Finland Firm To Build $200 Million Rubber Tire Manufacturing Plant In Mindanao
A Finnish company is targeting to
put up a $200-million rubber tire manufacturing plant in Mindanao in the next
two years to boost the country’s local production, the Department of
Agriculture (DA) said.
DA-attached agency Philippine
Rubber Research Institute (PRRI) said tire manufacturer Black Donuts
Engineering Inc. from Finland are eyeing the construction of a 50-hectare
rubber manufacturing plant in Davao.
Agriculture Secretary Emmanuel F.
PiƱol meets with Black Donuts Engineering President and CEO Kai Hauvala and
Sales Director Tomi Pekkola for a possible partnership on the construction of a
processing and manufacturing facility in Mindanao.
“We have a potential investor from
Finland who is planning to put up an investment in manufacturing plant for
rubber tires,” PRRI Executive Director Rodolfo Galang told reporters in a
chance interview Tuesday, January 10.
The said project, once approved, is
expected to fully operate after 2 years and produce around four to five million
tires annually.
“They have set the timeline of two
years and if the assessment would turn out positively, they would put up the
investment,” he added.
One tire averages 10 kilograms and
is composed of 40 percent natural rubber. This would translate to about 16,000
metric tons (MT) more of rubber to be planted and produced annually.
Black Donuts Company will also help
in the construction, operation, and capability enhancement and training of
farmers.
Furthermore, the tire company would cater to domestic consumption for the production of tires for cars, pick-up
trucks and other small vehicles.
Galang said the private company
will visit Davao for an ocular inspection of possible land and plant areas.
“We have enough requirement which
is 110,000 metric tons a year. Domestic consumption is around 30,000 metric tons
while the rest is for export,” he added.
Galang emphasized that the Finnish
company targeted Davao to be the potential area considering its economic value
for agriculture and trade.
“Davao is becoming the center of
Mindanao. They have the port, the airport, they have a lot of flights,” he
said.
Data from the Philippine Statistics
Authority (PSA) showed that of the total production, majority comes from Zamboanga
Peninsula and the Socsargen.
Currently, there are only 25
manufacturing and processing plants nationwide, majority of which are allotted
for tires production.
Galang said the country’s
P12-billion rubber industry remains to be underdeveloped compared to other
Association of Southeast Asian Nations countries such as Thailand and Malaysia.
This is due to the inadequate
supply of quality planting materials deterring efforts in production expansion,
low productivity and poor handling resulting in low-quality rubber.
Galang added that poor rural
infrastructures, less investments from private and public sectors and lack of
marketing and promotional initiatives in the global market also affect the
lagging performance of the country’s rubber industry.
Finland Firm To Build $200 Million Rubber Tire Manufacturing Plant In Mindanao
Reviewed by Yen
on
January 11, 2017
Rating:
That is a BOT or Build-Operate-Transfer scheme, which means that the Finland group will spend for everything, operate it for a number of years (15 to 25 years maybe), then turn it over to the government after it has recouped it's investments and made some profit. BOT schemes usually involves th e government to guarantee the loans of the proponent (in this case, the Finland group) and also to guarantee the income of the factory. That is why BOT schemes are usually in expressways, LRT and the like, where there is a sure market and income. In this instance, how will the government guarantee a good market share for the factory? Will the government tax the other local manufacturers (which are 60% owned by Filipinos, BTW, although the brand name is foreign)? Will the government compel government vehicles to use only Pilipinas Tires? I'm not sure if this will push through as it is right now. so many problems to iron out. Hope it does push through, without destroying other manufacturers which are majority Filipino owned too.
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