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Rubber Wood Industry in Kerala

Chapter 3

RUBBER WOOD INDUSTRY IN KERALA

Contents

3.1 Evolution of Natural Rubber

3.2 Global Production and Consumption of NR

3.3 NR in India

3.4. Share of Kerala in Production and Consumption of NR

3.5 Rubber Based Industries in India and Kerala

3.6 Timber Demand and Rubber Wood in India

3.6.1 Wood Import in India 3.6.2 Timber Demand and Production in Kerala 3.6.3 Some Important Aspects OF Rubber Wood

3.7 Production and Consumption of Rubber Wood

3.7.1 World Scenario 3.7.2 Indian/Kerala Scenario

3.8 Structure of Rubber Wood Industry in Kerala

3.8.1 SPRWP 3.8.2 Plywood


74

RUBBER WOOD INDUSTRY IN KERALA

In the light of the discussion made in the previous chapter on value

chain, it is necessary to analyse the structure of rubber wood value chain in

Kerala. However, it is worthwhile to begin any discussion on rubber wood

with a cursory glance at Natural Rubber (NR). The ensuing section deals

with natural rubber and its evolution. This is followed by production and

consumption of natural rubber, an overview of rubber based industries,

major issues of rubber wood and various aspects of the rubber wood

industry.

3.1 Evolution of Natural Rubber

Natural rubber (NR), one of the most valuable raw materials, was

known to man from very olden days onwards. There is evidence that rubber

was used at an early period in Ethiopia for making play balls and other

objects. From Ethiopia a ball game spread to Egypt and then to Lyndians to

whom Herodotus attributed its invention (Schindrowitz, 1954).The first

Europeans who visited America had described the use of rubber collected

from trees in tropical areas. Latex yielding trees Hevea and Castilla are

common over extensive areas of jungle, and the rubber was used for

making simple household articles. Most of the rubber going to Europe

came from Hevea and especially Brasiliensis growing in the Amazon basin

of Brazil.


75

The first major advance rubber cultivation was made in the late 19th

century consequent on Britain’s efforts to introduce new cash crops to its

south Asian colonies of Ceylon, India and Singapore. In 1876 Henry

Wichnam, a local planter acting for the British collected Hevea brasiliensis

seeds from the lower Amazon of Brazil and shipped to England where they

were germinated in the Kew tropical herbarium near London. These

seedlings were sent to Ceylon, West Malaysia and India. The NR sector

which evolved under the colonial patronage had an estate system of export

oriented production facilitated by cheaper land, labour, European

ownership, capital and technology.

3.2. Global Production and Consumption of NR

The NR output across world increased from 3000 tonnes in 1860 to

8.70 million tonnes in 2005.The details are given in table 3.1

Table 3.1 Trend in the World Output of NR

Year Output( million tonnes)

1860 0.003

1900 0.045

1910 0.078

1930 0.14

1950 1.89

1990 5.21

2000 6.76

2003 7.97

2005 8.70

Source : IRS , various years


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Table 3.1 shows a tremendous leap in the output of rubber since

1930 due to the sharp increase in planted area. The total planted area in 13

top NR producing countries has increased from 9.03 million hectare in

1998 to 9.22 million hectare in 2005 (IRS 2006). The country-wise

production data shows that the rubber wood production is concentrated in

four major countries viz, Thailand, Indonesia, Malaysia and India. It is

shown in diagram 3.1.

Diagram 3.1 Production of NR in Major Producing Countries (Million tonnes)

Source: IRS, 2006

The global consumption pattern of rubber in 2005, shows that out of

the total consumption 42 per cent is NR, and the remaining 58 per cent is

synthetic rubber (SR). It is of interest to note that the share of NR had been

only 35 per cent in 1990.

The relative share of Asia in total NR production has been very

significant as it was found to be more than 85 per cent in 2005. At the same

Mill

ion t

onn

es


77

time it is to be noted that the relative share of Asia in world NR

consumption was less than 48 per cent during the same year (IRS 2006).

Table 3.2 shows the details of country-wise share in production and

consumption of NR

Table 3.2 Production and Consumption of NR in Major Producing Countries (2005p)

Country/region

Percentage

share in world

production

Percentage

share in world

consumption

Domestic

consumption

as % of

production

Thailand 32.55 3.75 11.64

Indonesia 26.09 2.51 9.73

Malaysia 12.94 4.40 34.36

India 8.87 8.98 102.2

China 4.92 20.80 426

Sub-total 85.37 40.44 48.81

Others 14.63 59.55 52.19

World Total 100 100 -

Source: IRS, 2006 p = provisional

It is made clear in table 3.2 that Thailand has the highest share in NR

production but their share of consumption in percentage of their production

is only 11.64 per cent. China’s share in world production is only 4.92 per

cent but their consumption of NR is 426 per cent of their production. In

India the production is only 8.8 per cent of the world output of NR but our

consumption in percentage of production is 102 per cent. Forty four

percent of the NR consumption in the world is done by China the US and

Japan whereas India’s consumption is 8.98 per cent. A detailed account of

NR in India is given in the ensuing section.


78

3.3. NR in India

The history of NR in India is the history of NR cultivation in Kerala.

India is mainly responsible for the introduction of NR to the east. It was the

Indian office in London that financed Sir Henry Wickam’s expedition to

the Amazon valley in Brazil to procure rubber seeds in1876. With the

invention of pneumatic tyre and the development of internal combustion

engines by the close of 19th century, a frantic effort was made all over the

world to obtain more rubber. The increased demand (and the resulting

shortage in supply) raised the price of rubber to an all time record in 1910.

By then Mundakayam in Kerala had become the leading centre of rubber

plantations in India, with an area of 4000 hectare. This was around half of

the area under rubber plantations in the country. This exorbitant price led to

a scramble for planting rubber in the west coast of India. But during the

depression years the Indian rubber industry faced a severe fall in rubber

prices and new plantations were severely limited in order to prevent further

expansion of production capacity. Replanting was also strictly limited. By

1942 the situation in India had changed drastically. The conquest of

Malaya and other South East Asian countries by Japan had left the allied

nations with India and Ceylon for obtaining rubber. This situation brought

about a complete transformation in the prospect of rubber plantation in

India. As a result of several measures adopted by the Government of India,

a spurt in planting activities occurred between 1943 and 1946.


79

After the World War II a conference of rubber producing interests

was organized by the rubber growers and the Government. On the basis of

the recommendations, the government decided to set up the Rubber Board

of India to look after the development of the rubber plantation and rubber

industry. As per the Rubber Act of 1947, rubber plantations over 20.23

hectares (50 acres) under a single ownership is treated as estates, and those

whose area ranges up to 20.23 hectares are treated as holdings. Table 3.3

shows the composition of rubber cultivation in India.

Table 3.3 Classification of Holdings and Estates According to Land Size

Year Holding Estate Grand total

Units (lakh)

Area (lakh

hectares)

Units (lakh)

Area (lakh hectares)

Units (lakh)

Area (lakh

hectares)

1955-56 0.27 0.36 446 0.46 0.27 0.82

1960-61 0.57 0.76 547 0.54 0.58 1.30

1980-81 1.95 2.09 553 0.69 1.96 2.78

1990-91 7.81 3.97 332 0.78 7.81 4.75

1999-00 9.86 4.90 321 0.68 9.87 5.59

2004-05 10.29 5.18 273 0.66 10.29 5.84

Source: Compiled from IRS.Vol.18, 29.

It is clear from table 3.3 that there has been an increasing rate of

planted area devoted to rubber in the small holding sector.

During the 1950s and 1960s, large scale expansion of rubber

cultivation took place in response to the move in the state of Kerala for

imposition of a ceiling on land holdings from which rubber plantations

along with other plantations were exempted. Prevalence of a steady and


80

remunerative price for rubber, diversion of extensive areas under disease

infected coconut plantations in central Kerala to rubber plantation,

intensification of R&D programmes by the Rubber Board during this

period etc. also contributed to the increase in production of rubber.

As a result of industrial recession during the 1970s the area newly

planted fell to 52000 hectare in 1970 from 82000 hectare in the 1960s. By

1979-80, given the short fall in the NR supply in the years to come, an intensive

rubber production drive was launched by Rubber Board and others for stepping

up the rubber production. In 1979-80, for the first time a subsidy-cum credit

scheme was introduced on a pilot basis for encouraging new planting. Noticing

the excellent response to the scheme, an integrated scheme known as Rubber

Plantation Development Scheme was launched in 1980-81 for accelerating new

planting and replanting. The area under cultivation increased from 0.75 lakh

hectare in1950-51 to 5.84 lakh hectare in2004-05. The details of the trend in the

production of estates and holdings is given in table 3.4

Table 3.4 Production of Holdings and Estates in India ( lakh tonnes)

Year Holdings Estates Total

1950-51 0.03(21.4) 0.12(78.6*) 0.16

1960-61 0.06(25.4) 0.19(74.6) 0.26

1970-71 0.52(55.86) 0.41(44.14) 0.92

1980-81 1.08(70.4) 0.45(29.6) 1.53

1990-91 2.68(81.46) 0.61(18.54) 3.29

1999-00 5.45(87.52) 0.78(12.48) 6.22

2004-05 6.86(91.46) 0.64(8.54) 7.50

Source: Compiled from IRS. Vol.19, 29 *percentage share in parenthesis


81

It is evident from table 3.4 that the share of small holdings in total

output increased from 21.45 per cent in 1950-51 to 91.46 per cent in 2004-05.

Though the share of estates in total production declined, the absolute level of

production increased from 0.12 lakh tonnes to 0.78 lakh tonnes in 1999-00.

However, in 2004-05 estate production declined to 0.64 lakh tonnes.

Although India faces sub-optimal agro-climatic conditions compared to

other major NR producing countries, it has the highest yield per hectare. This

mainly owes its credit to the excellent work done by Rubber Research

Institute of India (RRII). This institute carries out comprehensive research on

all aspects of rubber. Among the major achievements of RRII, breeding and

selection of high yielding clone RRII 105 is foremost. Another factor which

contributed to this highest yield per hectare is the receptivity of the Indian

growers to modern technology. Over the last fifty years the productivity of

rubber in India has increased from 300 kgs per hectare to 1479 kgs (IRS).

3.4. Share of Kerala in production and consumption of NR

A comparison of the production and consumption of NR in India and

Kerala is given in table 3.5

Table.3.5 Area /Production/Consumption of NR in Kerala

Area, Production,

consumption

India Kerala % share of Kerala

90-91 04- 05 90-91 04-05 90-91 04-05

Area (lakh hectare) 2.17 5.84 1.98 4.85 91.2 83.15

Production(lakh tonnes) 3.29 7.49 3.07 6.9 93.29 92.1

Consumption ( lakh tonnes) 3.64 7.55 0.55 1.25 15.11 16.55

Source: IRS, 2006.


82

It is clear from table 3.5 that the share of Kerala in NR production

was 93.29 per cent in 1990-91, but it declined to 92.1 per cent in 2005. At

the same time the gross production increased from 3.07 lakh tonnes to 6.9

lakh tonnes during the same period. The area of production also increased

from 1.98 lakh hectare to 4.85 lakh hectare in 2004-05 though Kerala’s

share in India declined from 91.2 per cent to 83.1 per cent during the same

period. India is the fourth largest consumer of NR in the world after China,

the US and Japan. Though Kerala produces 92.1 per cent of the rubber in

India, its consumption was only 16.56 per cent in 2004-05.

3.5. Rubber Based Industries in India and Kerala

It has already been stated that the Kerala holds a monopoly in the

growing of NR though its consumption is comparatively low. The major

explanatory variables attributed to the observed trends in production and

consumption are historical and structural factors, higher wages, inadequate

infrastructural facilities and institutional support and deficiencies of the local

entrepreneurship (Govt, of Kerala, 1984; Subramanian and Pillai, 1985; Issac

and Tharakan, 1986; Thampi, 1990; Mahadevan, 1991; Mathew, 1999).

The major guidelines emerging from the Malaysian experience for

formulating an appropriate rubber based industrial planning in Kerala shall

include selection and promotion of rubber products for the global market

with higher NR and labour contents, high value addition, free of import

restrictions, negligible brand loyalty and flexible delivery schedules. In the


83

present context, the value addition foregone from the two major by-

products of rubber plantations in Kerala, viz; rubber wood and rubber

honey is estimated to be more than Rs.29000 million. Therefore, a

conscious policy intervention based on perspective planning has to

integrate the industrial potential of rubber products and by-products in

Kerala (George, 2005).

Since rubber wood is a major by-product of rubber plantations, it is

inevitable to analyse the role of rubber wood in timber industry. The

Analysis of the timber demand and imports in India will give the

background for justifying the role of rubber wood in timber industry.

3.6. Timber demand and Rubber Wood in India

The industrial wood production in the primary processed sector (log,

sawn size, veneer, plywood) increased from 21.4 million m3 in 2002 to

33.85 million m3 in 2005. The industrial wood demand is likely to grow

from 58 million m3 in 2005 to 153 million m3 in 2020 (ITTO, 2005). Due

to the shortage of timber, the capacity utilization of organized sector of

plywood industry in India declined from 64 per cent in 1967-68 to 33 per

cent in 2001- 02. Ecological considerations led to several constraints

imposed by Supreme Court which accentuated the problem further. This

compelled the country to import timber from other countries on the one

hand and to seek alternatives like rubber wood on the other.


84

3.6.1 Wood Import in India

India is one of the largest importers of logs in the global trade. India

and Japan accounted for 68 per cent of the reported log export volume in

2003 (ITTO). In fact, India is now the second largest importer of tropical

log, overtaking Japan for the first time in 2003 with imports of just over 2.4

million m3, which is up 10 per cent from 2002 levels. The import of

primary processed wood was 3.75 million m3 in 2005. The trends in the

import of wood logs and wood products are given in table 3.6.

Table 3.6 Trends in the Import of Wood Logs and Wood Products ( Rs. crore )

Item 2002-03 2003-04 2004-05

Wood logs 1603.39 3068.14 3685.47

Sawn timber 34.18 56.60 59.50

Veneer 15.99 16.55 22.03

Particle board 34.64 60.87 75.32

MDF/Hard board 48.76 60.05 78.05

Plywood 16.88 19.31 22.83

Wooden furniture 32.25 56.32 74.95

Source: Directorate General of Commerce Intelligence and Statistics, Kolkotta

It is evident from table 3.6 that when compared to 2002-03 the

import bill of wood logs increased by 130 per cent in 2004-05 .The import

of wooden furniture increased by 132.4 per cent during the same period.

The trends in the import of wood logs is shown in diagram 3.2


85

3685

3068

1603

2431

2092

1860

1428

1436.9

2

755.5

2

875.7

1

0

500

1000

1500

2000

2500

3000

3500

4000

1995-

96

1996-

97

1997-

98

1998-

99

1999-

00

2000-

01

2001-

02

2002-

03

2003-

04

2004-

05

Year

Valu

es (

Rs C

rore

)

Diagram 3.2 Import of Wood Logs (Rs. crore)

Source: Directorate General of Commerce Intelligence and Statistics, Kolkotta

It is clear from diagram 3.2 that the import of wood logs declined in

2002-03 but it again increased in 2003-04 and 2004-05.

3.6.2. Timber Demand and Production in Kerala

Out of the annual production of 14.6 million m3 of wood in the state,

about 83 per cent was from homesteads, 10 per cent from estates and seven

per cent from forests. Although Kerala was a net exporter of hardwood

timber, presently about 50 per cent of its wood requirement in cities are

met from import. It is estimated that the volume of timber import to the

state is to the tune of Rs. 500 crore per annum ( FAO, 2005).

In this context, the utilization two million m3 rubber wood from

Kerala for the production of value added wood products is significant in

reducing the import bill, bringing down the rising price of timber,

generation of additional income through value addition etc. Rubber wood

has started playing an active role not only in India but also in other parts of


86

the world. Therefore it is worthwhile to analyse some important aspects of

rubber wood.

3.6.3 Some Important Aspects of Rubber Wood

The most distinctive feature of rubber wood is that it is a renewable

by-product of rubber plantations. The supply of rubber wood is

inexhaustible as the plantations are maintained on a sustainable yield

rotation of 25-30 years. Rubber wood has traditionally been used as a

cheap source of fuel wood in most of the countries where rubber

plantations are abundant. It is also used industrially for brick burning and

tobacco curing. Owing to its lack of durability the wood was not

traditionally used as timber except in timber-scarce countries such as India

and Sri Lanka, where it has been used for general utility purposes.

In fact rubber wood is not much useful in its pure form. The proper

treatment and seasoning of this wood make it commercial and useful for

industrial purposes. (The treatment and seasoning of rubber is explained in

appendix 2 and 3). Being naturally non-durable, rubber-wood is not

economically usable without preservative treatment. Through research and

development efforts protective measures have been prescribed which are

now routine for rubber wood processing.

The average production of rubber wood per hectare is 150 m3.

Rubber wood even after chemical treatment costs much less than other

timbers and will have a service life ranging from 25 to 100 years,


87

depending on the method of treatment. Rubber wood is a homogeneous,

pale straw coloured wood with a density of 456-620 kg/m3. The wood has

straight grains and medium texture without any characteristic odour. The

strength properties of rubber wood are comparable to sal indicating that it

is sufficiently suitable for packing cases and crates, dunnage pallets, match

veneers, splints, hardboard and compressed wood shuttle blocks. Being a

moderately steady timber, it is suitable for ordinary furniture and bend

wood items, doors and window frames and shutters, provided it is properly

seasoned and chemically treated. Rubber wood is fairly easy to re-saw,

cross cut, plane turn and mortise. It has good machining properties for

making furniture, door and window components. Rubber wood has good

nail and screw holding capacity. Painted surface of rubber wood performs

well. Studies on finish adaptability have indicated that rubber wood can be

spirit polished satisfactorily using turkey amber coloured chalk powder

base to obtain good appearance.

Freshly felled rubber wood logs contain moisture even up to 65 to

75 per cent of weight of solid dry timber. Due to the presence or movement

of moisture in wood and particularly if it is not uniformly distributed,

differential stress are developed in different parts of the wood.

Consequently cracks, shrinkage, warping etc. develop in the material and

hence it is always necessary to bring down the moisture to a uniform level

by seasoning.


88

Rubber wood is highly susceptible to sap stain, fungi, and insects

and it can be controlled by proper treatment. However, the presence of

tension wood results in warping. Therefore, only selected wood can be

used for furniture, door and window frames and shutters. The problems of

warping and bending are now solved to a great extent by the production of

finger jointed boards.

As rubber wood is a non-durable timber and shows some tendency to

surface cracking, warping, bowing and end splitting, it should be properly

seasoned and of treatment. Salleh (1984) reported 61 different products

made from rubber wood. It’s most important uses are in furniture and

furniture parts, parquet, paneling, wood-based panels (particle board,

cement and gypsum-bonded panels, medium-density fiber board and Edge

Glued Panel board), modified timber, improved timber and wood polymer

composite. Edge Glued Panel boards (EGP) are recently produced in India

using rubber wood sawn sizes, while wood polymer composite and

modified timber are not commercially produced in India.

A disadvantage of rubber wood is the smaller sizes available compared

with timber from forest species, which is now overcome by producing EGP

boards and particle boards. The development of appropriate processing

technologies capable of improving the inherent properties of rubber wood

made it a sustainable substitute for conventional hardwood species on a

variety of end uses and contributes to the environmental conservation.


89

3.7 Production and Consumption of Rubber Wood 3.7.1. World Scenario

As 95 per cent of the rubber cultivation in the world is in Asian

countries, the production and processing of rubber wood is also mainly

concentrated in Asia, particularly Malaysia, Indonesia, Thailand and India.

The inexpensive wood from plantation rubber trees, which are felled when

they no longer yield adequate latex, is finding a market in high-value end

products traditionally associated with more valuable hardwoods such as

teak and rose wood. In 1990 the total annual available volume of rubber

wood in the area of the Association of Southeast-Asian Nations (ASEAN)

was estimated to be about 17 million m3 (Ser, 1990).

More than 80 percent of the 7.2 million hectare of plantations

established worldwide for latex production in 1999 is in Southeast

Asia. Seventy percent of the total plantations (or 5.2 million hectare) is

in Indonesia, Malaysia and Thailand (FAO, 1999). For decades,

Malaysia had the largest area, followed by Indonesia and Thailand.

With increasing wages and decreasing rubber prices in Malaysia,

labour-intensive production of natural rubber in larger estates is slowly

shifting to lower-wage countries in the region, while in Malaysia

plantations are increasingly replanted with oil-palms (Elaeis

guineensis). The trends in Malaysian rubber cultivation from 1991 to

1998 are shown in table 3.7.


90

Table 3.7 Area Replanted with Rubber Trees in Malaysia (thousand hectare)

Year Hevea Other crops Total Hevea in

total (%)

1991 31. 50 7. 70 39. 20 80

1992 33. 00 8. 40 41. 40 80

1993 31. 10 10. 40 41. 50 75

1994 26. 10 12. 80 38. 90 67

1995 22. 90 14. 00 36. 90 62

1996 21. 60 13. 00 34. 60 61

1997 11. 30 13. 00 24.30 47

1998 9. 10 11. 00 20.10 46

1998 9. 10 11. 00 20.10 46

Source: FDM Asia (1999).

It is evident from table 3.7 that the area under rubber replantation in

Malaysia declined from 80 per cent in 1992 to 46 per cent in 1998.

However, rubber wood sawing and downstream processing industries in

Peninsular Malaysia are well developed. In 1993, 116 stationary and 26

mobile sawmills i.e. 20 percent of Malaysian saw mills processed only

rubber wood (MPI, 1993). In addition, rubber wood has been used as the

raw material for a growing panel industry. In the 90s there were four

particleboard mills, four molded particleboard mills, one wood cement

board mill and seven medium-density fiber board mills use primarily

rubber wood (Forestry Department, Peninsular Malaysia, 1998). The

number of mills has increased from 148 in 1982 to more than 3500 in 2000.

The price of rubber wood has risen from US $150 per m3 in mid 1980s to

U.S $ 225 per m3 in 2000. Rubber wood furniture accounts for 80 per cent


91

of the furniture export from Malaysia. About five per cent of the furniture

manufacturers are large, but they contribute 70 per cent of the industrial

output (Ratnasingam, 2003).

The trend in the export of rubber wood furniture in Malaysia is

given in table 3.8

Table 3.8 Exports of Rubber Wood Furniture from Malaysia (US $ million)

Year Export ($million)

1991 74.2

1992 106.0

1993 197.1

1994 297.4

1995 502.4

1996 439.8

1997 532.7

1998 683.3

Source: Malaysian Timber Industry Board Statistics cited in FDM Asia (1999)

In Malaysia, rubber wood has outperformed some of the traditional

furniture timbers in export earnings. In 1994, exports of rubber wood

furniture brought in US $ 297 million, accounting for 70 percent of

Malaysia's furniture exports. In 1998, the country exported about US $ 683

million worth of rubber wood furniture (Table 3.8).

Exports of sawn rubber wood from Malaysia increased from 903 m3

valued at US $35,000 in 1979 to 2,21,361 m3 valued at US $10.5 million in

1989, which indicates the tremendous potential of this timber. In order to


92

promote the development of the downstream rubber wood industry for

added value, Malaysia introduced an export levy of 120 Ringgit (M$) per

m3 (US$33.3) on sawn rubber wood. This resulted in a decline in exports of

the sawn timber to 103 478 m3, valued at US$13.3 million, in 1990 and to

71 261 m3, valued at US$11.9 million, in 1991. However, the levy

achieved its goal. Since exporting sawn timber was less advantageous and

the export of further processed rubber wood products was not taxed,

Malaysians invested in downstream processing. Together with the

increasing international demand for rubber wood products, the levy thus

triggered an investment boom in the Malaysian rubber wood industry as

well as an increase in export of processed products (Table 3.8) which more

than compensated for the reduced export of sawn rubber wood.

Some of the large international furniture companies, such as IKEA,

have been sourcing rubber wood products from Malaysia since the early

1990s for distribution to their customers worldwide. Some of these large

companies have linked up with furniture manufacturers to ensure that the

supply of rubber wood products meets the companies' quality and design

requirements; such linkages facilitate the transfer of technical skills and

knowledge to local manufacturers.

Some confusion may be caused by the variety of names under which

rubber wood is marketed. It has been called rubber wood, para wood, hevea

wood, hevaru, Malaysian ash and Malaysian oak. The latter two are


93

misleading, giving the impression of similarity in properties to oak or ash.

It would be beneficial to adopt a universally accepted common name for

the timber to avoid wrong expectations by consumers. In the past it has

been suggested that the name hevea wood be used but it is not in use at

present. However to dispel the cheap image associated with the material,

rubber wood has been officially renamed as ‘Malaysian White Oak’

in 2002.

The rubber wood sawn timber industry in Thailand is well

developed, with a total of about 100 mills. Downstream rubber wood

processing is experiencing very rapid growth, which is attributable in part

to the depletion of the country's natural timber resource, the logging ban in

natural forests and the diminishing supply of teak. Since a large portion of

the sawn wood produced in Thailand is processed and used locally (Ser,

1990), Thailand's exports of sawn rubber wood timber are insignificant

when compared with those of Malaysia.

In Indonesia, attempts were made in the early 1980s to develop a

rubber wood sawmilling industry to supply sawn-timber to Singapore,

Japan and Taiwan Province of China. Because of subsequent unfavourable

government policies and regulations and a continuous demand for

indigenous timbers, the industry did not develop significantly at that time.

However, since the 1980s a rubber wood processing industry has been

developing in Indonesia.


94

3.7.2. Indian/ Kerala Scenario

As 83 per cent of the area of rubber cultivation in India is in the

state of Kerala, the discussion need to focus primarily on the

production of rubber wood in Kerala. Until 1960s rubber wood was

generally regarded as a non- durable wood, and was mainly used as

firewood. The steady rise in demand for timber and the dwindling

sources of supply resulted in increase in the prices of conventional

species. Consequently, from the late 1960s onwards rubber wood began

to be used as the next best alternative for making packing cases. The

rise in favour of rubber wood entered a new phase when it began to be

used in the match industry. From mid 1980s the plywood sector also

began to use rubber wood and the practice became extensive since

1990. However, the status of rubber wood underwent significant

changes by adopting appropriate technologies for converting the timber

for a variety of industrial applications. Though secondary processing of

rubber wood in Kerala was started during the 1960s (with the

establishment of two processing units, one each in Kottayam and

Trichur districts) the industrial activity on a commercial basis marked

tremendous growth only during the early 1990s.

It is reported that in 1993 there were 31 secondary rubber wood

processing units in India out of which 26 units were in operation with

pressure impregnation and kiln drying facilities (Joseph and George, 1996).


95

There was a further spurt in rubber wood processing activity and the

number of units in India increased to 50 in 1996. The survey conducted by

Viswanathan et al. in 1995-06 covered 42 processing units located in

Kerala, Tamilnadu and Karnataka. The findings of the survey is given in

table 3.9

Table 3.9 State-wise Distribution and Growth of Rubber Wood Processing Sector in India

State

No. of

units in

operation

Established

between

1960-90

Established

between

90-96

Small

units Others

Total

Surveyed

Kerala 36(72) 11 17 19 9 28

TN 9(18) 2 7 6 3 9

Karnataka 5(10) - 5 0 5 5

Total 50(100) 13 29 25 17 42

Source: Viswanathan et al., 2000

Figures in parenthesis denote percentage

The other major findings of the above survey are the following.

a. Seventy nine per cent units had tertiary processing like furniture,

door, furniture components and other moldings

b. Total estimated installed capacity was 57.79 m3.

c. The average capacity utilization was 51 per cent

d. High proportion of indirect procurement of rubber wood (66% of

logs and 82% of sawn timber)

e. Thirty three per cent of units exporting finished products.


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The various products from rubber wood is given in table 3.10

Table 3.10 Products Manufactured with Rubber Wood (1995-96)

Type No. of units Percentage*

Furniture and furniture components 17 40

Paneling, shutters, doors, windows and door frames 13 30

Flooring tiles, brush backs/handles, table tops 11 26

Other components, moldings 11 26

RSKD,S4S 9 21

Source: estimates of RRII * Percentage exceeds 100 because the same unit produces more than one product.

George et al.(1995-96) estimated the current and potential value

addition in Indian rubber wood sector. The estimate was based on

current and potential pattern of consumption of stem wood, extent of

value addition, recovery rates and waste disposal and prevailing prices

of logs of different girth measurements and different types of rubber

wood based end products in the world market. The details are given in

table 3.11.

Table3.11 Current and Potential Value Addition in Indian Rubber Wood Sector 1995- 2006 ( Rs. crore)

Value addition Current Potential

Gross value added Rs.836.26 crore Rs. 3506.12 crore

Net value added Rs. 625.13 crore Rs. 3294.99crore

Extent of vale addition in % 296% 1561%

Value added foregone - Rs.2669.86 crore

Log level value of stem wood Rs.211.13 crore

Source: estimates of RRII


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3.8. Structure of Rubber Wood Industry in Kerala

The rubber wood processing in India can be broadly classified into

two; primary processing and secondary processing. The primary processing

consists of saw milling and peeling, sawn planks, packing cases, safety

matches and plywood. The two important features of the primary market

are: i) dominant role of intermediaries ranging from logging contractors to

the saw millers and ii) a comparatively low level of vertical integration.

The saw mills processing rubber wood in India have an inbuilt arrangement

to manufacture packing cases/ packing case materials. Around 90 per cent

of the sales of saw mills consisted of packing cases and packing case

materials, and only 10 per cent was used as sawn planks for secondary

processing. Eighty percent of the peeling units operating in the primary

processing sector are engaged in peeling and marketing of the veneer.

Twenty percent of the peeling units have plywood manufacturing facility

(George 2002). Though the share of secondary processing units in rubber

wood consumption increased from 2.2 per cent in 1984-85 to 12 per cent in

1999-2000, the primary processing sector has a predominant position.

However, since SPRWP and plywood have greater value addition these

sectors are discussed separately in the following sections.

3.8.1. SPRWP

Secondary processing represents processing the sawn timber by

chemically treating and seasoning the sawn planks into Rough Sawn Kiln

Dried (RSKD), and then to Four Side Surface planed sawn planks (S4S).


98

Some firms use the S4S directly to manufacture value added furniture, door

and other products and components. Some firms use S4S to produce Edge

Glued Panel boards (EGP boards), and these boards are used to produce

furniture and components, building materials (doors, paneling, shutters,

windows and door frames, flooring tiles etc.), industrial components

(textile bobs, brush backs, handles etc.).

Immediately after sawing the rubber wood, it is first treated

chemically to protect it from the attack of fungi and insects with suitable

wood preservative in cylindrical chambers with facility to create and

maintain vacuum pressure. The porous anatomical structure of the tree

makes it amenable to chemical impregnation process which takes three to

four hours to complete. The details of chemical impregnation are given in

appendix.2

Immediately after preservative treatment the wood is subject to

seasoning to bring down the moisture content from 60 per cent to about 10

to 12 per cent. Seasoning done at controlled conditions of temperature and

humidity ensures uniform drying of wood. The details of seasoning are

given in appendix-3.Being a short rotation plantation timber with low girh,

availability of wider and longer planks/sections of rubber wood is difficult.

The innovation of EGP boards has revolutionized the SPRWP sector

in this aspect. Certain defects of RSKD such as tension wood, warping and

bending have been rectified by finger jointing small sizes of rubber wood.


99

Since rubber wood is comparatively of low girth, and there are large

sections with short length, these sections can be effectively used in

secondary processing through finger jointing. EGP boards have more

strength and durability and also greater width and length when compared to

RSKD. It is available in 8 x 4 feet size with thickness varying from 9 mm

to 48 mm. By virtue of these advantages of EGP boards have been

increasingly used in door, office/shop furnishing, Kitchen/bedroom

paneling and furnishing, furniture etc. Another advantage of EGP board

against Plywood/particle board/MDF board is that any type of carpentry

and designing work can be done on these boards. It is also available in

original rubber wood colour or in any stained form (eg. rose wood /

teakwood). Moreover, lamination helps to conceal the joints.

Though the production of EGP boards with rubber wood started in

Malaysia in early 1970s, and the production of it in India started only in

1989 when the VR Wood Treats Public Limited, a 100% exporting unit,

was set up in Cochin Export Processing Zone. This was followed by the

emergence of another unit named Park Engineering, Cochin in 1994 and

Andamans Timber Industries Limited in Thalassery in 1996. By 2001-02

Rubber Board Started its own unit with the brand name ‘India Wood’ in

Kottayam to manufacture doors with EGP boards on a large scale. Another

large scale unit came into existence in 2001 (Rubco Huat Private Limited,

Thalassery ) for the manufacture of EGP boards (Rubwood) and furniture.

At present there are 12 EGP making units in Kerala, out of which 6 units


100

are producing other value added products like furniture and door in

addition to EGP. The Finger Jointed Rubber wood Manufacturers’

Association in India (FIRMA) came into existence in 2007 with its head

office in Cochin for the promotion of the sector and there are 14 members

in it. The details of manufacturing EGP boards, its advantages and current

prices are discussed in appendix-4.

3.8.2 Plywood

Plywood is made by gluing together a number of thin veneers or

plies of softwood or hardwood. There are always an odd number of veneers

and each ply is at right angle to the one below, lending greater strength to

the product. The more veneer used, the stronger the plywood becomes. The

suitability of a sheet for a particular application is determined by the type

of glue and veneer. The different varieties of plywood available in the

market are MR grade plywood (moisture resistant), BWR (boiling water

resistant), BWP (boiling water proof), commercial grade, film faced

dandified plywood, decorative laminations, flush door, block board, air

craft plywood, marine plywood, structured plywood, interior plywood,

exterior plywood, shuttering plywood etc. Plywood is environment friendly

as it is a natural product made from renewable resource. Pound to pound,

plywood is stronger than steel in static bending strength. What makes

plywood so strong is its unique cross layered structure. The adhesive used

to bond the veneers in plywood are actually stronger than the wood itself.

The plywood manufacturing process achieves a more complete utilization


101

of the log than lumber manufacturing. No saw dust results from either

rotary cutting or slicing. (The different stages in the plywood processing is

given in appendix 5)

A great variety of products in various sizes and shapes can be

manufactured from plywood like chair backs and seats, domes, bowling

alley channels, pianos etc. Plywood was first introduced in India as a

packing material to pack tea (Chirayath, 1966). Towards the close of 19th

century a large number of tea estates were set up in Assam, West Bengal

and Kerala. The requirements for tea chest plywood grew steadily and the

value of imports increased from about Rs 23 lakh in 1906-07 to 90 lakh by

1924-25. The tea industry experienced great hardship during the periods of

the two world wars when import of tea chest plywood could not be made

from Europe due to shipping difficulties. The 2nd world war gave a great

fillip to the setting up of indigenous plywood industry. During this period

and the period closely following the war years, a large number of factories,

both big and small, emerged, first for the manufacture of tea chest plywood

and subsequently for many other diversified products.

The first plywood factory in India was established in Assam in 1918.

The number of approved plywood factories in the country has increased

from three at the beginning of the World War II to 71 in 1965 (Chirayath

1966). The number of registered plywood factories in India was 4235 in

1999-2000. Registered manufacturers account for 15 per cent of the total


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plywood produced in India, producing approximately 30 million m3 of

plywood and block boards annually. Due to various reasons the production

of commercial plywood in India declined from 9.8 million m3 in 2001-02 to

5.37 million m3 in 2004-05(CSO, 2005). The capacity utilization in Indian

plywood industry is given in diagram 3.3

53

51

47

55

59 60

64

56

42

34

32 33

0

10

20

30

40

50

60

70

1990-

91

1991-

92

1992-

93

1993-

94

1994-

95

1995-

96

1996-

97

1997-

98

1998-

99

1999-

00

2000-

01

2001-

02

Year

Perc

enta

ge

Diagram 3.3 Capacity Utilization in Plywood Industry in India (%)

Source: Industrial Data Book 2002-03 CIER

It is made clear in diagram 3.3 that the capacity utilization of the

plywood industry in India declined from 64 per cent in 1996-97 to 33 per

cent 2001-02. This is mainly due to the shortage of forest wood.

The first plywood factory in Kerala was established in Kallai in

1937. As on 31-12 1980 there were 513 plywood, splints and veneer units

in Kerala (Economic Review 1990). The details of plywood units in Kerala

at present is given in table 3.12


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Table 3.12 Details of Plywood Units in Kerala (registered SSI)

Product name No of units Gross output

2001-02

(Rs. crore)

Employment

up to

2002

up to

2006

up to

2002

up to

2006

Plywood and veneer 474 549 110.49 4700 5392

Flush door 51 69 4.13 384 503

Other plywood 58 94 5.76 627 886

Plywood chests 17 19 2.65 138 151

Source: Report on 3rd All India Census on SSI in Kerala 2003-04 and Directorate of

Industries and Commerce, 2007.

It is evident from table 3.13 that the total number of plywood and

veneer units in Kerala increased by 21.83 per cent between 2002 and 2006

(600 to 731). The increase is made possible by the availability of rubber

wood in Kerala. Rubber wood is used as the core veneer, especially in the

production of commercial grade plywood (Price details given in appendix

6). The total employment also increased by 18.5 per cent during the same

period (5849 to 6932). In 2004-05 there were 59 plywood units from

Kerala which exported plywood. The details of export of plywood from

Cochin port is given in table 3.13.

Table 3.13 Plywood Export from Cochin Port in Kerala

Year Export(Rs. crore) Export( m3

) Export (tonnes)

2001-02 6.85 6923.80 3934.27

2002-03 14.32 14459.34 8358.80

2003-04 19.21 19404.00 11025.46

2004-05 30.23 30536.00 24300.00

2005-06 68.45 69129.64 39314.54

Source: CCCI, 2002-06


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It is evident from table 3.13 that the export of plywood from Kerala

increased by 900 per cent between 2001-02 and 2005-06. The annual

average increase in export was 81.76 per cent, with 57 per cent in 2004-05

and 126 per cent in 2005-06 when compared to the previous years.

To conclude, the acceptance of rubber wood as a sustainable,

plantation-grown, ‘environment friendly’ timber has contributed to its

universal appeal. Strong research and aggressive marketing have

contributed towards making rubber wood as the most important Southeast

Asian export timber. The domestic utilization of rubber wood has grown up

due to the increase in the number of rubber wood processing units, though

it has yet to utilize its potential. Looking at the existing nature of value

chain of rubber wood and the possibility for developing it further so as to

realize its potential growth, an investigation of rubber wood in Kerala is

inevitable. The next chapter is an attempt towards that direction.

rubber wood industry in kerala-shodhganga.inflibnet.ac.in/bitstream/10603/22505/13/13...rubber wood...

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