Like its peers, the Sri Lankan rubber industry has been hard hit by the COVID 19. However, the pandemics will bring some opportunities to the sector, believes Ravi Dadlani, Chairman of the Sri Lanka Association of Manufacturers and Exporters of Rubber Products (SLAMERP), and MD of CEAT Kelani Holdings. “The demand for PPE is high and will be sustained in time to come until COVID 19 is no longer a pandemic. Especially gloves and other wearables made of rubber will be a good area for the Sri Lankan rubber industry to focus on,” says Dadlani an interview with Tyre Trends.

How do you see the impact of COVID 19 on Sri Lanka’s rubber industry?

Sri Lanka, like all exporting countries, have been largely impacted. The shutdown has caused a tremendous loss both in terms of production and the subsequent shut down of countries resulting in the cancellation of orders widely across the tyre industry. We are concerned that the impact fully on the industry is still to be realised. We will, once the supply chain and the related industries come back online, be able to quantify the extent of the impact. We are however positive that the Sri Lanka rubber industry is poised to benefit from the need arising from the COVID 19 impact. Especially the demand for PPE is high and will be sustained in time to come until COVID 19 is no longer a pandemic. Especially gloves and other wearables made of rubber will be a good area for the Sri Lankan rubber industry to focus on. Also, the government suspension of importing of tyres is poised to increase demand for domestic manufacturers of tyres at least in the short term, which will be a boost to the local rubber industry. Impact on the loss of exports and the timings of the opening of overseas markets would be critical at this point. 

The rubber industry has always been the country’s one of the main sectors and exporters. Do you think that the industry currently is being explored to its fullest potential?

There is a lot of potential for rubber in Sri Lanka. The need to increase the production of rubber through productivity improvements and the need to extend the rubber growing acreage is critical at this time. We have leading manufacturers of international repute and strong local manufacturers catering to export markets both in the tyre and gloves segments. 

The country also has the potential to enter new markets and customer segments with new products. There is more that needs to be done in terms of R&D and technological collaborations to enter high-value rubber-based product segments. With major global brands producing in Sri Lanka, we have a greater ability to increase trading activity and improve international sales as a regional hub for the industry.

What kind of support do you expect from the government and industry-related bodies for the long term?

Firstly, the rubber sector was the first to benefit from the priority given by the government initiative to commence operations. The sector benefited by the fast track approval to be classified as an essential sector. We expect the government to continue to have consistency when it comes to policy matters. We are also seeing a strong support base coming in terms of the Board of Investment and the Export Development Board for the rubber cluster. We need to fast track the planned policy-based approach of increasing rubber production in the country through the rubber master plan, with incentives if need be for plantations to spearhead this initiative. Also, research and development on rubber yield increase, all-weather rubber tapping techniques need to be introduced with governments thrust towards increasing rubber production.

There should also be incentives for exporters to invest in high-value rubber product manufacturing. We expect the government to educate the smallholders with international best practices to manage the rubber crop for better yield and output through RDD & RRI as key government institutions. The industry prefers to buy more local rubber, but there is a shortfall every year vs the demand. We also need to drive the public-private partnership research & development and must invest more in laboratory and testing facilities to provide certifications that are required for the export markets within Sri Lanka. The Government will also need to look at domestic supply chain inefficiencies which may hold back on the growth potential of the industry.

When we talk about tyres, how does the Sri Lankan tyre industry make its mark globally, especially in the solid tyre segment?

Absolutely it does. Sri Lanka is considered market leaders in certain categories of the solid tyre export segment. There are the numbers of global and local companies operating out of Sri Lanka holding a good foothold in the global solid tyre market. The global rubber industry is worth around USD 400 billion, out of which 65% is the tyre industry, given this, we have a market that we can increase our supply of both off road and on-road tyres, Sri Lanka has aggressively ventured into the global pneumatic agriculture, Off-road and industrial tyre segment which is estimated at USD 44b. We are confident that this position of strength will be maintained in the future, too in these segments. 

What are the challenges for tyre and rubber goods, especially for small and medium enterprises?

Key is the availability of rubber at consistent prices at the right quantities throughout the year. Currently, the industry is hampered with weather-related shortfalls in production coupled with plantations moving away from rubber and more profitable ventures depleting the total output. We consume 140,000 MT, and the local production is at 75,000 MT. Addressing these two areas will result in a stable supply of rubber for industries. It is very important that SMEs adopt technology and increase productivity and production to cater to the demand for rubber. 

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The Association of Natural Rubber Producing Countries (ANRPC) published its Monthly Natural Rubber Statistical Report for August 2026, noting firmer prices in several markets. Supply constraints, stable downstream demand and persistent geopolitical and macroeconomic uncertainty shaped the month. Renewed conflict and disruptions to major shipping routes added further pressure.

Physical prices for major grades moved in different directions. SMR-20 in Kuala Lumpur averaged USD 2.31 per kg, up 4.25 percent from July, while STR-20 in Bangkok rose 1.40 percent to USD 2.39 per kg. RSS-3 dropped 4.18 percent to USD 2.80 per kg, but RSS-4 in Kottayam gained 0.57 percent to USD 2.92 per kg. Latex-in-bulk fell 4.73 percent to USD 1.73 per kg. Brent crude averaged USD 91.08 per barrel, driven by concerns over possible restrictions on oil shipments through the Strait of Hormuz and wider Middle East instability, which raised energy supply risks and strengthened the oil market risk premium.

On trade, China's imports climbed 3.39 percent month-on-month, while India fell 10.18 percent and Malaysia dropped 8.24 percent; Viet Nam rose 5.08 percent. Exports advanced 5.63 percent in Viet Nam but declined in Thailand (-5.24 percent), Indonesia (-5.36 percent), Malaysia (-1.48 percent) and Cambodia (-1.88 percent).

Global production is projected to rise 0.6 percent to 15.039 million tons in 2026 from 14.952 million tonnes in 2025, after revisions to Thailand's 2025 output and updated 2026 estimates for Thailand, Malaysia and Indonesia. Weather, including erratic rainfall and drier Southeast Asian conditions, affected output. August 2026 production was estimated at 1.396 million tonnes, down 4.51 percent from 1.462 million tonnes a year earlier. Demand is forecast to grow 0.4 percent to 15.356 million tonnes in 2026 from 15.301 million tonnes, with the largest consumption gains expected in China, Malaysia and Cambodia. Prospects depend on vehicle sales, tyre production, shipping conditions and weather-related supply disruptions, while steady EV-linked demand supported modest growth led by China and India. The ringgit traded between RM4.02 per USD and RM4.09 per USD, and the baht between 32.68 and 33.34. The SHFE January 2027 contract averaged 18,109 CNY per tonne, up 7.78 percent month-on-month, while the SGX November 2026 contract averaged USD 2.24 per kg, up 4.32 percent.

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HS HYOSUNG has formalised a memorandum of understanding (MoU) with the State Government of San Luis Potosí, with the signing taking place at the World Trade Center Mexico City. The event formed part of the Korea-Mexico Business Forum, held alongside the Korean economic delegation's visit to Mexico.

Attending officials included Marcelo Ebrard, Mexico's Secretary of Economy, and Mario García Valdez, Secretary of Economic Development of San Luis Potosí. The two sides confirmed their shared resolve to back the company's local investment and regional growth. Separately, HS HYOSUNG's leadership met bilaterally with Secretary Ebrard to elaborate on its strategic vision and investment plans.

The agreement sets out a phased expansion of HS HYOSUNG's investments in San Luis Potosí beginning in 2027, with the goal of creating a major advanced materials production hub that bolsters supply for North American and wider global markets. The company's advanced materials span tyre cord, a flagship world-leading product, along with mobility, energy, aerospace and defence applications. Its North American operations, spanning Mexico and the United States, turn out tyre cord, airbag materials and mobility interior components for global leaders such as General Motors and Goodyear, underpinned by a highly dependable global supply chain.

Nak-yang Sung, CEO, HS HYOSUNG ADVANCED MATERIALS, said, “This investment goes beyond establishing a simple manufacturing base – it reflects our strategy to turn Mexico into a pivotal hub connecting North America with global supply networks. We are also committed to strengthening local supply chains and creating high-quality jobs to contribute directly to the region's industrial ecosystem.”

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Kumho Petrochemical Group is steering its business towards research-driven, higher-value outputs as oversupply and soft demand continue to weigh on the worldwide petrochemical sector. The Seoul-based group outlined plans to boost spending on speciality chemicals, sustainable materials and novel production methods, a push intended to lift profits while building a foundation for future expansion.

Underlying the move is a deliberate evolution in the group's identity, from a bulk materials vendor to a provider of technology-backed solutions that address shifting customer requirements and stricter environmental rules. A central element of that effort involves widening the speciality lineup, exemplified by added capacity for solution styrene butadiene rubber, a synthetic rubber that enhances durability, rolling resistance and tread wear in high-performance electric vehicle tyres.

Environmental initiatives form another pillar. Facilities built by the company can trap approximately 76,000 metric tonnes of carbon dioxide each year, while separately developed technology turns recycled acrylonitrile butadiene styrene sourced from scrapped household appliances into automotive-grade interior components that satisfy performance standards and generate fewer emissions than conventional methods. The group has also joined forces with POSCO Future M and BEI on anode-free lithium-metal battery development.

Parallel technology-focused programmes are underway at affiliated units. Kumho P&B Chemicals is formulating water-based epoxy resins that curb volatile organic compound releases while incorporating more bio-based inputs to reduce carbon intensity. Kumho Mitsui Chemicals is advancing bio-based polyurethane systems and electric vehicle materials, alongside debottlenecking work to add 100,000 tonnes of annual methylene diphenyl diisocyanate capacity. Kumho Polychem, meanwhile, is targeting ethylene propylene diene monomer through low-temperature polymerisation paired with energy-efficiency improvements.

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Birla Carbon has confirmed a price increase of up to 15 percent for its Speciality Materials products across Asia, scheduled to take effect on 1 October 2026. The company pointed to significant and sustained rises in feedstock costs, driven partly by ongoing geopolitical instability and disruptions in global feedstock markets, as the reason behind the adjustment.

Although Birla Carbon pursued operational efficiencies, supply chain optimisation and disciplined cost management to soften the impact, the scale and persistence of the cost escalation left a price adjustment unavoidable. The company's sales teams will engage customers directly to explain the details and help them navigate the transition.

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