Chinese investors eye tire production, rubber processing

Published on 12/03/2024 at 11:00 GMT+7
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The Indonesian Rubber Association (Gapkindo) has revealed that the potential investment from China in the rubber processing sector is significan amid the decline in crumb rubber production.

The domestic market potential offers hope for the industry currently pressured by declining export demand. Rubber exports decreased from 2.08 million tons in 2022 to 1.76 million tons by the end of 2023. In terms of export value, natural rubber exports are projected to reach US$2.51 billion in 2023, down from US$5.58 billion in 2017. This is due to fluctuating and weakening rubber prices, which averaged US$4.5 per kilogram (kg) in 2011 but now hover around US$1.2 per kg.

"In terms of investment, we hope for an improvement in global rubber prices," Gapkindo's Deputy Executive Director Uhendi Haris said.

It is worth noting that Chinese investors are exploring potential partnerships with local entrepreneurs, including plans in the Indonesian tire and rubber sectors. Delegations from Shandong, China, attending a conference with the Coordinating Ministry for Maritime Affairs and Investment, expressed interest in exploring investment opportunities in Indonesia's rubber and tire sectors.

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