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Thousands of Liberians jobs at stake

As LACA pushed to maintain moratorium on unprocessed rubber

Thousands of Liberians working in the rubber sector will face redundancy if Executive Order #124, which bans the exportation of unprocessed rubber, is lifted, LAC fears.

Monrovia, Monday, March 18, 2024- Thousands of Liberians working in the rubber sector find their jobs at stake amidst repeated calls for lifting Executive Order # 124, which bans the exportation of unprocessed rubber out of the country.

A rough estimate of Liberians currently employed by the six rubber processing companies operating here, including Cavalla, Firestone Liberia (FSLB), Liberia Agriculture Company (LAC), Jeety Rubber, and Lee Group, is 20,000. Firestone has the largest number of employees, followed by LAC.

In separate meetings held last week with the Joint Legislative Committee on Agriculture and government officials, including Liberia’s new Justice Minister and Attorney 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. This, in turn, 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 companies are currently shipping millions of metric tons of processed rubber annually and rely partly on cup-lump purchases from smallholder farmers.

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These projections could decrease should the ban be lifted. 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.

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.

“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.

Moreover, in their meetings in the Senate Joint Committee and earlier with Justice Minister Tweh and Commerce Minister Modad, 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.

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One Comment

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