list of members - crtasl.org. n. silva of c.w. mackie and mr.talal shums of shums & company ltd...

The Colombo Rubber Traders’ Association Annual Report & Accounts 2014/2015

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COMMITTEE – 2014/2015

CHAIRMAN

Mr. M. S. Rahim - A. M. Rahim & Co (Pvt) Ltd.

VICE CHAIRMAN

Mr. S. S. Poholiyadde - Kegalle Plantations PLC

Buyer Representatives

A.M Rahim & Co. Ltd C.W. Mackie PLC

Eastern Merchants PLC Almar Trading Company

Rajapakse Trading (Pvt) Ltd (from April 2014 to December 2014)

Shums & Company Ltd (from December 2014 to March 2015)

Seller Representatives

Pussellawa Plantations Ltd Kelani Valley Plantations PLC

Kegalle Plantations PLC Balangoda Plantations PLC Kotagala Plantations PLC

Kahawatte Plantations PLC

BROKER REPRESENTATIVE

Forbes & Walker Commodity Brokers (Pvt) Ltd.

BY INVITATION The Planters’ Association of Ceylon

The Colombo Rubber Buyers’ Association Mr. Nalin Silva - C.W. Mackie PLC

Non - CBA Broker – J. D. and Sons (Pvt) Ltd

SECRETARIAT

The Ceylon Chamber of Commerce


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SUB COMMITTEES - 2014/2015

MEMBERSHIP & DISCIPLINE

Mr. W.T. Ellawala (Convener)

Mr. H. de Silva Mr. M.S. Rahim Mr. R.C. Peiris

Mr. Damitha Perera Mr. M Dias

WAREHOUSE

Mr. A. Edirisinghe (Convener)

Mr. S.A. Eriyagama Mr. K.M.N.P. Bandara

Mr. R. Fernando Mr. M Dias

Mr. S.H. Shaheed

BY LAWS & CONSTITUTION

Mr. S. Poholiyadde (Convener)

Mr. L. Obeyesekere Mr. S.H. Saheed Mr. H. de Silva Mr. M.S. Rahim

Mr. S. Eriyagama Mr. V Ruberu

FREIGHT & SHIPPING

Mr. N. Silva(Convener)

Mr. A. Edirisinghe Mr. S.H. Saheed

Mr. K.M.N.P. Bandara

REGULATORY REFORMS

Mr. W.T. Ellawala (Convener)

Mr. Damitha Perera Mr. M.S. Rahim Mr. R Fernando

Mr. S. Poholiyadde Mr. M Dias


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REPRESENTATION ON OTHER BODIES

THE CEYLON CHAMBER OF COMMERCE

Mr. M.S Rahim and Mr. S. Poholiyadde were nominated to serve on the Committee of the Ceylon Chamber of Commerce for the year 2014, as the CRTA representative and Alternate, respectively.

SRI LANKA SHIPPERS’ COUNCIL

Mr. N. Silva of C.W. Mackie and Mr.Talal Shums of Shums & Company Ltd were nominated

to represent CRTA in the year 2014/15.

EXPORTERS’ ASSOCIATION OF SRI LANKA

Mr. H. de Silva of Eastern Merchants PLC and Mr. Talal Shums of Shums & Company Ltd were nominated to represent the Association on the EASL Committee for the year 2014/2015.

SRI LANKA SOCIETY FOR RUBBER INDUSTRY

Mr. Maasiri Dias was nominated to represent the CRTA on the Board of the Sri Lanka Society for Rubber Industry for the year 2014/2015.


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MEMBERS

Buyer Members ALMAR TRADING CO. (PTE) LTD 143/17, Sri Wickrama Mawatha, Colombo 15 Tel : 5340440 Fax : 5344100 ALI BROTHERS (PVT) LTD. 228, Layards Broadway, Colombo 14 Tel : 2330207 – 8 Fax : 2541104 ASSOCIATED MOTORWAYS LTD 185, Union Place, Colombo 2 Tel : 2309309 Fax : 2323781 ASSOCIATED SPECIALTY RUBBER (PVT) LTD Yatideriya Rubber Factory Undungoda. 71200 Tel : 035-2278812 Fax : 035-2278811 A. M. RAHIM & CO. LIMITED 64, W. A. D. Ramanayake Mawatha., Colombo 2 Tel : 2320421/2333625/2445856 Fax : 2448345 AROMA NATURAL RUBBER [PVT] LTD Keraminiya Watta, Mawanella. Tel : 035-2248050 Fax : 035-2246648

CEAT- KELANI INTERNATIONAL TYRES Co (PVT) LTD P. O. BOX 53, Nungamugoda, Kelaniya. Tel : 2911305/2911241/2911269 Fax : 4817721/2911453 CEYLON TRADING CO. LTD 36, D. R. Wijewardena Mawatha, Colombo 10 Tel : 2327336/9 /2328904/2325665 Fax : 2449586


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C. W. MACKIE PLC 36, D. R. Wijewardena Mawatha, Colombo 10 Tel : 2440229/2423554-63 Fax : 2440228 EASTERN MERCHANTS PLC 341, Union Place, Colombo 2 Tel : 2325736/2328406 Fax : 2448474 FAGA TYRES (PVT) LTD No. 02, Udugalla Estate, Paragasthota, Bandaragama Tel : 077 3873 601/ 034 4298 561/ 0 11 2620 603 Fax : 011 2620 603 GLENROSS RUBBER COMPANY B/2, Elvitigala Flats, Elvitigala Mw., Colombo 8 Tel : 2699607 Fax : 2866765 GLOBAL RUBBER INDUSTRIES (PVT) LTD 28, Joseph’s Lane Colombo 4 Tel : 2598831 Fax : 2551091 HAMEED BROTHERS COLOMBO (PVT) LTD 377, Grandpass Road, Colombo 14 Tel : 2320832/2324447/2345934-5 Fax : 2335617 JAFFERJEE BROTHERS 150, St. Joseph’s Street, P O Box 1180, Grandpass Colombo 14 Tel : 2432051/ 2434041 Fax : 2446085 K. R. V. ENTERPRISES 33, Kelani Ganga Mill Road, COLOMBO 15 Tel : 4936826 Fax : 2433499

LANKA PRODUCE TRADERS 636/B/2, Malwatta, Malwana Tel : 0112570076/0777488829 LE-FERNE LABORATORIES (PVT) LTD. 255/3, Highlevel Road, Colombo 5 Tel : 4203328/4203329 Fax : 2813862


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LOADSTAR (PVT) LTD Regents Court, 218, Minuwangoda Road Ekala, Ja-Ela Tel : 4837659 Fax : 2232828 LALAN RUBBER (PVT) LTD 18, Nawala Road, Nugegoda. Tel : 4311200/4311241 Fax : 2820579/2311222 MALWATTE TRADERS 22, Babapulle Place, Off Grand Pass Road, Colombo 14 Tel : 2439451 MICROCELLS LTD Koskanatte Road, Mampe, Piliyandala Tel : 2708908 Fax : 2708917 OREX TRADING COMPANY No. 107, Biyagama Road, Kelaniya Tel : 2911566/2911236 Fax : 2911566 P. R. & SONS No. 17, Dawalasinghharama Mawatha Colombo 15 Tel : 2546168 POLYDEX (PVT) LTD 69, Jayalath Building, 3rd Floor New Kelani Bridge Road, Orugodawatte Wellampitiya Tel : 2437575/5222111 Fax : 2448223 RICHARD PEIRIS & COMPANY PLC 310, High Level Road Nawinna, Maharagama Tel : 4304028/2852644 Fax : 2856787 SHUMS & CO LTD 33A, Queens Road, Colombo 3 Tel : 2580027/2580170/2588470 Fax : 2503619/2503440


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Seller Members AGALAWATTE PLANTATIONS PLC 10, Gnanartha Pradeepa Mawatha, Colombo 8 Tel : 2679598-9/2678390 Fax : 2694833 BALANGODA PLANTATIONS PLC P.O.Box No. 6, Palmgarden Ratnapura Tel: : 045 2231445/7 Fax : 045 2223598 ELLAWALA RUBBER (PVT) LTD 14, Carlwil Place, Colombo 03. Tel : 2575756 Fax : 2573098 ELPITIYA PLANTATIONS PLC 73/3, Ward Place, Colombo 07 Tel : 5335572-74 Fax : 5335573 HAPUGASTENNE PLANTATIONS PLC 186, Vauxhall Street Colombo 2 Tel : 045 2222717/ 2222319 Fax : 045 2222717 HORANA PLANTATIONS PLC 7/1, Gower St, Colombo 05 Tel : 5400700 - 87 Fax : 5400730

KAHAWATTE PLANTATIONS PLC 52, Maligawatte Road, Colombo 10 Tel : 4723937 Fax : 4722495 KEGALLE PLANTATIONS PLC 310, High Level Road, Nawinna, Maharagama. Tel : 4310823 / 4310799 Fax : 4310799 KELANI VALLEY PLANTATIONS PLC 400, Deans Road, Colombo 10 Tel : 2686274-5/2627700 Fax : 2694216


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KOTAGALA PLANTATIONS PLC 53 1/1, Sir Baron Jayathileke Mawatha Colombo 1 Tel : 2381508-10 Fax : 2381513 MALWATTE VALLEY PLANTATIONS PLC 280, Dam Street, Colombo 12 Tel: 5388800 Fax: 2543937 NAMUNUKULA PLANTATIONS PLC 310, High Level Road Nawinna, Maharagama. Tel : 4310801, 4310500 Fax : 4306726 PUSSELLAWA PLANTATIONS LTD. No. 168, Negambo Road Peliyagoda Tel : 7990000 / 7990007 Fax : 7990063 WATAWALA PLANTATIONS PLC No. 60, Dharmapala Mawatha, Colombo 03 Tel :4702400 Fax :4716365

Broker Members

COMMODITY CONSULARS (PVT) LTD 49/4, Sir Chiththampalam A Gardiner Mawatha, Colombo 2 Tel : 0777 700 999 Fax : 5665429 FORBES & WALKER COMMODITY BROKERS (PVT) LTD 46/38, Navam Mawatha, Colombo 2 Tel : 2433720/43 Fax : 2437147 H. W. J. DIAS & BROS (PVT) LTD. 40/5, Dharamapala Place, Rajagiriya. Tel : 0716912162 J. D. & SONS (PRIVATE) LTD. 64, W.A.D Ramanayake Mw, Colombo 02 Tel : 2331739/ 2331749 Fax :2331729


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JOHN KEELLS PLC 186, Vauxhall Street, Colombo 2. Tel : 2306551 Fax : 2326121 LANKA COMMODITY BROKERS LTD No. 97 Ananda Rajakaruna Mawatha Colombo 10 Tel : 5377080-3 Fax : 5377090 M. Z. M. MOHIDEEN & SONS 16/4-1/1, Waidya Road, Dehiwela Tel : 0777-316415 & 0777-359259 Fax : 2719802 RANSRI ENTERPRISES (PVT) LTD. 199/96, Obeysekera Crescent, Rajagiriya Road, Rajagiriya. Tel : 5653261 Fax : 4335061 SIYAKA PRODUCE BROKERS (PVT) LTD. 120/15, Vidya Mawatha, Colombo 07 Tel : 4939438 Fax : 2678145


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AN OVERVIEW OF THE INDUSTRY

NATURAL RUBBER PRODUCTION

Total rubber production declined by 24.44 percent to 98.54 Million Kgs during the year 2014 compared to the year 2013. Rubber production in the first half of 2014 continued to decline for the second consecutive year by 2.3 per cent to 60,990 metric tons compared to the first half of 2013. This is also a decline by 18 per cent compared to the average production in the same period for the last five years. In the first three months of 2014, prolonged dry weather conditions reported in most rubber growing areas affected the harvest and the lack of water affected the production in several plantations whilst intermittent showers disrupted tapping in some growing areas after April. Further, smallholders of rubber slowed down their tapping operations along with the overall drop in rubber prices.

The relatively low prices also contributed to some extent to the lower levels of production of smallholders. During 2014, sheet rubber production declined by 22.7 percent to 58.54 Million Kgs and crepe rubber declined by 24.42 percent to 15.26 Million Kgs.

TABLE 1

SRI LANKAN RUBBER PRODUCTION 2010 - 2014 (Mn. Kgs.)

CATEGORY TOTAL

2010 2011 2012

2013 2014 % SHARE OF

TOTAL 2013

Sheet Rubber 59.25 60.69 59.24 62.8 48.54 49.25

Crepe Rubber 61.04 64.64 39.73 20.19 15.26 15.48

TSR 8.34 7.98 8.67 9.57 7.62 7.73

Others 24.34 24.87 44.4 37.86 27.15 27.55

Total 152.96 158.19 152.04 130.42 98.54 100%

Source: Rubber Development Department

Having accounted for the major share of the country’s total production in 2014, Sheet Rubber increased from 48.15 percent in 2013 to 49.25 percent in 2014. Crepe Rubber remains unchanged on 15.48 percent in 2014, whilst “Others”, comprising mainly centrifuged latex, maintained its share at around 27.55 percent of the total production in 2014.


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TABLE 2

NATURAL RUBBER PRODUCTION 2008-2014

(Mn Kgs)

Year

Sheet

Rubber

Sole Crepe

Scrap Crepe

Latex Crepe

TSR Latex & Other

Total

2008 55.01 3.94 2.71 21.04 10.96 35.57 129.23

2009 50.51 4.99 3.16 28.00 10.93 27.39 124.98

2010 59.24 6.70 1.84 52.50 8.34 24.34 152.96

2011 60.70 3.48 1.33 59.93 7.98 24.87 158.19

2012 59.24 1.90 1.28 36.55 8.67 24.40 152.04

2013 62.80 2.38 2.44 15.37 9.57 37.86 130.42

2014 48.54 2.41 1.02 11.83 7.67 27.15 98.62


COST OF PRODUCTION

The Plantation Workers’ Collective Agreement, which came into effective from April 1, 2013, was unprecedentedly negotiated and formalized following comparatively brief deliberations, the terms and conditions will remain same until the next wage negotiation in 2015. Cost of production has estimated to increase by Rs.23/- per kg on account of this wage revision. The daily wage package has increased by 20 percent, from Rs.515/- to Rs.620/-. Of the three main components that comprise this wage package, adjustments were made to two, and the other remained unchanged.

The daily Basic Wage was increased from Rs.380/- to Rs. 450/- and the daily Attendance Incentive from Rs.105/- to Rs.140/-.

The Fixed Price Share Supplement of Rs.30/- remained unchanged.

The “over kilo” rate was enhanced from Rs.25/- to Rs.30/-. The average cost of production per kg of rubber for small holdings amounted to Rs.136.00 in year 2012. It increased to Rs.150.00 in the year 2013.

Source: Ministry of Plantation Industries – Progress report 2014


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DOMESTIC CONSUMPTION

Domestic rubber consumption also declined to 85.63 thousand tons from 107.25 thousand tons during the year 2014 reflecting the reduction in industrial production partly due to falling export demands as well as the lack of availability of quality latex rubber.

TABLE 3

DOMESTIC CONSUMPTION OF NATURAL RUBBER 2010-2014

(IN THOUSAND TONS)

2010

2011 2012 2013 2014

Total 107.22 111.72 110.03 107.25 85.63


CULTIVATION

At present, rubber cultivation has expanded to an extent of 133,668 hectares of which 85,083 hectares (63.4%) are contributed by the rubber small holding sector. Further, an extent of 48,585 hectares (37%) is managed under the corporate sector. 111,200 hectares of the total extent of lands are mature (tapping) rubber lands and 28,800 hectares are immature rubber lands. Since the trend to move away from the rubber cultivation has decreased at present and the rubber cultivation has been expanded to non-traditional areas such as Ampara, and Vavuniya Districts, it is projected that the total extent of rubber lands will be expanded to 148,000 hectares in year 2015.

The total extent of lands under rubber replanting at the end of year 2013 under the Rubber Replanting Subsidy of Rs.268.76 million is 1,782.17 hectares.

At present, the extent of rubber small holdings is approximately 85,083 hectares and it is 63% of the total extent of rubber lands. The rubber small holders have scattered in 19 Districts of the country and their contribution to the national rubber production is approximately 77%. The interest of the rubber small holders to the rubber cultivation has further improved due to the fertilizer subsidy granted continuously to the rubber small holders under the National Fertilizer Subsidy Programme and the increased rubber planting subsidy.

The extent of rubber lands under the corporate sector is approximately 48,585 hectares and it is about 37% of the total extent of rubber lands. The rubber holdings of the corporate sector have scattered in 12 districts of the country and their contribution to the national rubber production is about 23%. This sector is significant in the local rubber industry due to the production of finished products, & the purchasing raw material from the rubber small holders. The national fertilizer subsidy granted continuously to the corporate sector from May 2011 on the government policies has caused to increase the contribution of production in this sector.

Source: Ministry of Plantation Industries – Progress report 2014


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EXPORTS

The decline in production took its toll on exports, with the volume of domestic consumption declining by 2.5%. Following the trend of the previous two years, export volumes continued to diminish and recorded a further 30.89 percent decline in 2014. The waning demand from the major tyre manufacturing markets in East Asia, due to the global downturn in the Motor Vehicle Industry and improved production in other rubber producing countries and the carryover stocks held in the international market, also had a bearing on the lower export volumes, as well as prices. Exports of Latex Crape declined by 25.13 percent.

TABLE 4

EXPORTS OF RUBBER – 2010 - 2014 (IN THOUSAND TONS)

Year

Sheet Rubber

Sole Crepe

Scrap Crepe

Latex Crepe

TSR

Latex & Other

Total

2010 20.90 2.15 0.07 18.47 2.84 7.05 51.50

2011 13.56 2.47 - 20.90 3.66 2.01 42.61

2012 11.06 1.49 - 17.65 4.58 2.61 37.38

2013 4.57 2.02 0.02 13.17 2.4 1.41 23.59

2014 1.97 2.30 0.02 9.86 0.9 1.25 16.31


The Export Prices of Rubber in 2010 - 2014 are shown in Table 5.

TABLE 5

RUBBER EXPORT PRICES 2010-2014 (Rs. / Kg)

YEAR RSS CREPE OTHER TOTAL

2010 372.56 386.78 368.15 377.53

2011 511.47 549.48 534.65 535.39

2012 429.16 423.71 399.06 420.74

2013 366.79 400.72 374.17 389.81

2014 (a) 298.42 374.02 358.09 362.83 Source: Central Bank of Sri Lanka

(a) Provisional

The declining trend in rubber prices which started from the beginning of 2012 continued during the first half of 2014/15 as well. A sharp drop in prices of natural rubber was observed in both domestic and overseas markets in the first half of 2014. During the period under review, global


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rubber prices have fallen significantly. Stockpiles in China and Japan have increased and the demand from the world’s largest rubber consumers has weakened. Global natural rubber production has declined, particularly in the second quarter mainly due to a slowdown in tapping of small growers in major producing countries such as Thailand in response to low prices.

Export prices recorded an overall decline of 6.92 percent. During this period, the export price of RSS and crepe declined by 18.64 per cent to Rs. 298.42 per kg and 6.66 per cent to Rs.374.02 per kg, respectively.

TABLE 6

EXPORTS OF NATURAL RUBBER FROM SRI LANKA FOR 2014 - (Kgs)

2014

CREPE RUBBER

Sole Crepe

Vietnam 1,140,824

South Africa 546,734

Hong Kong 256,410

Bangladesh 32,053

USA 7,583

Other 312,008

Total 2,295,612

Latex Crepe

Malaysia 1,010,000

Japan 1,622,700

Italy 871,800

Germany 891,500

Other 5,463,914

Total 9,859,914

Scrap Crepe

Malaysia -

France 17,000

Total 17,000

SHEET RUBBER

RSS

India 612,520

Pakistan 755,400

Germany 423,360

U.S.A 3,780

Other 171,505

Total 1,966,565

LATEX & OTHER 9,859,914

TSR 913,,290

GRAND TOTAL 35,685,499



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NATURAL RUBBER PRICES

The Colombo Market Prices of Rubber in 2010 - 2014 are shown in Table 7.

TABLE 7

COLOMBO MARKET PRICES 2010-2014 (Rs./Kgs)

YEAR

RSS

LATEX CREPE

SCRAP CREPE

NO. 1 X BR

NO. 1 NO.2 IX NO. 1

2010 403.02 395.51 457.68 452.65 358.95

2011 508.80 505.76 574.93 566.60 462.24

2012 416.47 409.56 410.84 405.00 376.57

2013 376.90 369.21 397.28 389.69 309.23

2014 (a) 286.05 280.14 310.00 302.20 213.27

(a) Provisional Source: Central Bank of Sri Lanka

A sharp drop in prices of natural rubber was observed in both domestic and overseas markets in the first half of 2014. At the Colombo Rubber Auction, the average price of Ribbed Smoked Sheet 1 (RSS1) declined by 21% to Rs. 301.00 per kg and latex crepe 1X declined by 17 percent to Rs. 318.00 per kg. The price at the Colombo Rubber Auction (CRA) followed the trend in global markets. The cost of production continues to escalate and is bound to move up further in the ensuing year, on account of the increase in the wage package and electricity rates. With the declining prices, this will seriously impact the viability of the Producers. The Replanting Subsidy Scheme does not provide sufficient incentive to the growers. It is hoped that, with the opening of new planting areas, production and yields, the figures of which are perceived to be overstated, could be expected to reverse their downward trend.

RUBBER REPLANTING SUBSIDY SCHEME

Subsidies determined by the Ministry of Plantation Industries are disbursed and regulated by the RDD. Currently, subsidies for re-planting and new planting qualify for Rs.175,000/- and Rs.150,000/- per hectare, respectively, while the actual cost of replanting is in the region of Rs.820,000/- per hectare. Both the Corporate Sector and the smallholders are beneficiaries of this subsidy, disbursed in eight installments, during the immature period.

(Source: Ministry of Plantation Industries – Progress report 2014)


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TABLE 8

STATISTICAL OVERVIEW OF THE RUBBER INDUSTRY

2012-2014

ITEM UNIT 2012 2013 (a) 2014 (b)

Production Kg mn 152.0 130.4 98.6

Total extent (f) Hectares ‘000 131 132 134

Area under tapping (f) Hectares ‘000 104 107 111

Yield kg./ hectare 1,459 1,219 889

Cost of Production (g) Rs./kg. 136 150 160

Colombo Auction (RSS1) Rs./kg. 416.47 376.9 285.76

Export (fob) Rs./kg. 420.74 389.81 362.96

Replanting (h) Hectares 2,161 1,782 1,475

New planting (h) Hectares 2,449 1,574 1,304

Source: Central Bank of Sri Lanka

(a) Revised (b) Provisional (f) Extent under rubber is based on the Census of Agriculture conducted by the Department of Census & Statistics in 2002 (g) Cost of production revised in 2002 based on a survey conducted by the Rubber Development Department in 2003. (h) Extents covered by cultivation assistance schemes of the Rubber Development Department.

GOVERNMENT INTERVENTION IN RUBBER CULTIVATION

National Fertilizer Subsidy Programme of the Government (A 50 kg sack of mixed fertilizer is Rs. 1,300 and a 50 kg sack of unmixed fertilizer is Rs. 1,200) has been continued and necessary steps were taken to further develop the rubber cultivation as high quality and productive plantation through the policy decisions taken by the government for enhancement of the rubber industry of Sri Lanka, guidance and encouragements. Programmes were implemented continuously through the Rubber Development Department, Rubber Research Institute and Thurusaviya Fund. (Good agricultural practices such as application of fertilizer and fixing of rain guards to rubber cultivation). (Source: Ministry of Plantation Industries – Progress report 2014). A guaranteed price of Rs.300/- for a killo of rubber was initially offered to rubber small holders who are registered with the RDD with effect from November 15, 2014 to January 2015. The New Government elected on January 11, 2015 has decided to pay a guaranteed price with effect from March 15, 2015 to rubber small holders who are registered with the RDD. The guaranteed price for a kilo of RSS rubber will be paid according to the following formula with effect from March, 2015.

RSS 1 and RSS 2 - Rs. 350/-

RSS 3 - Rs. 325/-

RSS 4 and RSS 5 - Rs. 300/-

Latex - Different between market price for RSS4/ RSS 5 plus Rs.14/- and Rs.300/-


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MARKET TRENDS & OUTLOOK MARKET TRENDS Rubber Market: 2014 was a bad year for producers where prices for all grades of rubber dropped considerably. At the beginning of January 2014 Latex Crepe 1X fetched Rs.410/- and RSS1 fetched Rs.345/- but by the end of January prices had sharply dropped to Rs.310/- for Latex Crepe 1X and Rs.278/- for RSS1. Thereafter, prices for Latex Crepe 1X fluctuated within a range of Rs.295/- to a maximum of Rs.330/- during the rest of the year. The price for RSS1 also fluctuated in the same manner, but by June the differential widened starting from Rs.250/-. An interesting feature was that the total Rubber sold by brokers at the Auctions was 15,109 Tons which was more than in 2013. Due to heavy rainfall in the months from June to November, total production of Rubber in 2014 reduced considerably to 98,573 tons, recording a drop of 31,848 tons according to statistics compiled by the Rubber Development Department.

235.00

245.00

255.00

265.00

275.00

285.00

295.00

305.00

315.00

325.00

335.00

345.00

355.00

365.00

375.00

385.00

395.00

405.00

415.00

1/1/14

8/1/14

15/1/14

22/1/14

29/1/14

5/2/14

12/2/14

19/2/14

26/2/14

5/3/14

12/3/14

19/3/14

26/3/14

2/4/14

9/4/14

16/4/14

23/4/14

30/4/14

7/5/14

14/5/14

21/5/14

28/5/14

4/6/14

11/6/14

18/6/14

25/6/14

2/7/14

9/7/14

16/7/14

23/7/14

30/7/14

6/8/14

13/8/14

20/8/14

27/8/14

3/9/14

10/9/14

17/9/14

24/9/14

1/10/14

8/10/14

15/10/14

22/10/14

29/10/14

5/11/14

12/11/14

19/11/14

26/11/14

3/12/14

10/12/14

17/12/14

24/12/14

31/12/14

AVERAGE RATE OF 1X , RSS1 PER AUCTION - 2014

1X

RSS1


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OUTLOOK As predicted in our Report last year, the commodities boom had come to an end and all producing countries are being faced with falling prices and severe competition. Sri Lanka’s pride, its high quality export grades: Thick Pale Crepe and premium Sole Crepe were adversely affected due to decreased overseas demand and very little outlet locally for this type of rubber. Currently Exports are further burdened by the Export Cess of Rs.15/- per kilogram which was levied in November 2011 when prices were high, but has still remained in force making export prices unattractive. The market downturn was expected. But with the expected drop in yields from small holders and plantations Companies and the rising costs of production, Sri Lanka’s Growers will all have to face hard times in the near future. We repeat, every effort must be made to grow more rubber and enhance production volumes for the future, by developing new areas suitable for growing rubber, and the re-planting of old plantations owned by small holders which are now over 35 years old. This has to be the way forward.


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ACTIVITIES OF THE ASSOCIATION

ANNUAL GENERAL MEETING – 2013/2014

The 95th Annual General Meeting of the Colombo Rubber Traders’ Association was held on the 13th of June 2014 at the Union Ballroom of the Hilton Colombo Residences (JAIC). Hon. Mahinda Samarasinghe, the Minister of Plantation industries was the Chief Guest and delivered the Keynote Address.

CESS on Rubber

A concept paper under the narration “further strengthening of the CESS on natural rubber will have a negative impact on both rubber cultivation and value addition” was submitted to Dr. P.B Jayasundara, Secretary to the Treasury, Hon. Mahinda Samarasinghe, Minister of Plantation Industries and Hon. Rishad Bathiudeen, Ministry of Industry and Commerce which conveyed to the government to take into consideration “the removal of CESS imposed on special grades of natural rubber sold at high prices that will benefit the export sector”, and “Removing the CESS imposed on special grades of natural rubber sold at high prices which will benefit the export sector” and reconsider further strengthening of the CESS on natural rubber exports and to also consider the removal or reduction of the current CESS on special grades of natural rubber exported (e.g. TCP and Sole Crepe) which is not used by any of the local industries. The industry urged the government to remove the CESS imposed on special grades of natural rubber sold at high prices which in turn will benefit the export sector. Further value addition to these special grades is not possible in Sri Lanka due to the existing domestic rubber product manufactures not using these grades of natural rubber as inputs into their production. Therefore, the said objective of increasing CESS to encourage domestic value addition does not apply to these special grades of rubber.

Rubber Cultivation

Rubber cultivation is the foundation of the value added rubber product industry. According to Sri Lanka Rubber Research Institute (RRI) Sri Lanka’s rubber cultivation has seen a drastic decline over the last forty years. Rubber was cultivated in 214,000 hectares in Sri Lanka in the 1970s but it has dropped to 111,000 hectares (Area under tapping) now. While the rubber production and area under cultivation has dropped, the demand for rubber is expected to go up and Sri Lanka is unable to meet even the current demand.

Therefore, to sustain the growing rubber product sector, it is important to increase the rubber cultivation and production in the country. Supporting, particularly smallholder growers, with reasonable subsidies and the development of high yielding clones to be used in re-planting, is a high priority. CRTA has conveyed to the government to take into consideration this issue on Rubber cultivation at many public forums.

Rubber Auction System

Exporters of rubber in bulk play an important role in the Industry by being largely responsible for the procurement of rubber sold by Licensed Broking Companies, on behalf of the Corporate Sector, through the Public Auction, managed by the Colombo Rubber Traders’ Association and conducted at the offices of the Ceylon Chamber of Commerce.


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There are, of course, some Producers who have chosen to sell their rubber through other channels, directly to overseas Buyers. However, they use the prices realized at the auctions, which are published in the print media, as a bench mark. This is not a prudent policy since, without the benefit of the competition generated at the auction, more likely than not, they will be “under-selling” their product. This, in turn, will impact auction prices, as Exporters operating at the auction will not be able to compete with the lower prices being offered and will be compelled to drop their limits, resulting in a vicious cycle. The rubber cultivation is dominated by small holders who account for nearly 77% of total production. Given the shortage of large scale plots of land, the small holders will continue to dominate the production. Their individual bargaining power in price is low. Since these smallholders, individually, do not have ready access to facilities to transport their produce to Colombo, which, in any case, would be too costly on account of the small volumes produced by each of them that would not have the benefit of economies of scale, they are compelled to sell their produce at depressed prices to dealers. It is critical that these smallholder growers obtain the best possible prices for their rubber, in line with prices realized at the auction, to enable them to remain viable. The rubber traders help increase the bargaining power by increasing competition in the market for natural rubber; thereby help keep the rubber prices high which in turn ensure profitability of production. If the natural rubber exporters are taken out of the picture, the rubber cultivators will depend on few manufactures to buy their production. This will drive down the prices to the benefit of the manufactures and however, it will discourage small holders to engage in rubber cultivation due to low prices and resulting low profitability. It will benefit both the Producers/Sellers and the Exporters/Buyers if all the rubber produced is channelled through the auction system, compelling the Producers dabbling in exports and, even, the local manufacturers of products for the export and domestic markets, to procure their requirement at the auction. This would generate much greater competition for the products and secure optimum prices. Here too the CRTA has conveyed to the government to take into consideration this issue at many public forums.

GLOBAL RUBBER CONFERENCE 2014

Recognized to be one of world’s leading conferences on natural rubber, Sri Lanka was host to the Global Rubber Conference (GRC) 2014, the three-day international event was held from 27 to 30 October, 2015 in Colombo. The GRC is recognized to be one of the world’s leading conferences on natural rubber and NR-based products and is held on an annual basis rotating in different rubber-producing countries.

The event was co-organized by the Sri Lanka Export Development Board (SLEDB) and Confexhub with the support from the Ministry of Plantation Industries and the Ministry of Industry and Commerce, the event saw about 250 delegates from over 25 countries come together to discuss and get updated on the pertinent issues affecting the global rubber industry.

The Global Rubber Conference 2014 was themed “Sowing the Seeds for Sustainable Future”.

http://www.srilankabusiness.com/


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The conference aimed to fulfill five key objectives and they were, to bring together regulatory authorities and commercial players of the rubber industry to provide updates on current trends and future challenges faced by NR industry, to facilitate the exchange of information and subsequently open up new turfs of business opportunities and expansion, to promote industry-wide investment opportunities in Asian countries in general and the host country specific, to provide a platform for policymakers and association heads to discuss determining factors within the industry and to enable industry experts to communicate the latest R&D innovations.

The technical sessions included two keynote addresses on ‘Global Economic Growth Prospects and Commodity Markets’ by The World Bank (WB), USA, Senior Economist Dr. John Baffes and ‘Sri Lankan Government’s Policy on the Development of Rubber Based Product Manufacturing Industries’ by Ministry of Industry and Commerce Secretary Anura Siriwardena, along with technical sessions.

GLOBAL RUBBER CONFERENCE 2014 – STUDY TOUR AND VISIT TO COLOMBO RUBBER AUCTION

50 delegates of the GRC visited the Colombo Rubber Auction on 30th October 2014 as part of their programme and the Ceylon Chamber of Commerce together with the CRTA facilitated their visit. Delegates from over 25 countries visited the auction and they included government officials, commodity and investment analysts, rubber buyers and also sector related service suppliers. Some of the the delegates were from countries such as Malaysia, Thailand, Indonesia, Philippine, Singapore, UK, Germany, Japan and Korea.

THE CEYLON CHAMBER OF COMMERCE

Mr. M.S Rahim and Mr. S. Poholiyadde were nominated to serve on the Committee of the Ceylon Chamber of Commerce for the year 2014-2015. 175th The Anniversary of the Ceylon Chamber of Commerce held at Cinnamon Grand Colombo with the participation of around 520 members and guests. President Hon. Mahinda Rajapakse was the Chief Guest. Opposition Leader Mr. Ranil Wickremasinghe was Guest of Honour. Members who have been with the Chamber for over 100 years were felicitated. In March, a stamp was issued to commemorate the 175th anniversary. Mr. Suresh Shah Director/CEO Lion Brewery Ceylon PLC was re-elected as the Chairman of the Chamber while the vice Chairman is Mr. Samantha Ranatunga for the ensuing year.

THE COLOMBO RUBBER BUYERS’ ASSOCIATION

Mr. Talal Shums served as the representative of the CRBA on the CRTA Committee for the year 2014-2015. The Association held its 80th AGM on Mach 20, 2015 at the Capri Club. Buyers concerns were raised on Weight of the Polythene Bags used for packing of rubber bundles which is being included to the net weight of the rubber. The buyers insisted that the net weight of rubber should not be included in the weight of the Poly bags used for packing of


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rubber bundles. CRTA regulated that the net weight of all the Rubber Bales (without the poly bag) which is packed and sold with a polythene cover and offered at the Rubber Auction held at the CCC should weigh exactly 25 Kgs. Since it has been observed that some sellers pack the rubber bales in 300 gauge polythene bags. As an example a lot of 2500 Kgs nett rubber with poly bags should have a gross weight as follows; (a) 150 gauge polythene bags - 2504 Kgs - 4 Kgs - Tare weight (b) 300 gauge polythene bags - 2508 Kg - 8 Kgs - Tare weight

THE COLOMBO BROKERS’ ASSOCIATION

Mr. Damitha Perera of Forbes & Walker Commodity Brokers (Pvt) Ltd served as the nominee of the CBA on the CRTA Committee during the year under review.

THE PLANTERS’ ASSOCIATION OF CEYLON

Mr. S. Ganeshan represented the PA on the CRTA Committee during the year 2014-2015. The Annual General Meeting of the PA was held on Friday 2, September 2014. The Chief Guest at the event was the Secretary to the Ministry of Finance and Planning, Dr. P. B. Jayasundera. Mr. Roshan Rajadurai was re-appointed as Chairman while the Deputy Chairman is Mr. Sunil Poholiyadde for the ensuing year.

EXPORTERS’ ASSOCIATION OF SRI LANKA

Mr. H. De Silva of Eastern Merchants and Mr. T. Shums of Shums & Company Ltd were nominated to serve on the Committee of the Exporters’ Association of Sri Lanka [EASL] for the year 2013-2014, as the CRTA representative and Alternate, respectively. The Exporters' Association of Sri Lanka, which is affiliated to the Ceylon Chamber of Commerce, held its 17th Annual General Meeting on July 31, 2014. Mr. Rohan P Daluwatte of Tea Tang (Pvt) Ltd was re-elected as the Chairman of EASL. Thereafter, Mr. Fazal Mushin of Link Natural Products (Pvt) Ltd and Mr. Harin De Silva of Eastern Merchant (Pvt) Ltd were elected as the 1st Vice Chairman and the 2nd Vice Chairman respectively.

EASL organized an interactive forum titled ‘Doing Business with China: Free Trade Agreement (FTA) and Beyond’ which was held on November 26, 2014 at On Golden Pond, Taj Samudra Hotel, Colombo. Coinciding with the title of the forum, the discussions by the guest speakers were based on creating an understanding about the opportunities that are available for the private corporate sector in Sri Lanka when doing business with China and the opportunities that may further arise in the event the proposed FTA between Sri Lanka and China is executed. The seminar was featured by Dr. Nishan De Mel, Executive Director of Verité Research Mr. Deshal De Mel, Senior Economist at Hayleys Ltd, Mr.Anushka Wijesinha, Research Economist at the Institute of Policy Studies and the former Secretary General of the Tea Exporters’ Association Niraj de Mel.


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SRI LANKA SHIPPERS’ COUNCIL

Mr. N. Silva of C. W. Mackie PLC was nominated to serve on the Committee of the Sri Lanka Shippers’ Council, as the representative of the CRTA, for the year 2014-2015. The Sri Lanka Custom has established a centralized Export Cargo facilitation Centre through the Port Access Road for container examination and documentation process. This is located adjacent the Port Access Road at No 6, Bloemendhal Rd, Colombo 13. All exporters, BOI and non BOI FCL containers are to be routed through this Centre for monitoring and facilitating purposes. The Objectives of a centralized Export Cargo facilitation center is to facilitate the export cargo clearance through Customs by;

Minimizing the time taken and thereby reducing the cost incurred

Promoting compliant traders and discouraging illegal exports

Exporters will receive the following benefits through the Export Cargo facilitation Centre.

Availability of the Customs services on 24 X 7 X 365 basis

Predictability in Customs clearance time and cost

Proposed one-stop-shop for all the exports

Proposed e-Warranting for the selected exporters

Proposed Green Channel facility for exporters compliants

Sri Lanka Shippers' Council held its 44th Annual General Meeting on the 27th June 2014 at 5.30 p.m. at Cinnamon Lakeside, Colombo. The Secretary to the Treasury, Ministry of Finance & Planning, Dr. P.B. Jayasundara was the Chief Guest and the key note speaker at the AGM. .Mr. Mr. Sean Van Dort assumed responsibility as the Chairman of the Council for the year 2014/15, whilst Mr. Nalin Silva and Mr. Chrisho de Mel were re-elected as the 1st Vice Chairman and the 2nd Vice Chairman of the Council respectively.

SRI LANKA SOCIETY FOR RUBBER INDUSTRY

Mr. Masiri Dias was nominated to represent the CRTA on the Board of the Sri Lanka Society for Rubber Industry for the year 2014. Following are the highlights of the activities undertaken by SLSRI Rubber Master Plan – Sri Lanka Rubber Industry Master Plan has been drafted with technical assistance provided by Asian Development Bank. The draft validated by the private sector has been submitted to the government for necessary implementation support. The Master Plan has set a target of achieving a turnover of USD 3.5 billion by 2024 which include incomes from raw rubber sales, rubber products manufactured, sold locally and exported and rubber wood based products sold. The documents describe the projects and strategic initiatives that must be implemented to achieve the target. Rubber Cluster Young Network (RCYN) - The RCYN is an initiative to involve young industry professionals to become proactive in strategy, planning and policy making activities. Young professionals are those who will be at the helm of the industry in another 10 years when the Master Plan projects begins bearing its intended results. It is they who should be involved in


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planning and driving the Master Plan forward as they are the real beneficiaries. They are expected to look beyond their organizations and collaborate in pre-competitive activities that benefit the industry in general, thereby ensuring that the industry reaches its true potential. To achieve this goal of setting up the RCYN a forum has been created with the participation of those below 45 years from all disciplines of industry as well as from the universities. At present, a team of young rubber industry professionals are actively pursuing the RCYN activities and various events were held for the benefits of Members. They have begun to use social media for communication and a face book account has been opened which is: https://www.facebook.com/pages/Rubber-Cluster-Young-Network/301142750070696 Monaragala Rubber Development Program – the project commenced field operations in 2007. By December 2014, the total area developed has exceeded 5,087 ha and around 400 ha of smallholdings developed in 2008 have come into bearing now. In 2014, IFAD agreed to provide assistance to extend the project to cover Ampara District as well. The aim is to develop another 6,000 ha of rubber smallholdings. Policy Papers – SLSRI released three policy papers which are (i) Impact of CESS on Rubber Industry Competitiveness, (ii) Impact of Rubber Production data anomaly and defects on policy decisions, (iii) Monthly analysis of rubber industry performance.


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APPROVED WAREHOUSES OF BROKER / SELLER REGISTERED NO

LOCATION DETAILS

1

2

3

4

5

6

7

8

SIYAKA PRODUCE BROKERS (PVT) LTD

Natural Resins Lanka (pvt) Ltd 349, Dippitigoda Road, Hunupitiya, Wattala

LANKA COMMODITY BROKERS LIMITED

No 570/5B, Weralatuduwa Road, Mabole, Wattala

FORBES & WALKER WAREHOUSING (PVT) LTD

No.805/4C, Bangalawatta Road, Building-D Mabola, Wattala

JOHN KEELLS WAREHOUSING (PVT) LTD

Paras Industries (Pvt) Ltd, No 91, 1st Avenue, Kereawalapituya, Muturajawela, Wattala

JD & SONS (PVT) LTD

Main warehouse store no: 1,# 106 Weliamuna Road, Hendala, Wattala Main Warehouse, # 109, Weliamuna Road, Hendala, Wattala 455/1 & 349 A, B, & C, Dippitigoda Road, Hunupitiya, Wattala Main Warehouse Store no:2, # 106 weliamuna road,hendala, wattala


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THE CHAMBER BOARD OF ARBITRATORS AND SURVEYORS - 2014

The Following were approved as Arbitrators for the year 2014 – Rubber Mr. M. S. Rahim A. M. Rahim & Co. Ltd Mr. J. B. L. De Silva Eastern Merchants Ltd Mr. S. S. Poholiyedde Kegalle Plantations Ltd Mr. Richard Jansz J. D. & Sons (Pvt) Ltd Mr. U. Bandaranayake Forbes & Walker Ltd. Mr. R. C. Peiris Kotagala Plantations Ltd The Following were approved as Surveyors for the year 2014 – Rubber Mr. U C Bandaranayake Forbes and Walker Commodity Brokers (Pvt) Ltd. Mr. K D P Perera Forbes and Walker Commodity Brokers (Pvt) Ltd. Mr. F X Felix PNVX Cargo Inspection Services (Pvt) Ltd.


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BALLOT FOR THE ELECTION OF THE COMMITTEE – 2015/2016

On the results of the ballot, the following were elected to the Committee of the CRTA for the year 2015-2016:

Buyer Representatives

C.W Mackie PLC Richard Peiris & Co. Limited A .M. Rahim & Co Limited

Eastern Merchants PLC Almar Trading Co. (Pvt) Ltd

Shums & Co Ltd

Seller Representatives

Pussellawa Plantations Ltd Kegalle Plantations PLC

Kelani Valley Plantations PLC Kotagala Plantations PLC

Balangoda Plantations PLC Kahawatte Plantations PLC

BY ORDER OF THE COMMITTEE SGD. FOR SECRETARY

list of members - crtasl.org. n. silva of c.w. mackie and mr.talal shums of shums & company ltd...

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