Higher output helps SIPH offset low NR prices

Paris – Société Internationale de Plantations d’Hévéas (SIPH) achieved first-half sales of €99.1 million at its natural rubber (NR) business, despite a decline in prices for the raw material.

Over the six months to 30 June, NR prices were well below the level of last year – a Q2/16 average of €1.22/kg was 11-percent below the level of last year, while the current price was down to around €1.16/kg.

SIPH reported a total rubber production of 79.3 kilotonnes (kt), up by nearly 10 percent. The increase, it said, was mainly through external purchases, which totalled 50.1kt, compared to 43.2kt in 2015.

SIPH’s own production remained stable over the period at 29kt, so that the share of rubber purchased rose to 67 percent, from 60 percent in first half 2015.

Over the first six months of 2016, NR tonnages sold reached nearly 91kt, fully offsetting a 12.3-percent decline in sale prices.

As well as external purchases, sales benefited from recent investments in plant production capacity – 91.5kt were processed at the start of 2016 compared to 80.3kt in the same period last year.

SIPH said it was on track with plans to increase production by 22 percent in 2016, while continuing to reduce costs.

The group has earmarked a budget of €19 million for ‘growth of surfaces’ and to enhance its industrial capacity in line with price developments.

In the Ivory Coast, SIPH is focused on increasing its capacity to process purchased rubber and on producing finished products based on in-demand grades.

SIPH produces and processes NR for industrial use, managing over 40,000 hectares of mature rubber trees. Its current production capacity is 250 kilotonnes spread over Côte d’Ivoire, Ghana, Nigeria and Liberia.

Treated latex comes both from SIPH’s own rubber plantations and from purchases made from independent growers, with end materials supplied mainly to the global tire industry.