Businessmen head north to plant rubber

Businessmen head north to plant rubber

Businessmen head north to plant rubber


Investors look away from strife-torn South



WICHAYANT BOONCHOTE (Bangkok Post)



More and more southern businessmen are heading to the North and Northeast to set up rubber plantations and escape the southern unrest and high production costs. Perk Lertwangpong, chairman of the Thai rubber tappers' cooperative, said many investors in the rubber industry in the South are finding the business less secure, owing to the separatist violence.



They believe it would be wise to relocate their rubber businesses to the North and Northeast, as many latex tappers have been shot dead by insurgents in the past two years, he said.



Productivity was also low because there were simply not enough tappers to bring the latex out to the market in time.



For this reason, investors have begun to look elsewhere for places to grow rubber trees, leading to a ''land rush'' in several northeastern provinces including Loei, Ubon Ratchathani, Udon Thani, Nong Khai, Sakon Nakhon, and Buri Ram.



Provinces in the North such as Chiang Rai and Phayao have also became investment hotspots for southern rubber businessmen.



Investors are attracted by lower production costs and the logistical facilities.



Laem Chabang deep-sea port in Chon Buri is more easily accessible from the Northeast than from the South. This could help save shipment costs, given the surge in oil prices. Mr Perk said the key players, Thai Hua Rubber Plc and Southland Rubber Co, have purchased more than a thousand rai of land and built their own regional factories there.



He said land where it is permitted to grow rubber trees carries a price tag almost 10 times the price of land in other regions.



Mr Perk predicted that areas for growing rubber trees in the North and Northeast would expand by two to three million rai in a couple of years.



Vinij Chirarat, director of the Phatthalung office of the Rubber Replanting Aid Fund, said more and more southern rubber entrepreneurs in Songkhla and Nakhon Si Thammarat were flocking to the northeastern provinces close to the Mekong river because of the fertile soil. Favourable weather was another factor, Mr Vinij said.



He also voiced concern about a recent increase in the price of rubber, saying some big customers were turning to alternative materials or setting up their own rubber plantations, and that could eventually force middle and small-scale retailers to go out of business.



Prasit Meedsen, director of the Phatthalung office of the Rubber Replanting Aid Fund in Zone One, said Thailand has seen over 12 million rai of land cleared for growing rubber.



The government should curb the amount of cultivation to assert greater control over rubber prices, he said.



Sukum Wong-ek, director of Thailand's Rubber Research Institute, said 127 units in charge of checking rubber saplings under the one million rai rubber plantation project were set up in 36 provinces in the North and Northeast to ensure there was no problem before giving the saplings to rubber growers.



He believes the rubber output will increase by more than 220,000 tonnes per annum under the project and help boost exports.



The foreign exchange earned through rubber exports was expected to reach 20 billion baht annually.



Rubber plantations would also help improve the environment and create more jobs as well as reduce the mass exodus of labour from the countryside to the big cities, Mr Sukum said