Vital to everyday life and central to two of the world’s largest industries – transportation and healthcare – rubber is a key pillar in Malaysia’s export economy. Malaysia is the world’s fifth largest producer of natural rubber and the world’s largest exporter of rubber gloves. Indeed, rubber is forecast to overtake palm oil to become the country’s fourth biggest export category by value, as the number of cars soars to 2 billion globally by 2040.
Yet as is often the case, what is good for the economy is not so good for the environment.
“Rubber is the world’s number one environmental hazard,” says Vinod Sekhar, chief executive officer of Petra Group, a Malaysian company that develops rubber recycling technology, biotech, and financial software. “We throw away 1.3 to 1.5 billion tires a year,” he says, “which cause contamination of the soil and water and are perfect breeding grounds for disease-carrying agents like mosquitoes responsible for the spread of dengue and zika.”
Sekhar’s Green Rubber Group, part of Petra Group, has patented an approach that he describes as a “true recycling process”, which de-vulcanizes the rubber. It involves removing the steel and fibre from tires to get tire dust, after which a non-toxic, environmentally-friendly chemical is added. The dust then goes through a low-heat, patented process to produce a rubber compound that is 80% of the original version. The recycling is fully automated and designed to prevent re-vulcanization, which leads to a lower quality rubber.
Green Rubber has developed a factory at Putra Industrial Park close to Kuala Lumpur, that will have an annual production capacity of 25,000 tonnes. The company has expansion plans to open plants in the UK, US, India, and Indonesia.
“The process is a win-win,” says Sekhar. “No one loses in the value chain as the recycled rubber is cheaper at $1,250 a tonne compared to $2,500 for the virgin compound.”
Nevertheless, there is some way to go in gaining momentum for tire recycling. According to the World Business Council for Sustainable Development, the recovery rate for end-of-life tires is just 34% in Malaysia, fifth from the bottom in a study of 20 countries. The best performer, India, has a 98% recovery rate. At the bottom of the league is Saudi Arabia, recovering just 5% of used tires.
Recognizing the importance of green technology, the Malaysian government introduced several initiatives to help companies be more sustainable in last year’s budget. These include giving incentives to companies that produce environmentally-friendly plastic made of bio-resins and bio-polymers, as well as setting up a RM2 billion (US$ 492m) Green Technology Financing Scheme.
Sekhar’s view is that the private sector also has a stronger role to play, and his company is launching a social capitalism forum later this year in Kuala Lumpur, which is about conducting business with a conscience. “I’m a strong believer that business can no longer operate independently of societal development, believing that its job is just to make money. It has to be involved in societal growth and solving some of society’s problems, be they political reform, gender quality, or poverty eradication,” he says.