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Carbon Black Shortage Affects Indian Rubber Industry’s Economic Growth

Monday, June 04, 2018
By Dominic Rebello

The 6 billion dollar Indian Rubber Industry is planning its 10th Indian Rubber Expo 2019 roadshow across 15 cities in India to spread awareness, opportunities, while also bringing together industry professionals on one platform to highlight innovative solutions, business opportunities and changing market trends, said Vikram Makar, Chairman, Indian Rubber Expo (IRE) 2019.

“India Rubber Expo 2019 will see some of the biggest names in the industry come under one roof. With a ready-made market, and the value-addition
India provides, it has everything for the sector to grow including entrepreneurial ecosystem and a robust physical infrastructure. The industrial ecosystem in India is the obvious consumer for next generation production technologies that will be on display. However, MSMEs and SMEs are mosty affecdted by the rising petroleum prices, which are causing severe inflation in Polymers side and demand for more working capital as banks are becoming extremely tight in lending due to the volatility of the Indian Rupee -- which is depreciating to the US dollar–based crude oil prices badly affecting the rubber industry, “ Makar said.

Describing the shortage of “Carbon Black” which is essential in manufacturing rubber, he said the present scenario is witnessing demand beyond supply capacity, and the ground reality is that there is no tangible capacity expansion for carbon black except for an announcement of one such player starting a new plant in South India.

“Although carbon black is a just the end byproduct of petroleum from crude oil, its prices in India are still at a premium due to the anit dumping duty imposed by the government. After imposing anti dumping duty, the government should monitor the same. The government should source the gap with the availability of raw materials, Makar added.

“The Government is envisioning 8% to 10% growth in the rubber industry, but how will this happen if there is no related material supply availability? There is strong pressure on the non-tyre segment, which will lead to unemployment,” Makar said while emphasizing that “The Government Ministries of Finance, Commerce & Industry, Petroleum & Chemicals need to study the ‘lacunae and loopholes’ in this regard, besides formation of a transparent, fast-track mechanism that will look at the rubber industry’s relevant upstream and downstream issues and solutions.”

Vishnu Bhimrajka, Chief Convenor IRE 2019, said, “Anything affecting crude oil affects the related industry including raw materials for rubber production. India needs synthetic rubber and the Indian Government is quite proactive in this regard, while Reliance has one synthetic rubber plant and plans to set up another such plant. “Ultimately, the Government has to contemplate whether they want to protect MSMEs and SMEs like us which require large quantities of carbon black and rubber to support India’s economic growth in meeting the critical needs of industry sectors like automobile, railways, defence etc.”

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