SRI makes tennis goods under the brand Dunlop © Dunlop Sports
SRI makes tennis goods under the brand Dunlop © Dunlop Sports

Firm behind Dunlop sets up rubber procurement subsidiary

12 February 2020

Sumitomo Rubber Industries (SRI) has set up a procurement subsidiary to ensure a more stable supply in response to changes in the natural rubber market.

SRI is setting up the subsidiary in Singapore, the world's largest natural rubber trading hub, to replace the Natural Rubber Division of its tyre subsidiary, which until now had handled procurement of rubber for the group.

The new company will begin operations in April and will take over all rubber procurement activities.

SRI makes products such as tyres, golf and tennis goods, artificial turf and rubber gloves under brands including Dunlop and Falken.

“The Sumitomo Rubber Group has determined that, in order to reliably procure high-quality natural rubber, there is a strong need for a procurement system spearheaded by a locally-situated organisation,” said SRI.

The company said that while global consumption of natural rubber has risen in recent years, production in Asia’s major natural rubber centres is expected to decline in the near future.

“As such, there is now a growing need for a global approach to natural rubber procurement,” SRI said.

It added that mergers and market withdrawals within the rubber industry were creating greater risks of monopolies, price fluctuations and other potential issues.

The risks of human rights abuses, deforestation and other potential problems in the natural rubber supply chain means it is likely to come under greater scrutiny with respect to UN Sustainable Development Goals, the company added.

It said that there was now a greater emphasis on considerations related to human rights and the environment when it came to rubber procurement.

The new division is set to handle SRI’s sustainability efforts, including the company's contributions to the Global Platform for Sustainable Natural Rubber (GPSNR).

SRI was a founding member in October 2018 when GPSNR was launched to act as a multi-stakeholder platform to address sustainability issues including human rights and deforestation.

Singapore became a major player in rubber trading when rubber plantations began to spread across the Malay Peninsula in the late 1800s.

However, it did not dethrone London as a centre for rubber trading until the 1980s.

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