Rubber firms look to rosier future

In the global market, the price of oil has been rising due to the ongoing Red Sea tensions, which have prolonged transportation time and driven up costs for oil tankers.

This has in turn led to increased synthetic rubber prices, as crude oil is an input material in its production.

Similar to synthetic rubber, natural rubber has also seen favourable price movements.

Supplies have been tightened as Thailand – the world’s largest natural rubber exporter – has experienced adverse weather conditions. In addition, the expectation of a global auto industry rebound has warmed up the rubber market.

As such, in 2024, Vietnam Rubber Group (VRG) is set to count $1.05 billion in revenue, $173 million in pre-tax profit, and $145 million in post-tax profit. These figures are all higher compared to 2023 levels.

Last year, VRG produced an estimated 445,000 tonnes of rubber, up 3.5 per cent on-year. Sale surpassed 520,290 tonnes, up 3.8 per cent.

Its consolidated revenue hit $1.03 billion, equal to 101 per cent of its full-year projection, and consolidated pre-tax profit reached $169.4 million, surging by 1.4 per cent on-year.

This year, Danang Rubber JSC anticipates robust growth after its third-phase radial tyre plant came on stream in December 2023, providing solid prospects for its PCR tyres, which are used for trucks and passenger cars.

The global demand for tyre products saw improvement from the third quarter of last year, particularly in Vietnam’s key export markets such as Brazil and the United States.

New car supply in the US is expected to return to pre-pandemic levels of around three million cars, nearly triple the figure seen in the period that faced the toughest impacts due to chip shortages.

Vietcombank Securities forecasts that this year, Danang Rubber could count $241 million in revenue and $13.6 million in post-tax profit, up 25 per cent and 43.8 per cent on-year, respectively.

Natural rubber is currently the main driver of Dong Phu Rubber's business outcomes.

Last year, the company saw a drop in its business results due to falling consumption and lower than expected product prices.

Consequently, the company posted $32.4 million in revenue and $8.9 million in accrued profit, down 13 per cent and 15 per cent on-year, respectively.

This year, Dong Phu expects to see a better performance thanks to the positive rubber price movements.

According to Vietnam Construction Securities JSC, Dong Phu Rubber possesses more than 16,000 hectares of rubber fields in total, of which over 9,000ha are based in Binh Phuoc province.

Binh Phuoc has a plan to take back 2,000ha from Dong Phu with compensation approximating $40,000 per ha.

This year, the company is expected to receive about $5 million in compensation from Binh Phuoc People’s Committee.

Rubber producers continue to brood over tough prices and tax complexities Vietnam’s rubber industry is facing difficulties from the global market and internal problems in tax policy, with farmers, associations, and businesses alike waiting for much-needed funds.

Vietnam listed as future key destination for RoK firms Vietnam is emerging as a key destination in the future business strategy of enterprises from the Republic of Korea (RoK), a survey has shown.

Sugar firms get a taste of sweeter future In the first quarter (Q1) of this ongoing fiscal year which began in July, Lam Son Sugar JSC (Lasuco) saw their best performing quarter out of the previous five with just under $20 million in revenue, up 55 per cent on-year, and almost $720,000 in post-tax profit, up 113 per cent.