Although global rubber prices remain on an upward trend, Vietnamese rubber enterprises are setting mixed profit expectations for 2022 due to differing business conditions and market exposure.
Positive Market Outlook
According to Trading Economics, on April 18, 2022, the natural rubber futures price in Japan reached 276 yen/kg (≈ USD 2,180/ton) — up 0.6% from the previous week and the highest since March 2021.
Prices have risen 9% since early April, and forecasts suggest the upward trend will likely continue through Q1 2023, potentially reaching 310.84 yen/kg.
Global rubber prices are also buoyed by high crude oil prices, which push up the cost of synthetic rubber (a petroleum derivative). In mid-April, crude oil was trading at USD 113.2/barrel (June contracts) and USD 107.9/barrel (New York light sweet crude).
Demand also remains strong — the global consumption of natural rubber in 2022 is expected to increase 1.2% year-on-year to 14.2 million tons.
Vietnam’s exports continue to perform well: in Q1 2022, the country exported 406,800 tons of rubber worth USD 715.4 million, up 0.3% in volume and 6.2% in value compared to the same period in 2021.
Domestically, rubber latex prices have remained stable between VND 310–350 per TSC unit, with the Vietnam Rubber Association (VRA) predicting a potential price increase in the coming months due to seasonal supply shortages.
Optimists and Cautious Players
Southern Rubber Industry JSC (CSM) is one of the optimistic players, targeting VND 4,954 billion in revenue (+2%) and VND 101 billion in pre-tax profit (+83%) for 2022.
The company plans to expand production capacity for motorcycle and automobile tires and enhance productivity through automation and new equipment.
Phuoc Hoa Rubber JSC (PHR) also projects solid growth, aiming for VND 2,252 billion in revenue (+16%) and VND 744 billion in net profit (+56%). PHR expects rubber prices to remain high and believes the global rubber market is entering a new upward cycle as supply tightens.
In contrast, Dak Lak Rubber Investment JSC (DRI) adopts a cautious stance. Operating mainly in Laos with 8,800 hectares of plantations, DRI faces labor shortages and foreign exchange risks due to its Lao Kip-denominated loans (over VND 256 billion).
If the Kip depreciates, the company’s revenue will be affected. Rising logistics and raw material costs further weigh on profitability.
DRI expects VND 599.6 billion in revenue (+slightly) and VND 79.2 billion in profit, down 5.7% from 2021.
Meanwhile, Da Nang Rubber JSC (DRC) forecasts lower revenue and profit — VND 4,428 billion (-slightly) and VND 256 billion (-12%) respectively.
The company cites labor shortages, container scarcity, and rising input costs caused by the Russia–Ukraine conflictas major headwinds.
DRC plans to focus on its core domestic product lines (AGSD, OTR, industrial tires) to maintain efficiency and market share.
Strong Q1 Results
Despite cautious outlooks, most rubber companies posted solid Q1 2022 results:
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DRI: Revenue VND 134 billion (+8%), profit VND 20.8 billion (+27%), achieving 22% of full-year revenue and 26% of profit targets.
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PHR: Parent company revenue VND 302.6 billion (+25%), net profit VND 240 billion (11× higher YoY), driven by a VND 289 billion land compensation gain from the VSIP 3 Industrial Park project.
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DRC: Revenue VND 1,283.6 billion (+40.6%), pre-tax profit VND 81.7 billion (+3%), with a stable outlook for Q2.