ecyclingusa tire recycling businesses 26 feb 2013

8/12/2019 ECyclingUSA Tire Recycling Businesses 26 Feb 2013

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Chuck Vollmer & Peter Soriano26 February 2013

Tire Recycling Business


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Types eCycling Systems

eCycling USA will tailor processes to community needs.

Electronic Waste White Ware (Refrigeration)

Television (CRTs) Tires (Rubber & Steel)

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Tire Plant Layout & Schematic

Plant foot print: 38,000 sq. ft. (100 x 380) with 40 foot ceiling.4


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Key Components

Capable of processing down to 200 mesh powder (99.99% pure).

ShredderMagnetic Steel

Separation

Fine Processing,

Cryogenics &Ultra-fine Processing

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US Scrap Tire Market Trends

Approximately 300 million scrap tires were generated in 2011.

Market has matured and is now dominated by larger companies.

Demand, as opposed to reclamation, now drives market.

Market has four major segments in 2012:

Tire derived fuel (power utility plants): 153 million tires

Ground rubber (mulch, pellets and powder): 34 million tires

Exports (mainly Asia): 20 million tires

Tire derived aggregates (roads): 18 million tires

Online buying and selling has increased significantly. ChinasAlibaba.com is a major player. Demand for energy in Asia andspecialized applications are growing. Increased exports to China,India, Korea and Vietnam are likely.

Mature and changing marketplace that will be dominated bythose with access to tires and buyers. 6


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Tire Recycling Businesses

Key business components:

Tipping Fees

Rubber Recycling

Steel Recycling

Biofuels (R&D)

The key factors for a long term economic success:

Access to a consistent supply of scrap tires

Judicious selection of the appropriate recycling technology

Sound marketing for the recycled product

Customers

There are essentially two businesses: scrap tire processorsand end-user manufactures.

Rubber Steel

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Cost/Price Considerations

Typical Land Fill Tipping Fees: $233/ton

Tire Chips/Shreds: $19 to $55/ton Ground Rubber:

Rubber Mulch $380 to $750/ton

Pellets/Powders $715 to $7,985/ton

Steel: $250 to $550/ton

Note: commodities prices as of 18 Sep 12, subject to change.

Cost of a eCycling/CHEMA 30,000 ton per year system (about 3million used tires) that produces 24,000 tons of fine powder is in

the $30 million range. 24,000 tons is about 3% of the annual

ground rubber market.

Waste Per Ton Per Item

MSW 57.28$ -

CND 68.38$ -

Tires 231.90$ -

2.00$

5.00$

Auto Tire

Truck Tire

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Rubber

Chips Crumb Powder

Tons/Year 7,500 5,000 5,000 11,000 2,500

$/Ton $250 $19 $380 $715 $0

Revenue $1,875,000 $95,000 $1,900,000 $7,865,000 $0

Total Revenue

EBITDA (20%)

Rubber

Chips Crumb Powder

Tons/Year 7,500 0 5,000 16,000 2,500$/Ton $550 $55 $750 $7,985 $0

Revenue $4,125,000 $0 $3,750,000 $127,760,000 $0

Total Revenue

EBITDA (30%)

$135,635,000

$40,690,500

Steel Fluff

Steel Fluff High

Estimate

$11,735,000

$2,347,000

Low

Estimate

30,000 Ton/Year Plant

Revenue/EBITDA EstimatesNot Including Tipping Fees

9Detailed business plans will be tailored to each operation.


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US Scrap Tire Disposition

eCyclingUSA/CHEMA system specializes in high purity groundrubber processing and applications.

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Source: 2011 Rubber Manufactures Association, Inc.


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Ground Rubber Applications

Ground rubber is the most lucrative part of the market.11

Mesh Applications

4-40

mesh

Playground surface material, mulch, animalbedding, molds, surface materials

(playgrounds, racetracks), carpet padding,

rubber products, road enhancement

material, manufacture of reclaimed rubber,

matting, paste and sealing materials,

modified rubber products, road pavement

40-120

mesh

Rubber plastic materials, rubber products

(such as railway and subway ties), brake

pads, modified asphalt, solid tire production

120-200+

mesh

Textile material coating, special paper

coatings, painting materials and additives,

special rubber products, medical devices,

high level water proofing, materials for

military uses
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US Ground Rubber Market


2005 to 2009 the market doubled and even grew during the Great

Recession of 2008/09.12

800,000 Tons


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Tire Derived Fuel (TDF)

Tire-derived fuel is composed of shredded tires

(usually 1 and 2) with most of the metal wirefrom the tire's steel belts removed.

TDF may be mixed with coal or other fuels usedin cement kilns, pulp and paper mills, electricalutilities, industrial boilers as well as dedicated

tires-to-energy plants.

TDF is a secure market with lots of low end processors.13

TDF has high energy contentabout the same as petroleum.

Key players in the TDF sector are: scrap tire suppliers, TDFproducers (tire shredders), TDF users (burners) and

government agencies (approvers). TDF market may have peaked due to the recession and

availability of scrap tires, but it is still a very secure marketand prices for high quality TDF products are strong.


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Tire Derived Fuels Market


TDF market may have peaked.14


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Civil Engineering Applications

Tire derived products, mostly 1 tire chips, are sometimesused to replace conventional construction material, (road fill,

gravel, crushed rock or sand). Benefits of using tire chips instead of conventional materials

include: reduced density, improved drainage properties,better thermal insulation.

The following are examples of projects where scrap tire chipshave been successfully used in civil engineering applications: Leachate drainage material at municipal solid waste landfills

Alternative daily cover at municipal solid waste landfills

Lightweight fill for embankments and retaining walls

Insulating layer beneath roads and behind retaining walls

Civil engineering applications of scrap tires are expected tobecome more widespread as more and more applications canbe proven to be technically and economically viable.

Decreased federal, state and municipal government

infrastructure spending will continue to impact this sector.15


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Rubber Modified Asphalt (RMA)

Reduces reflective crackingin asphalt overlays

Reduces maintenance costs

Improves resistance tocracking in new pavements

Improves resistance torutting in new pavements

Increases pavement life

Improves skid resistance

Decreases noise levels

Uses 500-2000 scrap tiresper lane mile

I-40 near Flagstaff, AZ

Paved in 1990

Without RMA With RMA

A Rubber Asphalt Association was formed to work with DOTs.16


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Innovative Railroad Application

TieTek is producing 25,000railroad ties per month madefrom recycled rubber and plastic.

Many of the major railroad andmass transit authorities are

experimenting with these ties. 40 year life span, versus 5-20

years from wood ties.

Wood Recycled rubber

The US is seeing a resurgence of railroads.17


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ecyclingusa tire recycling businesses 26 feb 2013

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