Rubber Products, Fabricated
SIC 3000
NAICS 326
Fabricated rubber products include a diverse assortment of goods made from both natural and synthetic rubber. Important product categories include rubber belts and hoses, rubberized fabrics, rubber gaskets and seals, rubber tubing, and mechanical rubber components.
Tires, which account for roughly 50 percent of the world's rubber output, are discussed separately under Tires and Inner Tubes.
The world tire and rubber market reached $53.3 billion in 2003, an increase of 3.6 percent from the previous year, and is forecast to climb 25.7 percent to reach $66.93 billion by 2008. According to the Rubber Manufacturers Association, in 2005 some 60 percent of all rubber produced was used for tires, with the remaining amount distributed among all other applications. Fabricated rubber products are often used as intermediaries for products in other industries: more than 80 percent of the industry's output is channeled into other products, including motor vehicle parts, sports equipment, and a wide variety of other applications. In the late 1990s synthetic rubber accounted for approximately 65 percent of all rubber production. About one-fourth of all synthetic rubber is used in the production of tires. In the mid-2000s, the world's top rubber manufacturers were Bridgestone, Michelin, and Goodyear. By that time, U.S. rubber plants were looking at ways to reduce emissions of cancer-causing 1,3-butadiene, among other air pollution toxicants.
By product type, world rubber consumption has changed little since the mid-1980s. The industry is now characterized as quite mature, with intense competition and enormous sales, but with relatively low profits. Immediately following the conclusion of World War II, the United States held more than 50 percent of the world's rubber market share. During the mid-twentieth century, Japan, Western Europe, and the Soviet Union joined the United States as leading producers of rubber goods. Since the 1980s, a chief industry trend has been increased production by emerging industrial powers in Latin America and Asia. Some industry analysts contend that long-term growth in rubber products shipments will mirror gains in global economic growth, with demand for non-tire applications increasing most quickly.
Rubber products are manufactured with both natural and synthetic materials. Natural rubber is a yellowish, elastic substance tapped from various tropical plants, particularly the renowned rubber tree. Synthetic rubber usually starts out as petroleum or coke (a distillate of coal) and is created through a process of polymerization whereby molecules are rearranged to resemble long chains. The resulting substance is a tacky, soft thermoplastic (a substance that can be re-melted and manipulated) that resembles natural rubber. Most synthetic rubber is produced in equatorial regions in Asia, Africa, and South America. Much of that output is shipped to developed nations for the manufacture of tires and other goods. Natural rubber is more commonly manufactured in the United States, Japan, Europe, and the Commonwealth of Independent States (CIS).
Natural rubber offers a narrow range of grades and characteristics in comparison to synthetic rubber, but it proffers superior attributes important to the manufacture of many products. Natural rubber is strong, sticky, resilient, fatigue-resistant, and has outstanding tensile strength. Those traits are necessary in products that require low heat build-up, tear resistance, and the ability to withstand repeated flexing. A common example of such an application is that of tire sidewalls. Natural rubber also is desirable as a latex for dipped rubber products such as condoms and surgical gloves. A chief disadvantage of natural rubber in comparison to synthetic rubber is poor resistance to oxygen, oil, and other natural elements.
The four primary stages of the manufacturing process for dry rubber goods are preparing the raw rubber, compounding, shaping, and vulcanizing. Compounding entails mixing rubber and chemicals to create different types and grades of rubber, and synthetic rubber and natural rubber are often combined during this stage of the manufacturing process. Rubber characteristics can be modified during this production step with additives and processing agents such as accelerators, antioxidants, flame retardants, and stabilizers. The goal is to produce rubber materials with the traits needed for specific applications. During the shaping and vulcanization processes, the rubber is formed and treated with heat and chemicals to contribute properties such as resilience and elasticity. The end product typically cannot be re-melted and formed.
Chief benefits of rubber products, as opposed to goods produced from other natural and man-made materials, include poor electrical conductivity; the ability to flex and regain an original shape; low production costs; and, particularly in the case of synthetic rubber, resistance to corrosion and breakdown caused by exposure to fluids and gases. Those characteristics have made rubber a desirable substance in demanding applications such as automobile tires and account for rubber's reputation as an ideal substitute for wood, ceramics, metals, and fibers. In addition to tires, the largest rubber production category, other major rubber product segments include vehicle parts such as hoses and belts; wire and cable covering; clothing and footwear; construction materials such as roofing products and geo-textiles; consumer items; and latex goods such as gloves and adhesives.
The rubber products industry is a mature one. New products play an important role, but producers compete largely on price. Factors such as high productivity, control of raw material resources, diverse markets, and economies of scale are thus crucial to a company's success or failure in the industry. The industry is highly consolidated and market leaders are entrenched. Many of them are integrated, with vast holdings of rubber plantations in developing nations. They are also heavily dependent on exports and invest extensively in foreign manufacturing operations. Major barriers to entry for new competitors, particularly in the tire segment, include massive start-up costs and technological expertise.
The rubber products industry is heavily impacted by both national and international regulations. In addition to tariff and trade restrictions that typify most commodity-like industries, environmental regulations were increasingly impacting producers in the 1990s. Rubber's longevity, combined with problems related to toxicity of manufacturing processes, have forced the industry to comply with pollution-related initiatives designed to blunt the impact of rubber manufacturing on the environment. Manufacturers have increasingly been forced to help find—and pay for—solutions. On the production side, proliferating national legislation in the mid-1990s in some countries sought to reduce toxic emissions of nitrosamines and other substances. Nitrosamines, a suspected human carcinogen, are released during the compounding, forming, and vulcanization process. Regulations designed to control emissions of such manufacturing by-products have in some cases resulted in higher manufacturing costs and reduced competitiveness of producers in developed regions.
The rubber products industry dates back to at least the fifteenth century, when European explorers witnessed natives in the New World using latex to make bouncing balls, bottles, waterproof apparel, syringes, and other items. What was later called rubber first came to Europe in 1521, when Aztecs transported from Mexico played a game using a rubber ball in...
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