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Vertical integration in the natural rubber industry: cultivation - harvest - processing - marketing

SIPH’s main activity is the production and marketing of natural rubber.

SIPH’s rubber plantations are all in West Africa.

Natural rubber remains indispensable for the tyre industry.

The natural rubber industry

The raw material latex comes from rubber trees which live for around 40 years and start producing latex once they have matured, which takes around 7 years.

Rubber trees are tapped to harvest the latex. This technical operation, which requires a certain know-how, takes place throughout the year and is not seasonal.

Production is spread over the year with around 40% in the first half and 60 % in the second half of the year due to winter lay up time which reduces production.

At the end of their useful life, the rubber trees are cut down and replanted. Research developments mean that this replanting can be carried out with much higher performing planting material.

SIPH is unique in combining raw material from its own plantations with that bought from independent planters. This combination means that SIPH’s output can be increased significantly. It also means that the company is actively involved in the development of the local economy and social life.

Transforming latex into rubber

The raw material is processed in the subsidiaries’ treatment centres.

Marketing

SIPH is responsible for marketing the rubber produced by its subsidiaries on the international market.

SIPH’s rubber is mainly delivered to Europe, but also to Asia, North America and South Africa.

Its main clients are the big companies in the tyre industry.

Price

Rubber is one of the raw materials listed on the futures market: the most representative market for the rubber produced by SIPH is SICOM 20 (Singapore Commodity Exchange), which is listed in US$.

The price of rubber follows a cyclical trend and SIPH’s results correlate directly with prices.

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