THE Department of Agriculture (DA) is “finalizing its talks” with a Finnish tire technology firm to build a tire manufacturing plant in North Cotabato to boost the Philippine rubber industry, it said in a statement this week.
Agriculture Secretary Emmanuel F. Piñol said he and other officials of the DA would be meeting with executives of the Black Donuts Engineering Co. of Finland to discuss the scope and the details of an initial feasibility study.
“Our (DA) role here is to organize the rubber tree farmers into a cooperative where they will be formed into a corporation that will operate the tire manufacturing company,” Piñol said.
The signing of an agreement to proceed with the feasibility study is scheduled for February 7, he added.
The field study will be based on a target of producing four million tires per year, Piñol explained. The entire project from feasibility study to the start of production is expected to take about three years.
Black Donuts Engineering is based in Finland and specializes in tire manufacturing technology, up to and including the design and construction of entire factories. The company does not, however, produce tires on its own.
Agriculture secretary Piñol said the tires produced in Mindanao would be under the Agila Tires brand.
An official of Black Donuts declined to comment on the Mindanao project before the signing of an agreement, but suggested it was a good opportunity.
“Our passion is to build turnkey greenfield tire plants,” Black Donuts Vice President Keijo Ylitalo said in an email. “We focus on those projects that can make a difference in efficiency, quality, and environmental friendliness, and most of all in profitability.”
Ylitalo added, “It’s our knowledge of the big picture that adds value to the customer.”
North Cotabato is one of the biggest producers of rubber in Mindanao, which accounts for more than 90 percent of the Philippines’ annual production. About 85 percent of the Philippines’ rubber is exported, with the remainder being taken up by local manufacturers, most notably Yokohama Philippines.
In 2014, Philippine rubber exports amounted to $79 million, while imports of finished rubber products reached $311 million.
According to the most recent statistics posted by the DA, annual raw rubber production in the Philippines is about 400,000 metric tons. Thailand and Indonesia are the top rubber producers in the world, with annual production of more than 2.1 million and 1.7 million metric tons, respectively.
Currently, the Philippines is the world’s sixth-largest producer of natural rubber. Most of the dried latex is exported to Malaysia, according to the agriculture secretary.
Piñol also said that the project would include the construction of a hydroelectric plant in President Roxas town to provide reliable power to the future tire factory.