The natural rubber supplier Société Internationale de Plantations d’Hévéas (SIPH) has reported that it has returned to growth because of higher sales volumes.

Sales from rubber have reached €58.1 million, which is with 15.9 percent higher than in the previous year‘s third quarter, according to the producer and manufacturer of natural rubber for tires and other industrial uses. Within the three months prior to 30 Sept, Société Internationale de Plantations d’Hévéas sold 43.8kt of rubber as against 38.5kt in the same period last year. The proportion of purchased rubber rose to 60 percent of total production, compared to 54 percent a year ago.

“Strong recovery” in natural rubber prices noted Société Internationale de Plantations d’Hévéas (SIPH)In the third quarter the external purchases increased significantly, totaling to 79kt compared to 59.5kt in 2014. According to SIPH, the increase reflects the strong recovery of external purchases, itself made possible by the investments undertaken by the group to expand the industrial capacities of its plants.

The gains were made despite lower pricing: the average price of rubber in the third quarter of 2015 was down 2 percent year-on-year at €1.21/kg, as the group reported. The average price in the third quarter in quarters was 17.5 percent lower at $1.34/kg, said SIPH, noting also that rubber prices currently stand at around €1.07/kg ($1.18/kg).

For the first nine months of the year, rubber sales at SIPH came in 6.6 percent lower at €154.7 million. Tonnages sold came to nearly 121.5kt, an increase of almost 6 percent, which partially offset an 11.8-percent drop in sales prices.

However, the rubber market is still experiencing a “pronounced and enduring” cyclical low, according to SIPH, which is continuing to implement cost control measures.

“Strong recovery” in natural rubber prices noted Société Internationale de Plantations d’Hévéas (SIPH) 2

The group added that it is aligning its investment strategy, with a priority on increasing its industrial capacity and positioning the business for potential market recovery. Plans include achieving a production target of 190kt this year – up 20 percent compared to 2014.

Operating around 40,000 hectares of rubber plantations, SIPH has production capacity in Ivory Coast, Ghana, Nigeria and Liberia.

“Production conditions are good on all the plantations and purchases from the growers continue to increase steadily. The works being undertaken to develop plant capacities are proceeding to plan,” commented Société Internationale de Plantations d’Hévéas.

Article source: European Rubber Journal