Govt urged to ban foreign investment in rubber processing industry

The Union of Indonesian Rubber Companies (Gapkindo) is asking the government to ban foreign investment in the rubber processing industry in the country, a spokesman said.

"There is no reason to allow foreign investment in the rubber processing industry because the required technology is not difficult and Indonesia already masters it," Gapkindo chairman Daud Husni Bastari said here on Thursday.

The installed capacity of the rubber industry in the country has reached one million tons per year, while raw meterial available is about 2.4 million tons per year. In fact, the need is about 3.4 million tons per year.

According to him, the productivity of Indonesian land for rubber trees is only 1,000 kilogram per hectare annually, while India is able to produce 1,900 kilogram per hectare annually.

"Indonesia`s production should be raised to at least 1,500 kilogram per hectare per year. Therefore, production of seeds should also be increased," he said.

At present, he added, 85 percent of raw materials needed by the rubber industry was supplied by people`s plantations, the acreage of which was about 3.5 million hectare throughout the country.

Some countries were keen on investing the rubber industry with a mininum investment of Rp60 million. Among the interested countries were China, Malaysia, Thailand and Vietnam.

Gapkindo itself had no production target but its production was increasing by four to five percent per year, he said.

source: Antara | July 2008