER PROCESSING EXAMPLTE 1 Page 2 of 3

Representative Investment and Operating Costs

NOTE: These data are intended as indicative only, and are unique to the time, circumstance, and country of the identified investment. Their applicability to other situations may vary considerably. US$ '000 1984 prices Total Investment Costs (cont'd) ______Machinery & Equipment latex reception tanks & stirrers 20.0 latex strainer & sieves 2.5 acid tank & stirrer 3.7 coagulation tank 200.3 latex/coagulum chute 17.3 sheeting battery 41.6 wooden platforms 1.5 sheet cutting drum + knives 0.5 smokehouse bogies 112.0 rails 34.6 turn tables 9.0 sorting tables 1.1 weighing scale 3.8 baling press 26.6 press base & planks 14.3 process piping 2.4 electrical installations 7.0 ancillaries 17.0 laboratory 3.0 workshop 10.0 Sub-Total Machinery & Equipment 527.9 Water Supply 50.0 Power Supply 38.0 Rubber Trap & Effluent Pond 25.0 Erection & Commissioning 40.0

Total Investment Costs 1101.0 RUBBER PROCESSING EXAMPLE 1 Page 3 of 3

Representative Investment and Operating Costs ------NOTE: These data are intended as indicative only, and are unique to the time, circumstance, and country of the identified investment. Their applicability to other situations may vary considerably.

US$ '000 1984 prices Total II. Annual Full Development Operating Costs: (excluding raw materials) ------Variable Costs production labor 54.4 materials 28.9 fuel 20.4 power 10.2 packing 30.6 Sub-Total Variable Costs 144.5

Fixed Costs overheads 51.0 management staff 13.6 maintenance 6.8 depreciation 136.0 Sub-Total Fixed Costs 207.4

Total Operating Costs 351.9

DATA SOURCE: Adapted from Special Team for Estate Crop Development, Government of Indonesia publication "Rubber Processing Facilities for Agricultural Projects in Indonesia: A Critical Review", November, 1984. NOTES: Exchange rate - Rp 1000 = US $ 1.00 Details on foreign/local cost breakdowns not presented in the report. Data are net of contingencies. Annual production based on assumption of 340 operational days/year Capacity utilization at full development is dependent upon supply of latex available. I RUBBER PROCESSING EXAMPLE 2 Page 1 of 3

Representative Investment and Operating Costs

CRUMB RUBBER FACTORY FOR HIGH GRADE LATEX RUBBER

Establishment of a 20 ton dry rubber content/day crumb rubber factory.

COUNTRY: Indonesia

NOTE: These data are intended as indicative only, and are unique to the time, circumstance, and country of the identified investment. Their applicability to other situations may vary considerably.

Annual Full Development Production: ------6800.0 tons

Capacity Utilization at Full Development: not available

US $ '000 1984 prices Total I. Investment Costs:

Site Preparation 11.8 Buildings factory & product godown 307.6 & latex reception crepe shed 4.0 power house 16.0 laboratory 14.0 pump house 12.0 other 8.6 Sub-Total Buildings 362.2 Loading Ramp 18.0

(Continued on Page 2) RUBBER PROCESSING EXAMPLE 2 Page 2 of 3

Representative Investment and Operating Costs ------

NOTE: These data are intended as indicative only, and are unique to the time, circumstance, and country of the identified investment. Their applicability to other situations may vary considerably. US $ '000 1984 prices Total Investment Costs (cont'd) ______Machinery & Equipment latex reception tanks & stirers 30.0 latex strainer & sieves 0.8 acid tank & stirrer 24.0 coagulation trough 36.0 crusher 17.0 water trough for crusher 3.0 crepers 53.0 belt conveyor 6.0 shredder + water trough 21.0 dryer (one ton drc/hr) 110.0 press 17.0 working table 0.3 weighing scale 3.0 electrical installation 15.0 laboratory 100.0 workshop 20.0 Sub-Total Machinery & Equipment 456.0 Water Supply 60.0 Power Supply 210.0 Road Weighbridge 37.0 Ammonia Gas 5.8 Fork Lift 23.0 Rubber Trap & Effluent Pond 85.0 Erection & Commissioning 40.0 Total Investment Costs 1308.8 RUBBER PROCESSING EXAMPLE 2 Page 3 of 3

Representative Investment and Operating Costs ------NOTE: These data are intended as indicative only, and are unique to the time, circumstance, and country of the identified investment. Their applicability to other situations may vary considerably. US $ '000 1984 prices Total II. Annual Full Development Operating Costs: (excluding raw materials) ------Variable Costs production labor 28.6 materials 50.3 cost of analysis 20.4 fuel 74.8 power 81.6 packing 122.4 Sub-Total Variable Costs 378.1

Fixed Costs overheads 68.0 management staff 13.6 maintenance 27.2 depreciation 141.4 Sub-Total Fixed Costs 250.2

Total Operating Costs 628.3

DATA SOURCE: Adapted from Special Team for Estate Crop Development, Government of Indonesia publication Rubber Processing Facilities for Agricultural Projects in Inodnesia: A Critical Review", November, 1984. NOTES: Exchange rate - Rp 1000 = US $ 1.00 Details on foreign/local cost breakdowns are not presented in the report. Data are net of contingencies. Annual production based on assumption of 340 operational days/year. Capacity utilization at full development is dependent upon supply of latex available. iI RUBBER PROCESSING EXAMPLE 3 Page 1 of 3

. Representative Investment and Operating Costs ------

CRUMB RUBBER FACTORY

Establishment of a 30 ton dry rubber content/day crumb rubber factory.

COUNTRY: Cameroon

NOTE: These data are intended as indicative only, and are unique to the time, circumstance, and country of the identified investment. Their applicability to other situations may vary considerably.

Annual Full Development Production (tons): ------10200.0

Capacity Utilization at Full Development: not available

US $ '000 1984 prices Total I. Investment Costs: ______Site Preparation 149.6 Buildings weighbridge, boiler house, other 50.0 metallic sheds 429.2 foundations, slabs, conduits 176.2 Sub-Total Buildings 655.4 Utilities (electricity and water) 156.5

(Continued on Page 2) RUBBER PROCESSING EXAMPLE 3 Page 2 of 3

Representative Investment and Operating Costs ------

NOTE: These data are intended as indicative only, and are unique to the time, circumstance, and country of the identified investment. Their applicability to other situations may vary considerably.

US $ '000 1984 prices Total

Machinery & Equipment bulking tanks 16.9 coagulating concrete tanks 49.2 circular tanks 4.6 laboratory 50.0 fuel tank 57.3 fork lift 25.0 boiler & installation 105.8 platform scale 25.0 pumps 30.6 saws, granulators, scrubbers 119.2 shredder, leacher 32.7 compressor 38.5 dryers 240.4 scale, press 50.0 bulking tank agilators 12.7 siere & prenumatic transporter 15.4 other 41.9 Sub-Total Machinery & Equipment 915.2 Equipment Installation 67.7 Engineering and Supervision 250.2

Total Investment Costs 2351.2 RUBBER PROCESSING EXAMPLE 3 Page 3 of 3

Representative Investment and Operating Costs ------NOTE: These data are intended as indicative only, and are unique to the time, circumstance, and country of the identified investment. Their applicability to other situations may vary considerably.

US $ '000 1984 prices Total II. Annual Full Development Operating Costs: (excluding raw materials) ------Variable Costs production labor 264.5 chemicals 201.7 grading 6.9 fuel 340.6 power 142.5 packing 197.4 Sub-Total Variable Costs 1153.7 Fixed Costs insurance 27.9 maintenance 182.3 Sub-Total Fixed Costs 210.2

Total Operating Costs 1363.9

DATA SOURCE: Adapted from World Bank project files for the Cameroon Second HEVECAM Rubber Project, Mission Report on HEVECAM Rubber Processing Study April/October 1981 (investment costs) and Mission report on HEVECAM Rubber Processing Costs. NOTES: Exchange rate - CFAF 260 = US $ 1.00 for investment costs and CFAF 292 = US $ 1.00 for operating costs. Details on foreign/local cost breakdowns are not presented in the report. Data are net of contingencies. Annual production based on assumption of 340 operational days/year. Capacity utilization at full development is dependent upon supply of latex available. I I A v

ANNEX II:

CONVERSION TABLES

X

. .

lb

a I I WEIGHTS AND MEASURES avoirdupois

Ton: short ton 20 short hundredweight, 2000 pounds; 0.907 metric tons; long ton 20 long hundredweight, 2240 pounds; 1.016 metric tons. Hundredweight cwt; short hundredweight 100 pounds, 0.05 short tons; 45.359 kilograms; long hundred weight 112 pounds, 0.05 long tons; 50.802 kilograms. Pound lb or lb av; also #; 16 ounces, 7000 grains; 0.453 kilograms. Ounce oz or oz av; 16 drams, 437.5 grains; 28.349 grams. Dram dr or dr av; 27.343 grains, 0.0625 ounces; 1.771 grams. Grain gr; 0.036 drams, 0.002285 ounces; 0.0648 grams.

Troy Pound lb t; 12 ounces, 240 pennyweight, 5760 grains; 0.373 kilograms. Ounce oz t; 20 pennyweight, 480 grains; 31.103 grams. Pennyweight dwt also pwt; 24 grains, 0.05 ounces; 1.555 grams. Grain gr; 0.042 pennyweight, 0.002083 ounces; 0.0648 grams. METRIC SYSTEM

Square kilometer sq km or km2; 1,000,000 square meters; 0.3861 square mile.

Hectare ha; 10,000 square meters; 2.47 acres.

Hectoliter hl; 100 liters; 3.53 cubic feet; 2.84 bushels;

Liter 1; 1 liter; 61.02 cubic inches; 0.908 quart (dry); 1.057 quarts (liquid).

Deciliter dl; 0.10 liters; 6.1 cubic inchs; 0.18 pint (dry); 0.21 pint (liquid).

Centiliter cl; 0.01 liters; 0.6 cubic inch; 0.338 fluidounce.

Metric ton MT or t; 1,000,000 grams; 1.1 US tons.

Quintal q; 100,000 grams; 220.46 US pounds.

Kilogram kg; 1,000 grams; 2.2046 US pounds.

Gram g or gm; 1 gram; 0.035 ounce. I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I

a .I

I 4