- Published: 11/02/2011 at 03:28 PM
- Online news:
Skyrocketing rubber prices have triggered a rush to plant rubber trees.
Photo above of rubber tapping from Wikimedia Commons.
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CP keen on tapping rubber market: Output destined for Japanese tyre maker by Walailak Keeratipipatpong
A bullish rubber market has encouraged CP Group to beef up its rubber business with fresh investment in the mid-stream industry to supply products for the tyre business of Japan's Marubeni Corporation.
Montri Congtrakultien believes the CP Group can profit from the rush to own rubber plantations amid higher prices for the commodity. The group expects to sell 600,000 rubber saplings to farmers this year.
The first plant, to be built this year with a capacity to make 20,000 tonnes of block rubber a year for use in the tyre industry, is expected to be located in the new rubber production sites of the North or Northeast
"We'll gradually open factories near farm sites that grow our para rubber breeds," said Montri Congtrakultien, CEO of the Crop Integration Business Group (CPS).
The company will also introduce a newly developed tapping device that allows planters to tap even during rainy season and obtain higher-quality latex.
CPS, a unit of Charoen Pokphand Group, has been enjoying the current skyrocketing prices of rubber and palm oil, two businesses it started a few years ago.
It is upbeat that sales of rubber and oil palm saplings will each increase to 600,000 units this year, higher than last year's sales of 450,000 and 400,000 units respectively.
Prices for both crops are rising so high farmers may be unsure about which crop to plant.
Prices of palm nuts rose to an average of 9.27 baht a kilogramme last month, up from 4.15 baht last year. Prices of smoked sheet rubber rose to an average of 160 baht/kg in January, from 109 baht in 2010.
Strong fuel prices and recent natural disasters were the main causes for the price increases.
"If farmers want my advice, I would suggest going for rubber since the cultivation of palm oil requires a large volume of water," said Mr Montri.
Though rubber prices should cool in a few months due to seasonal conditions, he is confident the company's rubber breed - JVP80 - would produce higher yields to offset price dips. Even as the price for its saplings has increased by over 70% to 80 baht a piece, orders are accelerating with the delivery date for orders today sometime in July and August.
The rush to grow rubber has resulted in critical shortages of saplings, pushing up prices.
In addition to the government's programme to add 800,000 rai of rubber plantations over the next three years, individual expansion is also prominent. Mango growers from the company's contracted orchards have demanded the company turn about 1,000 rai in Ratchaburi and Chon Buri to rubber plantations as some types of mango are not profitable.
"The craze to own rubber plantations has been spreading, even executives of CP Group have made investments in the crop," he said.
The crop is expected to fetch 2.5 billion baht in sales revenue this year, up from 2.2 billion in 2010.
Hybrid rice seed, farm machinery and clean energy through gasification systems are also core income contributors.
Anek Silapapun, executive vice-president of the group, said a new hybrid rice seed that is resistant to plant disease as well as drought was being developed to suit a warmer climate. It would enable rice to endure temperatures up to 35 Celsius. Last year CPS started selling its 304 hybrid rice seed, with yields averaging 1,000 kg per rai, more than double the local average, to trial farms.
Sales will increase to 600 tonnes this year from 100 tonnes the year before.
(Source: Bangkok Post, CP keen on tapping rubber market, Output destined for Japanese tyre maker, 10/02/2011, Walailak Keeratipipatpong, link)
rubber - a highly elastic substance used to cushion blows (See Wikipedia on natural rubber from trees and synthetic man-made rubber and rubber standards at UNCTAD)
elastic - a material that stretches easily and returns to its original shape quickly (See Wikipedia in physics and deformation)
cushion a blow - reducing the force of one thing hitting another thing (example: the rubber bumpers on the front and rear of the bus reduce damage if the bus hits something)
keen - very interested, eager or wanting (to do) something very much สนใจ, ใจจดใจจ่อ สนใจอย่างยิ่ง
bullish - belief that the stock market or the economy is going to get better in the near future
encouraged - created more confidence or hope about something มีกำลังใจ
CP Group - Charoen Pokphand Group, the largest business conglomerate in Thailand (See Wikipedia)
conglomerate - a large company that joins together many companies with different business activities (See Wikipedia)
beef up - strengthen and improve
investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
fresh investment - new investment
mid-stream industry - companies that produce some intermediate product
intermediate product - goods used as inputs in the production of other goods, such as partly finished goods (repeated until a good is eventually used in the production of final goods) (See Wikipedia)
Marubeni Corporation - one of the largest general trading companies in Japan (See Wikipedia)
trading company - (Sogo shosha, 総合商社) a type of business unique to Japan, trading a wide range of products and materials, also have historically acted as investment banks and private equities (See Wikipedia)
profit - money that you make from selling goods and services after all your costs have been paid กำไร
rush - to move or do something very quickly รีบเร่ง, วิ่ง
plantations - large farms with many workers growing commodity crops such as rubber, sugar, or coffee
saplings - young trees ต้นอ่อน
capacity - the ability to do something, the amount that a factory or plant could produce if all the equipment was in use all the time ความสามารถในการทำงาน ความสามารถในการ (ผลิต)
block rubber - a common form in which rubber is sold see "rubber standards" under "rubber" above)
expected - believe will happen คาดว่า (จะเกิดขึ้น)
para rubber - a species of rubber tree (Hevea brasiliensis) that "is of major economic importance because its sap-like extract (known as latex) can be collected and is the primary source of natural rubber" (See Wikipedia)
breeds - particular types of plants พันธุ์
tap - rubber tapping, tap rubber from tree, drain the rubber from a tree (See Wikipedia)
tapping device - the instrument that pierces aa tree and allows the rubber to be drained out of the tree
instrument - a tool or equipment used to do some task เครื่องมือ,อุปกรณ์
device - a machine or piece of equipment that does a particular job อุปกรณ์ เครื่องมือ เครื่องจักร
planters - farmers who plant and grow crows เกษตรกรผู้ปลูกพืชไร่
latex - natural rubber, a milky white sap found in many trees, used in surgical gloves, condoms, and clothing (See Wikipedia on latex and rubber and Indonesian Rubber Board)
Charoen Pokphand Group - Same as "CP Group" (long form)
current - of the present time ปัจจุบัน
skyrocketing - increasing to very high levels very suddenly and quickly (like a rocket shooting into the sky)
upbeat - happy and positive because you are confident that you will get what you want มีความหวัง
smoked sheet rubber - Same as "ribber smoked rubber sheets (RSS)"
ribbed smoked rubber sheets (RSS) - natural rubber in sheet form, used especially in tires for cars and trucks, the oldest and the most popular type of rubber, the simplest and easiest to produce on a small scale by small farmers (See All About Rubber glossary)
fuel - a substance such as oil, gas, coal, or wood producing energy (heat, power) when burned เชื้อเพลิง, เชื้อไฟ (See Wikipedia)
natural - found in nature (not made in a factory by humans) ตามธรรมชาติ
natural disaster - when some event in nature causes harm to large numbers of humans, events include earthquakes, volcanic eruptions, tsunamis, floods, storms, droughts, fires, epidemics, and insect infestations, meteors from outer space (See Wikipedia) ภัยธรรมชาติ
cultivation - growing plants
volume - the quantity or amount of something
cool - become less changing (less volatile), calm down and stop moving
confident - being certain of your abilities or of having trust in people, plans, or the future มั่นใจ
breed - raise animals for the purpose of producing more animals เพาะเลี้ยง
yields - how much crop a farmer gets from farming one hectare of land ผลผลิต
offset - move in the opposite direction, reduce by moving in the opposite direction, counter-balance, compensate in the opposite direction ("x offsets y" means "x reduces the effect of y"), make up for (profits from the manufacturing business offset losses from the retail business) (See glossary)
dip - go down a little bit
offset price dips - go up after going down a little bit (so no change)
accelerating - happening at a faster rate เร่งให้เร็วขึ้น
critical - very important, very serious and dangerous, a future situation will be affected by it สำคัญยิ่ง, ที่ชอบจับผิด, อย่างรุนแรง อย่างวิกฤต
shortages - when there are not enough goods for people to buy การขาดแคลน
craze - something that becomes very popular for a short period of time, a fad, a quickly passing fashion ความนิยม (ในช่วงระยะสั้นๆ)
expansion - when something increases in size, number or importance การขยายออก
prominent - important and very noticeable
contracted - work to be done under an arrangement and agreement (here under "contract farming")
contract farming - when a farmer produces agricultural products for a company under a contract with a fixed price (See Wikipedia)
executives - a high level manager in a company (making plans and ensuring they executed successfully) ผู้บริหาร
fetch - to be sold for a particular amount of money ขายในราคาหนึ่ง
revenue - income from taxes or business activities รายได้
hybrid - an animal or plant that is bred from two different types (species) พันธุ์ผสม หรือลูกผสม
seeds - the many small hard objects produced by plants that can grow into a plant of the same type เมล็ด, เมล็ดพืช, เมล็ดพันธุ์
clean energy - environmentally friendly sources of power and energy with reduced emissions of carbon dioxide, also known as ""sustainable energy" or "energy that meets the needs of the present without compromising the ability of future generations to meet their needs. Sustainable energy sources are most often regarded as including all renewable sources, such as plant matter, solar power, wind power, wave power, geothermal power and tidal power. It usually also includes technologies that improve energy efficiency" (See Wikipedia)
gasification - a way to extract energy from organic material, "a process that converts carbonaceous materials, such as coal, petroleum, biofuel, or biomass, into carbon monoxide and hydrogen by reacting the raw material at high temperatures with a controlled amount of oxygen and/or steam. The resulting gas mixture is called synthesis gas or syngas and is itself a fuel" (See Wikipedia)
core - the most important or most basic part of something ส่วนสำคัญ
core income contributors - are important activities that make money for the company
income - money that people receive from work or some other source, used for household consumption and savings
executive - among the highest level managers in a company
resistant - not harmed or affected by something
drought - a period of time when there is very little rain and water available ความแห้งแล้ง (See Wikipedia)
climate - the general weather conditions usually found in a particular place สภาพอากาศ
enable - to make someone able to do something, or to make something possible ทำให้เป็นไปได้
endure - survive after suffering something difficult, unpleasant or painful อดทน อดทนเพื่อให้ผ่านเวลาหรือเหตุการณ์ที่เลวร้าย
double - to become twice as big, twice as much or twice as many เพิ่มเป็นสองเท่า
local - in this country (here: Thailand)
trial - a test, usually over a limited period of time, to discover how effective or suitable something or someone is การทดลอง, การทดสอบ
trial - testing it out (before making it permanent) การลองผิดลองถูก การทดลอง
About the author
- Writer: Jon Fernquest
Position: Assistent Manager Educational services