• Start of a great idea


    Ben D. Kritz

    THE Department of Agriculture this week disclosed that it is in the final stages of discussions with a Finnish technical firm to develop a tire manufacturing plant in North Cotabato, which is one of the prime rubber growing areas of the Philippines.

    In an atmosphere in which most of the news is dominated by out-of-control police, political infighting, and futile attempts to analyze the contradictory statements of the current staff of Malacañang, the DA’s tire manufacturing project is a rare bit of progress, and worthy of more attention than it has gotten.

    Unless the discussions between the DA and the Finnish firm, Black Donuts Engineering, inexplicably fall apart, Agriculture Secretary Manny Piñol said that the signing of a memorandum of agreement that will initiate a feasibility study is scheduled for February 7.

    The DA’s role, at least as Piñol explained it in his statements, is to serve as the go-between for the rubber farmers, who will have to organize themselves into some sort of cooperative that will have an ownership stake and manage the plant, and the technical assistance. Black Donuts does not manufacture the tires, but designs and builds manufacturing facilities and equipment, and provides technical consultation.

    Although the Philippines is the world’s sixth-largest rubber producer, it is dwarfed by Thailand and Indonesia, which each produce about two million metric tons of natural rubber per year to the Philippines’ 400,000 or so.
    Nevertheless, that is still significant enough to make a value-added project like this viable, particularly given the sizable trade imbalance in rubber: The Philippines exports about 85 percent of the raw rubber it produces, and imports almost all of its rubber products. In value terms, imports outweigh exports by almost four to one, $311 million versus $79 million in 2014, the most recent statistics provided by the DA. Making use of the raw materials here to produce something that would otherwise be imported will help reduce that particular trade deficit.

    If the idea progresses as envisioned, and at this point, there’s no obvious reason why it wouldn’t or shouldn’t, it will be a boon to the country in general, and to some of the most depressed areas in Mindanao in particular.

    But instead of considering it an achievement on its own, the plan ought to be considered the first step in a much larger strategy.

    Even though tires are based on a renewable resource—rubber trees in Mindanao’s climate only take about six years, sometimes less, to become productive—tires are not particularly environmentally friendly. If the manufacturing target of four million tires per year is reached, that means up to half that amount, or about two million tires, are going to be discarded every year. The next thing the DA should do—in conjunction with agencies like the Department of Environment and Natural Resources and the Department of Science and Technology is address the waste problem.

    Tires can be recycled and used as ingredients in various construction materials, such as a form of asphalt for paving roads and roof coverings. They can be recast into other rubber products, such as hoses. And although the process is rather complex and expensive, they can even be broken down to extract a sort of synthetic fuel. Applying the same approach to “making tires disappear” as has been applied to devising a way to create them would roughly double the impact of the tire manufacturing plan by creating one or more additional industries.

    Although the DA should be complimented on what it has done to boost the domestic rubber sector with the tire manufacturing project, the work is incomplete; the “road map” should lead all the way to the end of the product’s life. That kind of broad, long-range thinking, however, has always been rare here, which is why many grand government concepts are either disappointing, or never get off the ground.

    The tire manufacturing plan is not a destination, but a waypoint—a good idea, perhaps, but more significant as the start of a potentially better one. If the current bureaucracy can recognize that and act accordingly, it will legitimately distinguish itself as being a substantial “change” from the typical way development is pursued in this country.



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