Crisis may affect Asian synthetic rubber

Crisis may affect Asian synthetic rubber

SINGAPORE (Reuters): The financial crisis ripping through Asia
is likely to squeeze capital for expansion of the region's
synthetic rubber manufacturing firms, commodity firm LMC
International Inc said in a report issued on Tuesday.

"Given the recent crash recorded in the Hong Kong stockmarket,
it is likely that the Thai, Malaysian and Indonesian chemical
majors will find they are not alone in facing financial
difficulties," LMC's November rubber report said.

"The spate of currency devaluations in Southeast Asia has put
financial pressure on synthetic rubber producers in the region,
particularly those currently in the early stages of capital
expansion," the report added.

The report, distributed at a rubber conference in Singapore,
said the Hong Kong stock market slump would probably affect plans
to develop China's synthetic rubber manufacturing industry, at
least over the short term.

"Chinese joint venture partners listed on the Hong Kong Stock
Exchange may experienced difficulty in raising capital," it
added.

However, LMC said any slowdown in the development of China's
synthetic rubber manufacturing industry would probably be
temporary.

"The medium term prospects for the Chinese market remain
promising, with strong projected growth in the automobile
industry feeding through to rapid growth in the tire
manufacturing sector," it added.

"The major multinational rubber manufacturers are aware of the
long-term market potential, and, having exerted considerable
effort in establishing joint venture agreements with local
manufacturers, will be reluctant to leave their development plans
on the back-burner for long."