Tyre and tube production has increased due to falls in the price of natural rubber. — Photo baocongthuong

HA NOI (Biz Hub) — Tyre and tube production in Viet Nam has enormously increased since early this year due to low price of natural rubber on the local market, according to experts.

According to the Ministry of Agriculture and Rural Development, Viet Nam saw a year-on-year decline of 23.1 per cent in export volume of rubber to 144,000 tonnes and 42 per cent in export value to US$292 million in the first quarter of this year.

Over the last few months, export price of local rubber dropped many times to as low as VND40 million ($1,900) per tonne recently, that is, a drop to half the price from 2011 because of oversupply in the world market.

Farmers and enterprises producing rubber faced difficulties in production and business due to the decline in exports.

Nguyen Hong Phu, deputy general director of the Viet Nam Rubber Industrial Group (VRG), said the drop in price of rubber, however, was advantageous to the tire and tube industries in Viet Nam, reported Thoi bao Kinh te Viet Nam (Viet Nam Economics Time) newspaper.

Therefore, in the first quarter of this year, VRG gained an increase of 10 per cent in export value of tire and tube compared with major export markets of ASEAN and Middle East countries the same period last year, he added.

Production up

Meanwhile, the Viet Nam Chemical Group (Vinachem) claimed its production of rubber tyres and tubes had increased in the first quarter of this year due to the low price of rubber.

Its industrial production value reached VND1.62 trillion, which is 2.4 per cent higher than the same period last year.

In the first quarter of this year, output of its products had an increase of 6.5 per cent to 434,772 units of auto tire, of 12.7 per cent to 1.3 million units of motor bicycle, and 13.4 per cent to 2.5 million units of bicycle compared with the same period last year.

Vinachem's exports of tyres and tubes accounted for 29.6 per cent of the group's export value.

At present, Viet Nam has 830 enterprises in the tyre industry, including 30 production enterprises, 170 trading companies, 170 exporting companies, and 460 tyre importing companies.

In recent years, Viet Nam has changed from being a country that imported rubber tyres and tube products to one that exports them.

Now, the local tyre and tube industry has ramped up technological investment to produce high-grade products such as radial and steel-belted radial tyres for all markets. — VNS