This document analyzes opportunities and issues related to manufacturing rubber products in Tripura, India. It finds that while Tripura is the 2nd largest producer of natural rubber in India, manufacturing of rubber products is very low. Opportunities exist in local, Bangladesh, and Northeast Indian markets. However, threats include small overall market size and competition from larger manufacturers outside the state. Key issues are high production costs due to lack of local raw materials, technicians, and technical knowledge. Suggested products include latex and dry rubber items that could target price-sensitive consumers seeking value. Addressing high input and maintenance costs through local sourcing and skills is important to compete sustainably.

1. IDENTIFYING OPPORTUNITIES AND UNDERSTANDING ISSUES
RELATED TO
MANUFACTURING OF RUBBER PRODUCTS AT AGARTALA
&
OTHER PARTS OF TRIPURA
2004
Prepared By:
ARUN KESHAV
Entrepreneurship Development Institute of India
Project office
SIDBI Building, HT Road,
B.K. Chowmuhani,
Agartala-799001
E-mail: arun_keshav@yahoo.com

2. 2
INDEX
SL. TOPICS PAGE NUMBER
1 INTRODUCTION 3
2 PRESENT STATUS 4
3 OPPORTUNITY IDENTIFICATION 5
4 ISSUE ANALYSIS 9
5 CONCLUSION 12

3. 3
1. INTRODUCTION
Tripura is the second largest producer of natural rubber in the country with an annual production
of 14,905 Mt. Having an estimated value of Rs. 74.53 Crores. However when it comes to the
manufacturing of rubber products its share is dismally low.
The natural rubber goes out of the state mainly in the form of smoked rubber sheets. This
minimises the potential benefit extended to the people and the state that could have been drawn
from the further value addition.
In order to boost the all-important manufacturing of rubber products in the state an Integrated
Entrepreneurship Development Programme (IEDP) is to be conducted.
This IEDP has been sponsored by Small Industries Development Bank of India (SIDBI) and is
being conducted by Entrepreneurship development Institute of India (EDI).
The program is to be implemented in 4 phases spread over 14 month with 25 participants,
inputs would be.
Phase I (10 days): - Classroom teaching providing inputs to develop entrepreneurial skills.
Phase II (10-20 days): - Technical training involving competent Rubber Technologist and OJT.
Phase III (10days): - Reinforcing the inputs provided and finalizing loan applications.
Phase IV (Six months): - Need based follow up support for enterprise establishment.
In order to facilitate this IEDP an independent study was conducted for better understanding of
the business environment.
The report presents the findings of the study and few suggestions for improvement.
The inferences were drawn on the basis of inputs received by interviewing over hundred
persons including entrepreneurs, representatives from enterprise facilitating agencies and
financial institutions and other related individuals.

4. 4
2. PRESENT STATUS
Rubber production in the state in the year 2003-2004.
SL. District Tapping Area(ha) Production(Mt) Total value in Rs.
Crores
1. West Tripura 5800 6380 31.90
2. South Tripura 6500 7100 35.50
3. North Tripura and
Dhalai
2658 1425 7.13
Total 14,958 14,958 74.53
(Source Rubber Board)
Manufacturing of rubber products
There are about 40-rubber product manufacturing units registered with DIC of which
80% of the units are tyre retreading units, however the retread rubber comes from
outside. The other units include one rubber band manufacturing unit, one rubber foam
manufacturing unit and rubber compounding units.
More than 90% of units are either closed down or sick the units, which has been able to
sustain profitably to certain extent are tyre-retreading units.
Apart from these there is one latex centrifuge plant, rubber wood processing plant
owned by Tripura Forest Development Plantation Corporation Ltd. (TFDPC)
Also TFDPC has recently set up Training cum Production center for rubber product
manufacturing. This is an important infrastructure development.

5. 5
3. OPPORTUNITY IDENTIFICATION
OPPORTUNITIES
 LOCAL MARKET
 BANGLADESH MARKET
 NORTH-EAST MARKET
 NICHE SEGMENTS OF THE MARKETS
 TAX EXEMPTIONS AND SUBSIDIES
PROVIDED BY THE STATE AND THE
CENTRAL GOVERNMENT
THREATS
 SMALL OVER ALL MARKET SIZE
 NEGLIGIBLE SIZE OF INDUSTRIAL MARKET
 LOW SDP
 COMPETION FROM MANUFACTURERS OUTSIDE
THE STATE ENJOYING ECONOMIES OF SCALE IN
PRODUCTION HELPING THEM ACHIEVE LOW
PRODUCTION COST AND GOOD QUALITY
 THE TECHNOLOGY EMPLOYED FOR
PRODUCTION IS MAINLY CAPITAL INTENSIVE
AND THE COMPETITORS WOULD HAVE
INVESTED HEAVILY, HENCE CREATING AN
ENTRY BARRIER.
STRENGTHS
 ANNUAL PRODUCTION OF NATURAL
RUBBER IN THE YEAR 2003-2004 14,905 Mt
SECOND HIGHEST PRODUCTION AMONGST
THE STATES IN THE COUNTRY.
 AVAILABILITY OF LABOUR
 ESTABLISHED DISTRIBUTION CHANNEL
WEAKNESSES
 NO RUBBER TECHNOLOGIST IN THE STATE
 RUBBER CHEMICALS NOT AVAILABLE LOCALLY
 NO KNOWLEDGE BASE AVAILABLE FOR
INDUSTRY SUPPORT
 TECHNICALLY SKILLED PERSONNELS NOT
AVAILABLE IN THE STATE
 NO LOCAL SUPPLIER OF REQUIRED
MACHINERIES
 MAINTANENCE OF MACHINERY A COSTLY
AFFAIR
 RAIL HEAD NOT AVAILABLE
 NEEDED RAW MATERIAL AVAILABILITY MAY BE A
PROBLEM
 LOGISTIC PROBLEM
 TECHNICAL BACKWARDNESS
 LOW PRODUCTIVITY OF LABOUR
 WEAKENING OF DISTRIBUTION NETWORK DUE
TO INSURGENT ACTIVITY IN THE STATE
HAMPERING ITS REACH IN INTERIOR AREAS.

6. 6
OPPORTUNITIES: -
The manufacturers of the rubber products may aim to tap the local market of the state.
Another very important opportunity lies in the form of Bangladesh market. Presently annual trade is
more than Rs.170 million. The trade relationship beetween Tripura and Bangladesh is a very natural one
due to the geographical location. Most of the important Bangladesh towns are less than 150 kms from
Tripura. Also the developments taking place to further facilitate INDO - BANGLA trade gives further hopes
(recently establishment of rail links between Agartala and Akhaura in Bangladesh has been agreed in
principle).
The subsidies and the tax exemptions provided by the state and the central government can help in many
ways to bring down the production cost and is an opportunity that can be tapped by the manufacturers to
their advantage.
THREATS: -
Major threat lies in the form of competition from outside the state. Producers out side the state, in general,
enjoys “ECONOMIES OF SCALE” of production hence achieving low cost of production and relatively
betters quality, owing to heavy capital investment.
STRENGTHS: -
Major strengths are production of natural rubber amounting to 14,905 Mt. In the year 2003- 2004 and the
production is growing steadily also there is ample availability of labour.
WEAKNESSES: -
Major weaknesses are that there is no Rubber technologist available in the state. Also technically trained
manpower is not available. There is no agency dealing in rubber chemicals in the state and logistic
problem throws up a great challenge for the manufacturing sector.

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ANALYSIS OF THE MARKET BEHAVIOUR AND SUGGESTED OFFERINGS
Analysis of the consumer behaviour reveals that the market is highly “PRICE SENSITIVE” and also looks
for “VALUE FOR MONEY”. Hence any product offered should be low in price and should give a good
value for money spent on that product.
Perceptual Mapping will help better identify the product-offering zone in a better way.
High Quality
IV I
LOW PRICE HIGH PRICE
III II
Low Quality
Though the quadrant IV is the most preferred zone quadrant III may be practically feasible
Marketing Strategy
Though it is very difficult to generalize marketing strategy for products that would be quite different from
each other a common strategy may act as a basis of detailed strategy product wise.
Target Market: - Depending on the product, market may be identified, it may be consumer market or
industrial market and upon selection of market it may be divided in to segments to target it.
Positioning: - The position should be “ More For Less”
Price: - Slightly lower than the competitors, has to be a price leader.
Distribution Outlets: - Depending on the type of the product, wholesalers, Retailers or door to door sales
channels may be selected.
Financial Objective: - Try to achieve the break even as early as possible.

8. 8
An indicative list of rubber products that can be considered for production at Tripura.
1. Latex based products
1.a. Rubber Bands
1.b. Balloons
1.c. Latex Adhesives Latex
1.d. Ordinary Rubber Gloves
1.e. Foam products
2. Dry Rubber based products
2.a. Black molded items like washers, bush kits, brake shoes etc.
2.b. Micro cellular sheets
2.c. Rubber Toys
2.d. Hawai Chappals
2.e. Rubber Mats
2.f. Other products like doormats, Black tapes etc.
3. Processing
3.a. Rubber wood processing
3.b. Rubber compounding

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4. ISSUE ANALYSIS
The core issues faced by the industry is as follows:
 How to achieve the cost of production and quality, which can face the competition
from the products from outside the state and sustain profitably in long run?
 How to match the pace of the dynamic business environment and remain
competitive?
PROBLEMS IDENTIFIED
(i)
For manufacturers of Rubber products apart from natural rubber chemical and
synthetic products may be other important raw material, which has to come
from mainland. In the absence of rail route this has to come using the road
transport, which is comparatively costlier. Also as the chemicals are to come
from outside the state a high inventory level has to be maintained by the
manufacturers hence adding to the cost.
(ii)
There are no skilled technicians available in the state for servicing of
machinery used in a rubber manufacturing units, also non-availability of spare
parts can make maintenance of machinery a very costly affair (To & Fro
airfare to Kolkata is more than Rs. 6000.00, the nearest resource center).

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(iii)
Proper technical knowledge is a must for producing quality products is
required but No rubber technologists or Rubber chemists are available in the
state also there is no information and knowledge base support system
available in the state. The engineering college and the polytechnic college
don’t have chemical engineering departments.
(iv) Latex based simple products like rubber bands, balloons require low
investment and the manufacturing process is simple as well and has a
potential to go a long way. In long run, development of clusters may be
thought of but availability of required raw material is a problem in the way that
ammoniated field latex or crepe rubber is the suitable raw material.
Presently the rubber band manufacturing unit is using centrifuged latex (100
% DRC) as the raw input, costing approximately Rs. 81.00/ Kg, available from
latex centrifuge plant. This is a very high quality product and quite costly and
hence not suitable to be used as raw material for rubber band manufacturing.
Equivalent DRC content, ammoniated field latex would cost about Rs. 45.00

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Some suggestions to over come these problems:
 Any state government department, for ensuring a regular “Just In Time”
supply of rubber chemicals, must set up, a chemical depot. Also supply of
chemicals at subsidized rate may be thought of at this stage. This would help
the manufacturers to cut down their inventory level and lower the production
cost due to availability of subsidized chemicals. If it is difficult to establish a
new chemical depot Manimalyar Pvt. Ltd, (a joint venture of Rubber board
and Rubber producers society), having licenses to deal in all types of rubber
chemicals, should be used as a distribution channel
In the later stages, when the demand for chemical increases and the industry
matures a bit, private suppliers can step in.
 A full time Rubber technologist must be appointed by TFDPC for their
Training cum production center.
 Rubber board may be requested to open training and technical consultancy
division at Agartala.
 Ammoniated field latex must be supplied by TFDPC to facilitate the growth of
latex-based product manufacturing units.
 Engineering college should introduce B Tech chemical Engineering with a
specialisation in Rubber technology. Also the polytechnic college should
introduce short-term courses and certificate courses in rubber technology.
 Proper database/ information base must be established. Institutions like DIC,
SISI, NECON etc. must be given the task to conduct product wise feasibility
study and to prepare a localised information base.

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5. CONCLUSION
Certainly there exists a great potential for development of manufacturing activities
related to rubber at Tripura. As of now, the industry is in initial stage and is struggling.
To develop this industry a hand holding support is required from state government and
other support organisations.
Over a period of time, development of cluster related to some products like micro
cellular sheets, rubber mats, rubber bands, black moulded rubber products, may be
thought of, based on actual experiences certain product or product categories having
distinct comparatitive advantages over competitors may be chosen and developing
clusters may planned followed by forward and backward linkages hence increasing the
pace of economic development in the region.
The clusters thus formed would be having a geographically bounded concentration of
similar, related or complementary businesses, with active channels for business
transactions, communication and dialogues, that share specialised infrastructure, labour
market and services and that would be faced with common opportunities and threats.
Over a period of time formation of clusters would give an opportunity for the employees,
suppliers of raw materials and traders to change into manufacturers, thus widening the
manufacturing base.
Working in clusters these units will try to achieve the critical mass in production hence
facilatating forward linkages.
Also benefits like collective bargaining from their suppliers and buyers and availing
facilities like insurance and other incentives from the government and other support
agencies may be thought of.