The rubber sector is a major stakeholder in terms of jobs creation for Liberians but there is this repeated call for the lifting Executive Order # 124, which bans the exportation of unprocessed rubber out of the country.
Hundreds of the 20,000 Liberians who are believed to be currently employed by the six rubber processing companies operating here, including Cavalla, Firestone Liberia (FSLB), Liberia Agriculture Company (LAC), Jeety Rubber and Lee Group are at the verge of losing their jobs with Firestone having the largest number of employees, followed by LAC.
According to a meetings held separately last week with the joint legislative committee on Agriculture and government officials, including Justice Minister General Oswald Tweh and Commercial Minister Amin Modad, the Liberia Agriculture Companies Association (LACA) comprising the six rubber processing companies and the Rubber Planters Association of Liberia expressed fears that the lifting of Executive Order#124 could discourage existing processors from expanding their factories and new ones from investing in Liberia.
LACA noted that such action would increase the cost of production ($/lb), causing some processors to reconsider whether to close their operations which would lead to redundancies, lower tax revenue, and a decrease in GDP.
For example, the two biggest Technically Specified Rubber (TSR) companies, Firestone Liberia and LAC, purchase approximately 60 percent and 30 percent of their rubber from smallholder farmers. These operations support the indirect employment of thousands of farm workers and transporters.
Firestone is constructing a second factory to produce Ribbed Smoked Sheet (RSS) that will be commissioned at the end of 2025. When commissioned, the factory will process most of the latex within its concession area.
Therefore, it would need to source additional cup-lump volumes from smallholder farmers to maintain its current TSR factory capacity.
These projections could decrease if the ban be lifted and these companies are currently shipping millions of metric tons of processed rubber annually and rely partly on cup-lump purchases from smallholder farmers.
The Lee Group and Jeety Rubber could close shop since their productions rely entirely on purchasing raw latex from small farmers. The Jeety Rubber Factory LLC’s current export projection is 75,000 metric tons of processed rubber per year.
“To supply sufficient volumes of cuplumps and latex to fulfill the processors’ factory capacity requirements, Executive Order #124 must be maintained. All the processors purchase and process rubber from Liberian farmers, providing a steady source of income to the farmers, their workers, and their transporters and contributing to Liberia’s economic development,” LACA said.
The Senate Joint Committee with Justice Minister Tweh and Commerce Minister Modad earlier LACA explained that maintaining Executive Order #124 would generate more employment at all levels across the Liberian rubber industry supply chain, add value, and increase government revenue.
LACA further fears that lifting the current moratorium could promote theft and supply of farmers’ cup lumps to brokers and/or exporters who do not comply with international standards on traceability, labor rights, and deforestation.
