The Department of Agriculture (DA) said it inked a memorandum of understanding (MOU) with a local farmers’ group and a listed firm for the construction of a $200-million rubber-tire factory in Mindanao.
Under the MOU, the DA, Philippine Rubber Farmers Association (PRFA) and Phoenix Petroleum Philippines Inc. have agreed to invest in putting up the Pilipinas Agila Tyre Manufacturing (PATM). Agriculture Secretary Emmanuel F. Piñol said PATM is the first homegrown tire-manufacturing company.
“Other Asian countries have already established their own tire-manufacturing company, why can’t we also do that? A tire factory in the Philippines will also mean a stable income for the country’s growing number of rubber farmers,” Piñol said in a statement released on Wednesday.
The signing of the MOU was held in Malacañang and was witnessed by President Duterte and Trade Secretary Ramon M. Lopez on Tuesday.
Piñol said the DA would assist in conducting the preparatory activities for the establishment of PATM in Mindanao, including its feasibility study. “PATM would be a game changer in the local rubber industry.”
The DA said the construction of PATM would be facilitated by Phoenix in partnership with Finnish tire-manufacturing company Black Donuts Engineering Inc. (Black Donuts).
Under the MOU, PATM would source its rubber requirement from members of the PRFA.
In January, Piñol invited the executives of Black Donuts to visit the Philippines for possible investments in the Davao and Cotabato areas, which accounted for a combined 42-percent share of the country’s total rubber output in 2016.
In an interview in January, Rodolfo L. Galang, interim executive director of the Philippine Rubber Research Institute—an attached agency of the DA—said the proposed 50-hectare rubber-manufacturing plant could produce at least 4 million tires a year. The tires are suitable for regular cars, pickup trucks and other small-type trucks, Galang said.
He said 40 percent of tire production is made of natural rubber, which averages around 10 kilograms per tire. The goal of producing 4 million tires per year would require at least 16 million kilograms of rubber, or 16,000 metric tons (MT) annually.
“We are producing enough yearly requirement, around 110,000 MT a year, but our consumption, according to our data, is only around 30,000 MT,” he said.
Mindanao accounts for 99 percent of the country’s rubber production, according to