Bridgestone’s Bill Niaura knows this: It’s just not smart business to rely on a natural resource only found in one part of the world. Especially when that area can be, well, tumultuous. And no, he’s not talking about oil. "From a business perspective, as an industry we’ve done bad business," he says. "It’s all single source from one rubber tree."
Bridgestone makes tires. And while synthetic tires are derived from petroleum-based products, there is still a large market for tires made out of natural rubber. Because despite all we can do with science, synthetic can’t cut it in high-end applications like the real thing. Therein lies the problem. Real rubber is for the most part only found in Southeast Asia these days. Between coups and skyrocketing land costs, the future of rubber trees in countries like Thailand and Malaysia is bleak.
And where synthetics can be used, it takes a barrel of oil to produce one tire from synthetic rubber, says PanArdius’ Michael Grossman, spokesman for a leading guayule research and develop company. "This is why over the last approximately 20 years the market share of synthetic rubber has dropped from about 70% to 58%."
The solution for finding a better rubber for tires, says Niaura, Bridgestone’s director of new business development, is a low-water-using American shrub called guayule. Bridgestone hopes to change that by opening a BioRubber process research center in Mesa, Arizona, this fall. The new facility will complement the company’s guayule research farm in nearby Eloy, which opened last September.
Turning guayule into rubber isn’t new. During World War II, the Japanese cut off the U.S.’s supply of Asian rubber, and guayule was often used as a replacement. But after the war the U.S. burned the 25,000-acre crop. Since then the economics didn’t justify the cost once rubber became available again. "In the business world, the analogy I use is petroleum," says Niaura. "If gas trades at $50 a barrel, the only way to make it work is to drill a hole in Texas. If, say, it’s $70, you’ll pay to get it out of the ocean. If it goes to $100, you’ll invest in getting it out of Canadian sand." With rubber currently trading at around $2 a pound, it has now reached a price analogous to that $100-a-barrel level. There’s little reason to expect that to come down anytime soon.
Malaysia, Indonesia, and Thailand make 70% of the world’s rubber. The process of growing and harvesting rubber from trees is laborious. From the time you plant the tree it takes five or six years before any harvesting can begin. Then every day for the next 20 to 25 years of the tree’s life it has to be sapped. With rising labor costs and increased land values, rubber producers are either closing down or increasing their prices. In addition to the decrease in supply, there’s an increase in demand from nearby behemoths China and India.
That’s why Bridgestone is so eager for other options. The American-grown guayale is simple to cultivate and harvest. The processing is more complicated, but Bridgestone considers the extra backend labor worth it. Guayale tires won’t be sold for regular cars, which generally have artificial-rubber tires, but rather for heavy-duty applications such as mining vehicles, airplanes, and 18-wheel big rigs.
It's important to note that guayule won't displace hevea rubber in the global market, Grossman says. For the time being, it will simply cover the shortfall, and in the long term allow the U.S. to meet up to 30% of its annual need.
Bridgestone plans to have a first experimental guayale-rubber tire by the second half of 2015, but a commercial product isn’t likely until the early 2020s—not because of technology, but because of nature. "You can’t go out and buy guayale seeds at the garden center," says Niaura. "We have to make seeds, process seeds, get the acreage, get ready for planting—it’s a long time line, but it’s a big win at the end of the day."