By Too Edwin Freeman
July 28, 2011
Liberia has been in the natural rubber (NR) business (or more appropriately, the rubber business has been in Liberia) since the government of President Hilary R. W. Johnson signed a concession agreement with a British firm in 1890, for the extraction of latex from wild rubber trees that grew on tribal communal land. Two decades after that initial agreement, the government of President Arthur Barclay entered into a second concession agreement with yet another British-owned company, named the Liberia Rubber Corporation, for the systematic and commercial cultivation of rubber on a plantation at Mount Barclay in 1910. Both ventures were unsuccessful in positioning Liberia as a major player in the world natural rubber market.
Then in 1926, the Liberian government during the presidency of Charles D. B. Kingsigned “The greatestconcession of its kind ever,” as Mr. Harvey S. Firestone is said to have described his rubber concession agreement with the Liberian government (www.liberiapastandpresent.org). For his troubles (a $5 million loan to the King government), Firestoneobtained a 99-year lease for 1 million acres of farmland (4% of the country’s territory). Firestone set up plantations on the banks of theFarmington and Cavalla riversrespectively andhis company has been producing rubber in the country since then, securing a pivotal role for Liberia’s rubber in the world market some two decades later during World War II.
Incredibly enough, more than a century since the signing of its first concession agreement, Liberia is still only an exporter ofraw rubber a relatively low value commodity.The prospectfor secondary and tertiary rubber processing activities in Liberia has been a subject of fierce debates over the years, often times with myopic sentiments for tire manufacturing as though that’sthe panacea for the industry’s shortcomings.The fact is that although about 70% of the world’s natural rubber (cis-1,3-polyisoprene) production goes into the manufacture of tires, the materialit is not the major constituent of most tires.
In the tire manufacturing industry, the NR content of a tireactually depends on the type of vehicle for which it’s used.In the specific case of passenger cars - the major end-use segment for original equipment manufacturer (OEM) and replacement tires -their tires contain only about 14% NR. The major elastomeric constituent of a passenger car tire(~27%) is a synthetic rubberknown as styrene-butadiene rubber (SBR). As for bicycle tires, they are made exclusively from synthetic rubber. As a matter of fact, synthetic rubber commands a greater share of tire manufacturing and the world rubber market in general, than NR. The proportionality of NR is highest only intiresforlarge truck, giant off-the-road vehicles and aircrafts.
The bottom line is that while tire manufacturing is a “nice to have”activity in Liberia, it is very capital intensive and requires a diverse raw material resource base which is nonexistent in the country. That coupled with the absence of a market (demand) for OEM or replacement tires in Liberia, really diminishes the prospects for economic profitability from tire manufacturing in the country by any investor.
Beyond tire manufacturing however,the Haveabrasiliensesplant(rubber tree)presents far greater opportunities for making the “Made in Liberia” label a reality.Natural rubber does provideopportunities forproduction of a host of other products including industrial goods (hoses, conveyor belts, rubberized fabrics, gaskets, seals); engineering products (for resilient load bearing and shock or vibration absorption) and latex products (gloves, catheters, prophylactics, adhesives), just to name a few. Rubber products aside for now, this second look at Liberia’s NR industry begins by focusingon the rubber tree itself, with emphasis onits potential as a source ofvalue augmented products for the domestic and export markets.
Attributes of Rubber Wood
While it is true that latex remains the obvious commercial commodity for which the Havea plant is cultivated, there is immense economic value to the tree which isessentially a byproduct of the industry long after its latex-producing life is over. A major impediment to the viability of rubber wood as a commodity in the past has been itsintrinsic lack of durability.Over the last two decades or so however, technological advancement inpreservation and processinghas overcome this deficiency. As a result,rubberwood is now competitive with conventional forest timber for the manufacture of a wide range of wood products.
The trunk of a rubber tree is typically very straight, and depending on its clone, the tree can be as tall as 75 feet or more, with a diameter of up to 3 feet. Rubberwood is light to moderately heavy and stiff; with density similar to maple wood. It shrinks only moderately and its color varies from nearly white to yellow or cream. Its grain structure is very attractive and more importantly, its properties are fairly uniformed throughout the trunk. The existence of a variety of clones means that there is some variability in the characteristics or the wood. But generally speaking, the strength and mechanical properties of a rubber wood are comparable to those of several tropical forest timber species.
When properly treated,rubberwood can be used as a substitute for conventional tropical timber in many applications. For instance, its light color and low shrinkage makes it one of the most suitable materials for the manufacturing of furniture. More significantly, because it iscoarsely textured, thewoodworking and machining qualities of rubber wood (sawing, turning, boring, gluing and nailing), are superior by and large, to many tropical forest species timbers. Rubber wood also is more resistant to splitting caused by nailing, thus making it an ideal construction material.The light color of rubberwood makes it very amenable to a variety of finishes and stains, for decorative purposes. It can also be stained to shades of traditional forest timbers include teak, rosewood, mahogany, cherry, etc.
There are other important attributes of rubberwood timber that make it even more attractive in some aspects, than forest timber. Case in point, while maturation of timber such as teak may take up 60 years, it takes only 25 to 30 years for a rubber tree to mature.From an economic standpoint, theproduction cost per cubic meter of rubberwood is only about 30 percent of the production cost of certain forest species (Kollert and Zana 1994).
Theversatility of rubber wood manifested by thecombination of its manyattributes leaves little wonder that it has become a very ideal alternative to forest timber for a wide range of end-use applications. Rubberwood is also generally accepted as sustainable and environmentally friendly because it is plantation-grown, and is only a by-product of the replanting process.
Rubberwood timber is widelyused for the manufacture of high-end furniture(bedroom, living room, dining room) and furniture parts (legs, arms, frames, etc.). Additionally, the material finds use ina plethora ofother applications, a partial list of which is presented below:
Parquet flooring Staircases (steps, railing, treads) Windows and doors
Interior finishing Ornamental and novelty items Tool handles
Wood panels Pulp and paper Knife blocks
Moldings Shoe heels Medium density fiberboards
Veneer/plywood Picture frames Particle boards
Fuel (charcoal, briquettes) Toys Cabinets and drawers
Wooden crates Fruit and salad bowls
Wooden pallets Chopping blocks
While the above list is by no means exhaustive, it undoubtedlymanifests the vast potential for commercial exploitation of rubberwood as an ancillary to the rubber industry in Liberia.
Malaysia and Thailand are the pioneers in this industry, with large-scale industrial production of sawn rubberwood beginning in the 1980s.Since then, other major rubber producing countries in Asia, including India, Philippines, China, have all recognized the tremendous economic value of the rubber tree and have consequently boosted diversification to broaden the base of their respective rubber industries.
The example of Malaysia, the world’s largest exporter of rubberwood products, is particularly instructive. Though not the world’s largest producer of NR (Thailand is, followed by Indonesia)in less than two decades, Malaysia has elevated its rubberwood from a valueless byproduct of the rubber industry to that of a major export earner.Today, rubberwood is one of the major resources for furniture manufacture and for the production of several other wood products such as particle boards, medium density fiberboards, plywood and other products in Malaysia (www.metla.fi/iufro/iufro95/abstracts.html).
The Malaysian Government built its top-notch rubberwood industry by developing a well-crafted and sustained support framework that includes strict logging and harvesting policies, as well as incentivized programs for value-added exports. For instance, in 1994 the country imposed a total ban on the export of sawn rubberwood timber in order to increase the value-added production of rubberwood products (UNECE/FAO Forest Products Annual Market Review, 2003-2004). As a result of such measures, Malaysia isnot only the world’s largest producer of rubberwood products, it also has the most diversified rubberwood products industry in the world.
Potential Benefits for Liberia
Liberia is estimated to have about 600,000 hectares of overgrown rubber farms most of them between 30 and 60 years old(http://www.otal.com/commodities/rubber.htm). Even with the conservative assessment figure of 100 cubic meters of rubberwood per hectare (Non-forest tree plantations, FAO 2001), the volume of wood from the existing stock appropriately positions the countryto become a reliable competitor in the fast-expanding rubberwood products market. Through a coherent investment strategy that targets the export of value-added products, the potential for the emergence of the rubberwood sub-sector as a major foreign exchange earner for the country can be realized.
Major importers of rubberwood products include the US, EU countries, Australia and Japan. Asian countries currently dominate exports in the industry: with Malaysia’s success having been emulated by Thailand, Philippines and others. However, as a result of theever-changing market dynamics, increasing labor cost and other factors in those countries, leading importers are increasingly looking for other sources that can offer competitive products and ensure adequate supplies.
Experts predict that the rising consciousness among consumers about the environment willresult in increasing demand for rubber wood, eventually outstripping the supply of the material on the international market in the foreseeable future. Given Liberia’s current socio-economic realities, breaking into the rubberwood products market presents an opportunity that goes beyond the mere pride of displaying the “made in Liberia” label, but also has the potential to be a significant part of the mechanism for the reduction of poverty in the country.
Developing a rubberwoodprocessing subsector in Liberia will not only generate employment, it will definitely help to make the country’s post-war economy more competitive in a world where trade barriers are fast disappearing. The versatility in both the assortment of rubber wood based products and their end-use applications can be leveraged as a long-term sustainable strategy for downstream manufacturing of value-added products for both the domestic and export markets.
The ultimate goal of the value augmentation construct is the empowerment of people to improve their socio-economic wellbeing. If one accepts this basic precept, then the current situation in Liberia which allows for the export of sawn raw rubberwood lumber and wood chips (as alternative source of fuel for Europe and North America)hardlymeets the benchmark.It is incomprehensible how thecurrent modelcan serve as a sustainable strategy for fighting unemployment and poverty in Liberia, especiallysince it does very little to expand the industrial sector in the country.
In contrast, establishing a robust rubberwood products industrywillengenderdemand for complementary products, thereby fosteringinvestments in more downstream manufacturing activities, and thusexpanding the country’s industrial base in the long run. For example, an established rubberwood furniture subsector will undoubtedly create the demand for the manufacture of productssuch as foams for cushions, pillows, mattressesas well as adhesivesto complement the furniture industry.
Foam products can be made using locally available natural rubber latex as raw material. Though the market is currently dominated by flexible polyurethane foams (FPF),natural rubber latex (NRL) foam is a niche which commands premium pricing precisely due to its very unique properties. The combination of resiliency, flexibility and very minimum compaction, inherent in NRL foam renders it superior in comfort and support, thus making it ideal for mattress application. NRL foam is also inherently antimicrobial and resistant to other parasites like dust mites. In fact, experts consider NRL foam to be the ultimate high performer among cushioning materials(http://www.pfa.org).
It is also worth emphasizing that consumers are increasingly demanding and willing to pay premium for products whose route to market have not left a footprint of environmental and ecological diminishment (www.sierraclub.ca/bc).Rubberwood products meet this criterion and are thus characterized as eco-friendly because they come from an agricultural byproduct (used only after its latex-producing life is over).
Sustainable harvesting is critical to ensuring continuity in the industry. As such government must, through its responsible agency, take appropriate steps to avoid the fiasco of the forestry sector. A robust replanting policy that mandates the replenishment of every tree felled with the replanting of multiple trees, will not only guarantee a sustainable wood product supply chain, but also demonstrate the industry’s commitment to ecological integrity and environmental stewardship.
The Way Forward
Policymakers must cease the moment and develop policy framework and strategies for promoting and regulating investment in this area, as an emerging sector of the post-war Liberian economy. Saidstrategymust include:
• Inducement forthose companies that are harvesting rubberwood in Liberia to reserve portions of their harvest for the manufacture of value-added products for the local and export markets.
• Organizing of cooperatives for smallholders, with centralized preservation and treatment facilities, and providing capacity building in the form of training, market intelligence and technology transfer.
• Creation of incentives for manufacture of value added exports through public/private partnerships.
• Increasing local demand and domestic consumption of rubberwood products.
• Improving the quality and acceptability of Liberia rubberwood products on the world market through extensive research and aggressive marketing.
To accomplish the goal of improving the quality and acceptability of products from the industry will require the setting upworld-class rubberwood research and development facilities in the country. The University of Liberia’s College of Agriculture, with its Wood Science and Technology programand the newly announced WVS Tubman University’sRubber Science and Technology Institute areboth perfectly suitedand must be appropriately capacitated to fulfill theroles.
Creating a consortium with equity participation of industry partners and the government, to provide the necessary funding and support to these institutionswhose labs will then serve as incubators for innovations to help expand the scope and scale of the industry must be a part of the framework for enhancing the rubberwood subsector.With a robust industry in place, government must then demonstrate its commitment to the ideals of the “made in Liberia” label by mandating that all wood-based productsand construction materialsfor use by and for the Government of Liberia be procured from rubberwood sources, as a means of increasing local consumption.
After more than a century of rubber business in Liberia,theshift to a new paradigm in the industry requires thought leadership that is disruptively innovative. Timeworn models that emphasize low value exportscannot be relied upon to transform the otherwise lackluster rubberindustry in Liberia.Manufacturing of rubber wood products is not onlya sustainable approach to making the industrymore lucrative high value export oriented, itcanalso be the “initiator” ofa “chain reaction” that will lead to further growth and expansion in the country’s industrial basethereby tackling unemploymentand poverty as a whole.