The Malayan Rubber Industry—II E U G E N E M . MCCOLM, Technical Director, Plantation Division, United States Rubber Co.
Appearance rather t h a n i m p o r t a n t p h y s i c a l properties h a s served a s basis for grading na tural rubber . . . E v e n t h e original s o u r c e o f rubber o n t h e m a r k e t is traced w i t h difficulty . . . C o m p e t i t i o n f r o m s y n t h e t i c s m a y force s e t t i n g of m o r e realistic .standards
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LUBBER which outers the Malayan market comes a t present from three main sources: estates; smallholders, generally Malays, Chinese, Indians, or other Asians owning anything from a few trees up to a hundred acres; and imports from Borneo, Sarawak, and Indonesia. The estates vary from 100 to 10,000 acres in area, are under European or Asian management, and are subject to a n effort to produce the maximum percentage of top grade rubber. A similar effort is usually not made by the smallholder, while the imports, excepting t h e rubber from estates in Borneo and Sarawak, consist mainly in wet lump or u n dried sheet and are remilled into off-crepes of various qualities in Singapore. When this rubber finally leaves Malaya for the consuming countries, it h a s been classified into a number of grades, t h e specifications for which were laid down several years ago by t h e Rubber M a n u facturers' Association. I n almost all respects these specifications deal with superficial appearances only, no specifications for t h e physical properties in which the compounder is interested having been included, excepting cleanliness. With the exception of t h e product of certain estates, t h e sheet rubber exported is packed in t h e packing godowns of dealers mainly in Penang, Port Swettenham, or Singapore. These dealers bring into their godowns so-called loose or unpacked smoked sheet from estates for whom they a c t as agents, from other estates from whom they have purchased it, from smaller dealers " u p country" who in t u r n have purchased it from even smaller dealers, or direct from smallholders. T h e dealer may have purchased it loose b u t graded, or ungraded. H e grades a n d packs it for export and then usually offers it for sale f.o.b. through one of several brokers who in turn are in touch with t h e various local buyers representing consumers or dealers somewhere in the world. T h e price of t h e commodity is determined b} r t h e supply and demand situation acting through t h e broker. T h e rubber sold in this fashion, known a s f.o.b., is n o t sold on sample b u t on t h e seller's guarantee, subject to arbitration in London or New York in case of disagreement, t h a t t h e lot offered conforms t o t h e R M A specification for t h e given grade. T h e various grades of off-crepes or
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blankets are produced by the Singapore remilling industry which with one exception is entirely Chinese in ownership. This rubber may b e sold loose to the godowns of t h e three buyers maintaining packing godowns in Singapore (Goodyear Firestone, and D u n l o p ) or graded a n d packed b y the remillers and sold f.o.b. through t h e brokers to other buyers. Every \Vednesda3'' t h e Rubber Association of t h e Singapore Chamber of Commerce holds an auction of rubber which is sold on sample. This usually consists of odd lots of ungraded rubber offered by t h e estate agents. T h e importance of this auction in the rubber market is now small, although a t one time most of t h e rubber coming t o t h e market passed through it. Malaj r an rubber is also offered in other markets, such as London and N e w York, by dealers and remillers acting throughtheir agents in these cities. I n addition to these more or less simple marketing methods, there is in existence a tender market for forward sales and purchases, i n wThich the Singapore Chamber of Commerce acts as a sort of clearinghouse and bank. Instead of daily settlement as is the case in the New York rubber exchange, settlement, is fortnightly on alternate Wednesdays, through the Chamber of Commerce. This tender market actually functions as a medium for speculation, a n d a given tender m a y pass through 15 or 20 hands before reaching a buyer who wishes to take physical delivery of the rubber. Moreover when such a buyer buys a parcel of, saj r , 100 tons spot from a dealer via a broker, t h e parcel m a y consist of x tons actually graded a n d packed by t h a t dealer and y t o n s made u p of a half dozen different tenders, originating in a half dozen different sources and having passed Port Swett.Ptih.ntn
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through numerous h a n d s previously. T h u s , unless the buj-er were to resort to extensive detective work, ne cannot know t h e physical source—estate or group of smallholders—by w h o m t h e rubber he purchases actually was produced, nor can the dealer inform him i n case a n y of i t is made u p of such forward tenders which t h e dealer has previously purchased. Some of these tenders m a y actually m a k e a complete circle a n d finally be purchased b y the original seller, in which case they are automatically canceled. Obviously this tender m a r k e t can have a considerable stabilizing effect on the m a r k e t price or conversely, in times of economic upheaval, c a n hasten a rise or a decline. Fortunately for t h e M a l a y a n market, different manufacturers h a v e different ideas of t h e best ways t o m e e t their overall requirements. One will buy nothing b u t N o . I X or N o . 1 smoked sheet, the two top grades, a n d will average down his price a n d quality by buying a n appreciable a m o u n t of t h e lower-grade blanket crepes or ambers. Another wrill b u y no t o p quality sheet a n d very little blanket b u t will t r y t o fill all his requirem e n t s with N o . 3 or N o . 4 sheet, wrhen available. Actually, where cleanliness is not a primary consideration or wrhere t h e rubber is to b e strained in a n y case, there is so little difference between t h e intrinsic physical properties of products made from N o . I X sheet, a n d those from, say, N o . 3 sheet t h a t t h e manufacturer has a considerable range of grades to choose from, all of which will produce products of adequate quality. I t is indeed true, therefore, t h a t t h e present system of grading, based mainly on appearance, is a purely artificial system > supported by buyer a n d seller alike for want of an equally practicable, easy, inexpensive, a n d workable system based on intrinsic properties of importance i n determining performance. There is one m e t h o d by which a given manufacturer could assure himself of Installation
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always obtaining a given rubber from a given source, probably having more cons t a n t intrinsic properties, t h a t is b y finding one or more estates willing t o sell him their entire production regularly, possibly m a k ing a n y desired alterations in manufacturing methods, for his account, of course. This has been done in t h e past in several instances. I t is t h e writer's opinion, however, t h a t until r u b b e r s of sufficiently superior a n d constant properties are available from certain estates t o make t h e m worth a definite p r e m i u m to the m a n u facturer, d u e to reduced manufacturing costs or improved performance possible by their use, this m e t h o d is of value only in a few special cases a n d for special p u r poses. Lack of Tests
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T h e r e is considerable literature available covering investigations into the cause of t h e variability of n a t u r a l rubber. T h e approach h a s largely been based on t h e implied assumption t h a t the properties of t h e p u r e hydrocarbon itself are constant, regardless of source, and t h a t variability is due to the a m o u n t and character of. t h e nonrubber constituents present. Whether this assumption is correct is n o t known, b u t it is certainly definitely established t h a t there are nonrubber antioxidants present, t h a t there are variable a m o u n t s of fatty acids present, frequently insufficient to produce a good cure with zinc oxide, and t h a t there are other substances also present which play a role in vulcanization. All these vary in a m o u n t a n d character, to some extent a t least, depending on the extent of dilution df the latex prior to coagulation, the a m o u n t and kind of coagulant used, and t h e t r e a t m e n t subsequent to coagulation. I t will be evident therefore t h a t the m a r k e t i n g m e t h o d s described above, which are generally in vogue, tend t o produce t h e result t h a t a given parcel of say 50 or 100 t o n s finally b o u g h t and exported by a given buyer, and used in his factories, m a y consist of rubber which, while it all looks alike, m a y v a r y appreciably in plasticity, r a t e of vulcanization, and possibly V O L U M E
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also in other more* important properties from bale to bale a-nd even from sheet to sheet within a giv^n bate. I n fact, t h e present m a r k e t i n g system h a s been blamed for this v e r y fault in t h e past, b u t it is difficult to see raow it could be avoided and y e t retain t h e fluidity t h a t a commodity market m u s t h a v e , so long as t h e • market criterion of quality is a p p e a r a n c e only. Probably t h e responsibility for t h e fact that n o appreciable efforts were ever made prewar t o produce a, more s t a n d a r d product lies with the American rubber manufacturer, for hie was never willing to offer a p r e m i u m aibove first g r a d e prices for a s t a n d a r d product—the only power strong enough t o have enforced t h e necessary collaboration withim the whole p r o ducing i n d u s t r y wlaich would, h a v e been required to effect irapro»vements. T h a t situation no longer exisrts t o d a y to as great a n extent, for the "war h a s brought competition i n thie foran of synthetic rubber ^ad various other rubberlike synthetics. The responsibility for improvement in quality and elimination of vari-
( R E G . U.
S. P A T E N T O F F - I C E )
• • • You never krt^ow hvu) absurd your own opinion is -until you hear somebody else quotingr it.
Success defies the law of gravity; it means getting to the top of the ladder by staying on, the level.
A great many yersor&s know how to spring at the start of anything, but it's the fellow wfxo holds a steady pace in life who gets tFie farthest,
^DECEMBER
— O - A. B A T T I S T A (ALU R I O H T 3
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1947
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ability now rests squarely on the M a l a y a n industry, which to date has shown little awareness of this fact nor a n y t e n d e n c y to do m u c h about it. It in effect is t a k i n g t h e position, consciously or unconsciously, t h a t despite the several million dollars being spent annually in the T,J- S. A. a n d C a n a d a on synthetics research, t h e synthetics industry is incapable of developing products which could ever displace n a t u r a l rubber in an open competitive m a r k e t . This attitude is not shared b y all producers, but to d a t e t h e i n d u s t r y as a whole is relatively complacent. A final word should probably b e said a b o u t t h e sale of latex. N a t u r a l latex has so far been produced only b y a relatively few European a n d American producers, who either consume it in t h e i r own factories or else m a r k e t it t h r o u g h their own selling organizations or those of their agents directly in the consuming countries. There is, therefore, no local M a layan market in this commodity. Since concentrated latexes a r e subject t o considerable bulking of t h e daily crop a n d are produced on a few fixed sites from certain specific stands of rubber, under a t least some technical control, t h e y a r e very m u c h less variable b o t h in their colloidal properties and in the properties of their contained rubber t h a n are t h e various dry grades. T h e production of a completely s t a n d a r d , high quality concentrate, year in a n d year out, is a job requiring m u c h more scientific control t h a n does t h e production of the present dry grades. F o r this reason, t h e expansion which is prese n t l y occurring in t h i s field m a y bring into the market products of lower a n d varying quality if t h i s scientific control has been inadequate. I t would therefore a p p e a r t h a t t h e time is now ripe for the consuming countries t o agree on a set of specifications which will define t h e permissible limits in all t h e i m p o r t a n t properties of t h e latex (and possibly also, t h e physical properties of its contained r u b b e r ) which a latex m u s t h a v e to be considered first quality. PART I of "The Malayan Rubber Industry" appeared in the Dec. 22 issue of C&EN. 3853
