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Investment Opportunities » Agriculture and Agro-processing » Rubber »  
Invest in Dry Rubber Manufacturing in Liberia

Liberia has been in the natural rubber business since 1890. Liberia produced 63,000 tons of natural rubber in 2013. Most of Liberia’s natural rubber (55%) is produced by smallholders and medium size farm holders. The other 45 per cent is produced by concessions and used to supply Technically Specified Rubber for tire production.

There is scope for the expansion of Liberia’s capacity for natural rubber production to 325,000 tons as access to land is not a constraint and there is a large unexploited West African market for dry rubber products made from the compounding of ribbed smoked sheets and rubber crepe, including door mats, boots, bushels and gloves. With excess rubber, land and a cheap cost of production, Liberia is the optimal country to manufacture dry rubber in West Africa.

Where to source your RSS rubber for processing

Liberia has been in the natural rubber business since 1890. Liberia produced 63,000 tons of natural rubber in 2013. Most of Liberia’s natural rubber (55%) is produced by smallholders and medium size farm holders. The other 45 per cent is produced by concessions and used to supply Technically Specified Rubber for tire production. There is scope for the expansion of Liberia’s capacity for natural rubber production to 325,000 tons as access to land is not a constraint and there is a large unexploited West African market for dry rubber products made from the compounding of ribbed smoked sheets and rubber crepe, including door mats, boots, bushels and gloves. With excess rubber, land and a cheap cost of production, Liberia is the optimal country to manufacture dry rubber in West Africa.

Accessing electricity

Ribbed Smoked Sheet processing requires very little electricity, unlike technically specified rubber. Liberia will re- instates reliable on-grid electricity by 2017 and brings the cost down to 25 US$ cents per kilo watt hour through the rehabilitation of the Mount Coffee power station and the construction of Heavy Fuel Oil generation capacity. Three mini-hydro plants in Lofa and Bong counties and a biomass plant in Lofa are also planned.

Getting your inputs in and your outputs out

Liberia has completed the pavement of the main highway from Liberia to Ganta up to the Guinean border, thus linking the main horticulture areas in Lofa, Bong and Nimba to the Freeport of Monrovia, the Port of Bassa, and the Monrovia- Bomi Highway that links to the border of Sierra Leone. Travel time from Ganta to Monrovia is about 3 hours.

Liberia has major sea ports in Monrovia, Buchanan, Greenville and Harper that can be used for the import of inputs and export of processed rubber.

It is cheap and easy to set up a business in Liberia

The cost of registering a business in Liberia is US$900. The process takes 48 hours. Please visit www.lrb.gov.lr/new The NIC is ready to assist you through all processes.

Supportive tax regime

Liberia’s income tax rate is 25% on profits or 2% of turnover. This is competitive by global standards. There are no capital controls, so any capital brought in to Liberia can easily be expatriated. If capital investment of US$1 million is made, or, in the case of a Liberian owned company US$300,000, a 30% incentive deduction is allowed on up to 100% of the qualifying cost of equipment and machinery. Such investors can also obtain a tax deduction of 10% off the cost of building and fixtures used in manufacturing finished products with 60% local raw material. Investors in rubber cultivation and processing qualify. Investments exceeding $10 million are automatically incentivized. Investments in economically deprived zones or those generating more than 100 direct jobs can qualify for additional incentives of up to 12.5% and a further 10% respectively.

 


 

Rubber

  • Long standing history in rubber production
  • Potential to produce dry rubber products such as door mats, boots, bushels and gloves
  • Large unexploited West African market for ribbed smoked sheets, rubber crepe & rubber products

NOW: Scale up RSS Production

  • When production scaled up (across 6/7 clusters), will reach 80-100t per month, then rubber manufacturing (hoses, mats, tubes, etc.) becomes feasible in Liberia.
  • Need 3 / 4 more RSS Business Cluster Developers. USD 1.5m investment

Potential: Start Rubber Compounding/ Manufacturing

  • Once threshold of 80-100t RSS per month reached:
  • Need investor in rubber compounding (melting rubber and mixing with chemicals). And in rubber manufacturing into finished products

Capacity Potential:

  • 63,000t of latex produced in 2013 with split: 55% small farmers 45% from concessions (pre-war data)
  • Potential expansion to 325,000t
  • Only through successful replanting of smallholder farms’ rubber trees.

Replanting Model:

  • Most farms are owned by groups of multiple family members, which makes investing complicated
  • Need for private sector investors to take over farms (lease or buy from families) and replant trees

Investment Opportunity

  • Pilot: Set up 3 replanting companies that replant one 200ha farm each
  • Cost to replant one farm USD 400k-600k + leasing/purchasing land costs
  • Revenue intake per farm per year of USD 180k (1.5t of Latex per ha)

Source: Ministry of Commerce & Industry


 

 
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