By Festus Poquie
Liberian President Joseph Boakai is actively courting Indonesian authorities and companies to invest in Liberia’s rubber industry, which has been dominated by the US Company Firestone for nearly a century.
Firestone Liberia Inc., a subsidiary of Bridgestone Americas, has been operating the world’s largest natural rubber plantation in Liberia since 1926, and has been a significant contributor to the country’s economic development, investing $1.3 billion since the end of the country’s civil war.
President Boakai however, appears to be dissatisfied with Firestone’s mode of operation in Liberia, telling Indonesians that the country has benefited relatively small regarding product manufacturing despite the company’s presence for nearly a century.
“In two years’ time, Liberia would have celebrated 100 years of rubber production. Liberia has very little to show interns of value addition in the rubber industry,” he said at his Church in Monrovia upon return from a travel to Indonesia and Asia.
“We believe therefore, that with technical assistance and more investment Liberia could begin to produce simple manufactured goods such as rubber gloves, syringes and other plastic materials.”
The Liberian President also claimed that Indonesia has the largest single investment in Liberia, estimated at around $2 billion in the oil palm sector. He wants the country to make a similar-sized investment in the rubber industry.
During his recent visit to Indonesia and Asia, Boakai met with executives of Golden Veroleum, an Indonesian company with a large oil palm concession in Liberia, and appealed for more investment in the country’s rubber sector.
He also discussed the possibility of establishing Indonesian banks in Liberia to provide loans and financing for major development projects.
Rubber Markets
Nearly half of all natural rubber output is used for tire production; and about 60 percent ends up in the automotive market as a whole, which includes belts, hoses and seals. Natural rubber is also used for gloves, mats, condoms, hot water bottles, and protective clothing.
Approximately 90 percent of rubber production takes place in Asia, with Thailand, Indonesia, Malaysia, India, China and Vietnam accounting for 88 percent of global production. Liberia accounts for approximately 64 percent of quantity and 72 percent of value for American rubber imports, with Vietnam and Thailand also being significant sources.
Today natural rubber accounts for just 44 percent of world consumption; synthetic rubber accounts for the rest.
However, natural rubber’s environment-friendly nature, biodegradability, and lack of dependence on oil pricing have led to an increase in natural versus synthetic rubber in recent years.
Liberia is an exporter of raw rubber (a relatively low value commodity), and has no secondary or tertiary rubber processing activities. While tire manufacturing in Liberia has been discussed for decades, rubber is not the primary ingredient in tires.