C P operates a sapling nursery in Loei and believes more such facilities will be needed to help the industry develop.

The bright outlook in the next few years for the commodity has attracted more players but the government also wants to promote related businesses such as rubber nurseries and rubber manufacturing to support the growth.

CP Group chairman Dhanin Chearavanont announced recently that the group would place more emphasis on rubber and aimed to lead the business within the next few years.

He said the group had developed hybrid rubber tree saplings that could yield for up to 36 years, compared with 25 years for other strains. Investments to make rubber products such concentrated latex will also be made at plantation sites.

Thai Hua Rubber Co chief executive officer Luckchai Kittipol said the entry of CP reflected the promising future of Thai rubber thanks to strong exports and fuel prices that have significantly pushed up prices of competing synthetic rubber.

Raw rubber sheets in Thailand were trading last Friday at 130 baht, down from an average of 140 baht last month and a peak of 174 baht in February. However, prices are much stronger than the averages of 58 baht in 2009 and 105 baht last year.

Strong demand from China, mainly to feed its growing automobile industry, would push Thailand's rubber exports to 2.9 million tonnes this year, up from 2.74 million in each of the previous two years, he said.

Thai investors have been expanding rubber plantations both locally and abroad and rubber tree expansion is a key policy of many political parties.

"There's nothing wrong with promotion but they should promote the nursery industry to support such large expansion," said Mr Luckchai.