At the Southern Rubber Industry Joint Stock Company (Photo: courtesy of the company) Comparedto the beginning of April, the price of this item has increased by 9 percent.Trading Economics also forecast that the increase in rubber prices will notstop until the end of the first quarter of 2023 and may reach 310.84 yen perkilo.
Theprice of crude oil on the world market has increased in recent times, pullingup the price of synthetic rubber – a petroleum product.
Therubber supply was also affected after the Organisation of Petroleum ExportingCountries (OPEC) said that the world would not be able to replace aboutseven million barrels of oil and other liquids lost per day from Russia.
OnApril 18, 2022, benchmark US crude oil for June delivery was 113.2 USD perbarrel and New York's main contract, light sweet crude for delivery in May, was107.93 USD per barrel.
Theprice of natural rubber is also supported by world demand in 2022, which isexpected to increase by 1.2 percent compared to 2021, to 14.2 million tonnes.
Accordingto the General Department of Customs, in the first three months of 2022,rubber exports reached 406,800 tonnes, worth 715.39 million USD, up 0.3 percentin volume and 6.2 percent in value over the same period of 2021.
Theprice trend is likely to increase in the next few months due to the seasonalshortage of supply, according to the forecast of the Vietnam RubberAssociation,
Besidesfavourable factors from the market, the natural rubber industry is also undercertain pressures. The shortage of containers, high transportation costs andslow customs clearance will affect rubber demand.
Aftera year of failing to complete the annual plan, the Southern Rubber IndustryJoint Stock Company (CSM) has set a business plan for 2022 with strong growth.CSM expects revenue to reach 4.95 trillion VND, a slight increase of 2 percentover the same period last year, but profit before tax is expected to reach 101billion VND, up 83 percent compared to 2021.
Torealise the target, CSM managers said that the company will maintainproduction to meet market demand, including both domestic and exports, at thesame time, increase labour productivity for existing product groups,especially investing in small equipment to complete a number of stages in theproduction line of motorcycle tyres, motorcycle tubes, bias tyres, and autotubes.
PhuocHoa Rubber Joint Stock Company (PHR) also sets a positive growth target thisyear with a revenue target of more than 2.25 trillion VND and profit after taxof 744 billion VND, up 16 percent and 56 percent respectively, compared to2021.
Meanwhile,Dak Lak Rubber Investment JSC (DRI) targets total revenue of 599.6 billionVND in 2022, a slight increase compared to 2021, but profit after tax isexpected to decrease by 5.7 percent to 79.2 billion VND.
DRIChairman of the Board of Directors Nguyen Viet Tuong said DRI is managingan area of over 8,800 hectares of rubber plantations in Laos with loansmainly in Lao kip. By the end of 2021, DRI's total debt was more than 256billion VND, so the company would be at risk in exchange rates. In case the kipdepreciates, DRI's revenue will also be affected. In addition, logistics costswill become high due to the sharp increase in raw material prices, which isalso a disadvantage for DRI.
DaNang Rubber Joint Stock Company (DRC) also forecasts revenue in 2022 todecrease slightly to 4.4 trillion VND and profit after tax to decrease by 12 percent to256 billion VND compared to the previous year.
DRCsaid it still faced a labour shortage at some production stages because of theCOVID-19 pandemic; empty containers and high rental prices; and hightransportation costs which cause the purchase price of raw materials toincrease sharply. In particular, the conflict between Russia and Ukraine causedoil prices to rise, pushing up prices of raw materials and goods, and DRC'simport and export activities into these two markets were also disrupted.
Thisyear, DRC will focus on products that are the company's strengths in thedomestic market to improve production and business efficiency such asoff–the-road (OTR) tyres and construction tyres. DRC's goal is to coverall segments in the domestic market as well as increase sales opportunities inexport markets.
Positivefirst quarter
Plentyof rubber companies have recorded positive Q1 earning results compared to theprevious year.
Inthe first quarter, thanks to a sharp increase in the selling price of finishedproducts compared to 2021, Dak Lak Rubber Investment JSC (DRI) recorded netrevenue of 134 billion VND, up 8 percent, in which, revenue from finishedrubber products reached 130.6 billion VND, the rest was from bananas andcashews.
Thecompany's profit after tax was 20.8 billion VND, up 27 percent year-on-year.With the results achieved, DRI has completed 22.3 percent of the year’s revenuetarget and 26 percent of the profit target.
PhuocHoa Rubber Joint Stock Company (PHR) said that in the first quarter of thisyear, the parent company recorded net revenue of 302.6 billion VND, up 25 percentcompared to the same period in 2021, but profit after tax reached 240 billionVND, 11.3 times higher than the same period last year and completed 33 percentof the yearly plan.
DaNang Rubber Joint Stock Company (DRC) earned net revenue of 1.28 trillion VND inQ1, profit before tax of 81.7 billion VND, up 40.6 percent and more than 3 percent,respectively. Entering the second quarter, the company set a business plansimilar to the first quarter, with net revenue of 1.25 trillion VND, profitbefore tax reaching 80 billion VND./.
VNA
