Scrc Tircs.

A Piicing Stiutcgy loi u

Rccycling Inoustiy
BY KLNNLTH C. O\LN
- : - + 7 6 1 8 - 5 7 ) 4 ;
Tnc c:o|ution oj scrc tircs jrom gcrbcgc, to cn:ironmcntc| rob|cm, to :c|ucb|c rcsourcc ncs
comc cbout in |itt|c morc tncn c dcccdc. A|tnougn tnc tccnno|ogics jor tirc rcc,c|ing crc stcrting
to mcturc, tncrc ncs bccn |itt|c cgrccmcnt conccrning tnc bcst uscs jor tnc 2. mi||ion tons oj
scrc tircs gcncrctcd cnnuc||, in tnc Initcd Stctcs c|onc. Tnis cc||s jor rcc,c|ing strctcgists to
dc:c|o cn cconomic modc| tnct mutuc||, bcncjits su|icrs cnd uscrs, c jrcmcuorl tnct ui||
idcntij, |ucrcti:c oortunitics uitnin tnc rubbcr rcc,c|ing industr,.
Tnis modc| gocs bc,ond tnc nistoric :c|uc oj rcc,c|cd mctcric| cnd is bcscd uon tnc rc|cccmcnt
:c|uc oj :irgin mctcric|s tnct crc uscd in currcnt roccsscs. Rc|cccmcnt :c|ucs crc cc|cu|ctcd
using c dctcbcsc oj roducts c|ong uitn tnc :o|umcs cnd grcdcs oj rubbcr cnd otncr cdditi:cs
consumcd cnd cccctcb|c crccntcgcs cnd sccijicctions jor inc|usion oj rcc,c|cd mctcric|.
Tnc dctcbcsc c|so inc|udcs tnc :o|umcs cnd riccs jor :crious :irgin mctcric|s cnd currcnt ricing
b, grcdc cnd uc|it, jor rcc,c|cd crumb rubbcr. Iscr scnsiti:itics toucrd substitutc cnd/or
rcc,c|cd mctcric|s crc c|so tclcn into cccount. Tncsc scnsiti:itics rc|ctc, not on|, to cccctcb|c
rcc,c|cd contcnt uitnin cccn roduct, but comcrcti:c ricc scnsiti:it, cs uc||. A sccond
dctcbcsc cctc|ogs rcc,c|ing mctnods.
!
Tnc jocus ncrc is on using untrcctcd crumb rubbcr to
roducc tnc :crious grcdcs oj rcc,c|cd crumb rubbcr jor tnc grcctcst rojit. Surjccc trcctmcnts
cnd dc:u|ccni:ing roccsscs crc rcid|, coming to mcrlct. Tnc, ccn cnd ui|| cjjcct tnc :c|uc oj
crumb rubbcr. Houc:cr, tncsc crc so ncu to tnc mcrlct tnct riccs crc citncr unc:ci|cb|c or not
,ct stcbi|i:cd.
42 C0RP0RATE ElVlR0lNElTAL STRATE0Y
S
yntlctic rullcr accountco lor alout 0 pcr-
ccnt ol total Nortl Amcrican rullcr consump-
tion in 199, accoroing to tlc Intcrnational
Institutc ol Syntlctic Iullcr Iroouccrs (IISII).
Imports ol natural rullcr comprisco tlc rcmaining
0 pcrccnt. Tlc manulacturc ol tircs accounts lor
alout 60 pcrccnt ol glolal syntlctic rullcr ocmano,
wlilc tlc proouction ol otlcr auto parts accounts lor
an aooitional 10 pcrccnt.
2
Tlc total U.S. rullcr markct cxcccoco tlrcc mil-
lion mctric tons lor tlc lirst timc in 1991. Accoroing
to tlc Iullcr Manulacturcrs Association (IMA)
syntlctic rullcr consumption is cxpcctco to grow
approximatcly onc pcrccnt pcr ycar, ano natural rul-
lcr consumption will lc rclativcly llat tlrougl tlc
cno ol tlc ccntury. ;scc Ixlilit 1, rignt)
Volumcs, Priccs, and Trcnds oI Virgin
Matcrials
Dcmano lor syntlctic rullcr prooucts las lccn
growing stcaoily in major inoustrializco countrics
ano at a ratc grcatcr tlan lor natural rullcrs.
Howcvcr, witl total markct growtl lorccast at only
onc pcrccnt pcr ycar, syntlctic rullcr proouccrs
lavc lccn unallc to raisc priccs to kccp pacc witl
tlc incrcasco cost ol tlcir major ingrcoicnts incluo-
ing cvcrytling lrom ctlylcnc to propylcnc ano
lutaoicnc.
1
Tlis prollcm, lor syntlctic rullcr
manulacturcrs, is a potcntial opportunity lor rccy-
clcrs wlo may lc allc to lill somc ol tlc ocmano lor
raw matcrial morc prolitally. Tlc volatility ol tlc
natural rullcr markct may also provioc manulac-
turcrs witl an inccntivc to luy rccyclco matcrials, il
rccyclcrs can provioc a consistcnt proouct at a stallc
pricc. ASTM stanoaros arc currcntly lcing ocvcl-
opco. Vitl tlcsc stanoaros will comc stanoaroizco
graocs ol matcrial wlicl will lc traoco in tlc major
commooity markcts. As ol 199, tlc Clicago Boaro
ol Traoc lists cruml rullcr ly polymcr contcnt, par-
Scrc Tircs.
A Piicing Stiutcgy loi u
Rccycling Inoustiy
BY KLNNLTH C. O\LN
C0RP0RATE ElVlR0lNElTAL STRATE0Y 48
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
KEllETh C. 0wEl is lhe P|esideul ol lhe Edwa|d 0weu
Compauy, a ma|keliug, |esea|ch aud aua|ysis li|m. he ho|ds a
Nasle|s eg|ee iu Nauagemeul l|om lhe Reusse|ae|
Po|ylechuic luslilule ha|llo|d 0|aduale Ceule| aud au NBA
l|om RPl.
Trcnds in Rubbcr Products
3
0
5000
10000
15000
20000
25000
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
Tires & Inner Tubes
Fabricated Rubber NEC
Shipments ($ Millions)
L\nibit !
ticlc sizc ano loosc matcrial, carlon llack ano cont-
amination contcnt, not ly ASTM stanoaros.
Tirc Rccycling
All tirc rccycling proccsscs attcmpt to rcoucc olo
tircs into smallcr picccs lor rcusc or lurtlcr proccss-
ing. Tlc lirst stcp is usually slrcooing to rcoucc ovcr-
all volumc to makc lanoling ano storagc casicr. Ior
tlc most lasic uscs, sucl as tirc ocrivco lucl (TDI),
tlis is all tlc proccssing rcquirco. Howcvcr, lor most
otlcr uscs, tlc tirc clips must lc rcoucco lurtlcr in
orocr to prooucc morc usallc, liglcr valuc matcrials:
cruml rullcr, stccl, ano lilcr. Morc valuc can lc
aooco ly coating tlc cruml rullcr to improvc its
lonoing claractcristics, or using pyrolysis to prooucc
clar

, oil, ano gas. Tircs can also lc rcoucco to

rcclaim rullcr ly clcmical oigcstion. Bccausc rccy-
clco rullcr lacks somc ol tlc clasticity ano otlcr
ocsirallc claractcristics ano llcxilility ol virgin matc-
rials, it typically sclls lor 20 pcrccnt to 0 pcrccnt ol
tlc pricc ol its virgin countcrparts.
S
Howcvcr, in somc
applications, suitallc graocs ol rccyclco matcrial can
lring mucl liglcr priccs, as long as tlcir usc oocs
not incrcasc tlc total proccss cost lor tlc proouct.
9
Ixccpt lor pyrolysis, all otlcr mctloos ol tirc rccy-
cling lavc lccn on tlc incrcasc.
10
;scc Iigurc 2 bc|ou)
Shrcdding
Tircs can lc slrcooco ly slow spcco rotary slcars
or lammcrmills. Tlc lormcr proouccs a clcancr cut
tlat is morc acccptallc lor applications wlcrc tlis is
tlc only proccssing, sucl as lor ligltwciglt lill. Iitlcr
mctloo can lc cmployco in plant, or in molilc units
wlicl can lc takcn to oillcrcnt sitcs to rcoucc wlolc
tirc transportation cxpcnsc. Slrcooing costs, not
incluoing lalor, transportation or sitc costs, arc
approximatcly $0.21 pcr tirc, $0.2S pcr tirc lor wirc-
lrcc TDI (or 1 ccnt to 1. ccnts pcr pouno).
11
Oltcn,
tlcsc costs can lc morc tlan ollsct ly tipping lccs
wlicl avcragc approximatcly $0.0 pcr tirc (2. ccnts
pcr pouno). Tlc cno proouct ol tlis proccss rangcs
lrom tirc strips oown to slrcos, wlicl can pass
tlrougl a two-incl scrccn. Tlis matcrial is most
oltcn usco as TDI, lut is also suitallc lor somc civil
cnginccring applications. As TDI, its valuc is limitco
ly tlc valuc ol its compctitor, coal, to approximatcly
$0 to $0 pcr ton. To aclicvc liglcr valuc ano lincr
graocs, lurtlcr proccssing, is rcquirco.
Adding Valuc
Tirc clips, lrom slrcooing, can lc rcoucco, ano
tlc stccl ano lilcr rcmovco ly mcclanical grinoing
mctloos. Higlly cllicicnt tcclniqucs, sucl as tlc
usc ol scrratco grinocrs, can prooucc cruml rullcr
ranging lrom 10 to 0 mcsl, wlicl currcntly sclls at
a pricc ol $0.11 to $0.1 pcr pouno. Mcclanical
grinoing tcnos to prooucc rougl cogco particlcs
witl many lair-likc appcnoagcs. Dcpcnoing on tlc
application, tlcsc can lc citlcr an aovantagc or ois-
aovantagc. Tlc incrcasco surlacc arca proviocs a
morc intimatc lono witl virgin matcrials. Howcvcr,
44 C0RP0RATE ElVlR0lNElTAL STRATE0Y
V5l2 KEllETh C. 0wEl
Products Currcntly Madc
Irom Rccyclcd Crumb Rubbcr
F|||ar poWdar-li|es, mo|ded |ubbe| p|oducls, hoses,
b|ake pads, aud mud l|aps.
0onsIrucI|on-|ooliug, wale|p|ooliug, souud & vib|aliou
dampeue|s, sea|auls, cau|kiug compouuds, e/pausiou
joiuls, aud lhe|ma| iusu|aliou.
8urIac|ng-a|euas, amusemeul pa|ks, |iveslock, p|ay-
g|ouuds, jelly & sea wa|| coaliug, |iue|s lo| |audli||s aud
|ese|voi|s.
h|ghWays-aspha|l addilive.
Enargy-lue| lo| powe| p|auls, pape| mi||s, aud cemeul
ki|us.
Agr|cu|Iura-soi| ae|aliou aud de-lo/ilicaliou, go|l cou|se
g|eeu |iue|s, aud mals.
5
HS Markct Ior
Tirc Dcrivcd Crumb Rubbcr

0
160000
140000
120000
100000
80000
60000
40000
20000
1994 1995 1996(est)
Asphalt Products
Athletic & Recreation
Rubber/Plastic Bound Products
Molded/Estruded Products
Friction Materials
Pneumatic Tires
L\nibit 2
it also raiscs potcntial llistcring prollcms ouc to
oxioation. Amlicnt grinoing proccsscs all gcncratc
lcat, wlicl can altcr tlc propcrtics ol tlc rccyclco
rullcr. Icgarolcss, grouno rullcr can only lono
mcclanically witl tlc otlcr matcrials in tlc llcno,
not clcmically as virgin matcrial can, unlcss it can
lc ocvulcanizco, wlcrcly tlc clcmical links pro-
oucco in tlc original matcrial arc oclinkco. Vitlout
tlis lurtlcr proccssing, morc ocmanoing applica-
tions rcquirc incrcasingly smallcr crumls witl cvcr
incrcasing proccss costs.
Somc companics arc now prooucing surlacc
trcatmcnts lor grouno rullcr to makc rccyclco
cruml rullcr pcrlorm morc likc its virgin countcr-
part.
12
Many ol tlcsc trcatmcnts improvc tlc utility
ol rccyclco rullcr, lut lall slort ol tlc goal ol crcat-
ing a rccyclco matcrial comparallc to virgin quality.
Tlc most rcccnt ocvclopmcnt is a ocvulcanizing
proccss ocvclopco ly STI-K Iolymcrs,
1
wlo las
patcnts pcnoing in countrics. STI-K ano its U.S.
sulsioiary, STI-K Iolymcrs Amcrica, arc now com-
mcrcializing tlis proccss worlowioc, using a tlrcc-
prongco approacl.
11
Tlcy will manulacturc ano scll
oclinkco cruml rullcr tlrougl an agrccmcnt witl
Bakcr Iullcr Company in Soutl Bcno, Inoiana, tlc
largcst scrap tirc proccssor in tlc U.S. Accoroing to
STI-K Amcrica Ircsiocnt, Irco Scisscgcr, six parts
Dclink will lc llcnoco witl 100 parts grouno tircs
to prooucc a commcrcial matcrial. Anotlcr avcnuc
to commcrcialization is liccnsing. Tlc tliro is toll
proccssing wlcrcly, accoroing to Custom Cryogcnic
Crinoing Corporation in Simcoc, Ontario, tlcy will
oclink lor a lcc. It is lclicvco tlat markcting ol tlis
patcntco proccss will lc a:
.tcclnical ano commcrcial lrcaktlrougl
allowing STI-K/CCCC to supply prcmium
pricco compounos at rcoucco priccs to rul-
lcr proouct manulacturcrs, cnalling tlcm to
lavc wastc-lrcc lactorics ano makc a signili-
cant contrilution to clcaning up tlc cnviron-
mcnt worlowioc.
Scvcral otlcr companics arc ocvcloping ocvul-
canizing proccsscs lasco on tlc samc looy ol
Iussian rcscarcl as STI-K, incluoing Cyclctccl,
Inc., Huoson, Ncw York.
Ivcn tlc U.S. Air Iorcc las a tirc rccycling
projcct lasco on an cxpcrimcntal, micro-
organism-lasco ocvulcanization proccss at
tlc Dcpartmcnt ol Incrgy`s (DOI) Iacilic
Nortlwcst Laloratory in Iicllano,
Vaslington. Tlc proccss is in commcrcial
trials at onc rccycling plant ano at onc slrco-
ocr, accoroing to a laloratory spokcsman.
1
Cryogcnic Rcduction
Cryogcnic proccssing cntails tlc cooling ol tlc
lcco stock to approximatcly -2 ocgrccs Ialrcnlcit
using liquio nitrogcn. Tlc coolco matcrial is
cxtrcmcly lrittlc, ano is lco oircctly into a coolco
closco loop lammcrmill/multi-statc scrccncr.
16
Tlc
wlolc proccss takcs placc in tlc alscncc ol oxygcn, so
surlacc oxioation is not a consiocration. Bccausc ol
tlc low tcmpcraturcs usco in tlc proccss, tlc cruml
rullcr ocrivco lrom tlc proccss is not altcrco in any
way lrom tlc original matcrial. Unlikc amlicnt
grouno matcrial, tlc crumls arc unilormly gcomctric
in slapc ano tlc particlc oistrilution lor any givcn
mcsl sizc is vcry narrow. As witl amlicnt grinoing,
tlis proccss gcncratcs a varicty ol matcrial sizcs, witl
yiclos oropping as rcquirco particlc sizc is rcoucco.
Currcnt Hscs oI Discardcd Tircs
LandIills, MonoIills, and SIoiage. Traoitionally,
tircs wcrc simply lurico in lanolills. Howcvcr, tlis
mctloo ol oisposal is now, lor all practical purposcs,
no longcr possillc. Tircs not only takc up a lot ol
spacc, lut tlcy tcno to work tlcir way to tlc surlacc
ovcr timc, oamaging tlc surlacc laycrs ol clay. Tlcy
also causc lcacling prollcms. Tlcrclorc, lor lotl
practical ano cnvironmcntal rcasons, most munici-
palitics in tlc Unitco Statcs no longcr pcrmit tlc
inclusion ol tircs in rcgular lanolills.
Monolills, lanolills ocoicatco to slrcooco tircs,
arc an cllort to oisposc ol tircs, ratlcr tlan rccyclc
tlcm. Vlilc monolilling coulo potcntially rcoucc
somc ol tlc cnvironmcntal prollcms ol mixing tircs
witl otlcr lanolill matcrials, it rcquircs sulstantial
cxpcnoiturcs lor lano, slrcooing ano lanoling. It is
also unlikcly tlat monolillco tircs will lc rcclaimco
at a latcr oatc lor lucl or any otlcr wortlwlilc pur-
posc. Tlis is not a currcnt practicc, lut ratlcr onc
unocr consiocration in a numlcr ol locations
incluoing Olio ano Nortl Carolina.
Vitl tircs lcing lannco lrom lanolills, tlcy start-
co to pilc up. In 1991, tlc U.S. Invironmcntal
Irotcction Agcncy (IIA) cstimatco tlc sizc ol scrap
tirc stockpilcs to lc two to tlrcc lillion tircs.
1
Ol tlc
C0RP0RATE ElVlR0lNElTAL STRATE0Y 45
A PRlCll0 STRATE0Y l0R A RECYCLll0 lluSTRY V5l2
rouglly 210 million scrap tircs gcncratco annually in
tlc Unitco Statcs, tlc quantity wlicl arc rctrcaoco,
lurnco as lucl or rccyclco, incrcasco lrom just 10 pcr-
ccnt in 1990 to 60 pcrccnt in 199.
1S
Howcvcr, cvcn
witl 60 pcrccnt ol tlc tircs lcing usco, tlat still aoos
96 million tircs pcr ycar to stockpilcs ano, to a lcsscr
cxtcnt, lanolills. Storagc is not a gooo long-tcrm
stratcgy lor scvcral rcasons. Iirst, tirc pilcs can catcl
lirc, ano wlcn tlcy oo, tlc lirc is vcry oillicult to
cxtinguisl ano cmits largc quantitics ol unlurnco
lyorocarlons ano noxious lumcs. Sccono, tircs tcno
to collcct rainwatcr ano promotc tlc lrccoing ol
mosquitocs. Tliro, tirc pilcs provioc iocal lrccoing
grounos lor rats ano otlcr pcsts. Vlilc various stratc-
gics lavc lccn ocvclopco to minimizc storagc prol-
lcms any long-tcrm solution to tlc tirc rccycling
prollcm will lavc to makc usc ol tlc lillions ol tircs
now in storagc as wcll as tlc ongoing strcam ol ncw
scrap. On tlc lriglt sioc, tirc stockpilcs can provioc
a stcaoy sourcc ol matcrials lor rccycling companics
as tlcy ocvclop tlcir long-tcrm tirc acquisition stratc-
gics. Many statcs, sucl as Orcgon, wlicl provioc sul-
sioics to companics tlat makc cnvironmcntally
acccptallc usc ol scrap tircs, also rcquirc tlat tlcsc
companics oisposc ol stockpilco scrap tircs as a prc-
octcrminco pcrccntagc ol tlcir total tirc supply.
19
Tiie eiived Inel (TI). Scrap tircs can lc
lurnco citlcr wlolc or slrcooco into TDI. Vlcn
lurnco at appropriatcly ligl tcmpcraturcs (ovcr
,000I), sullur cmissions arc lowcr tlan coal, ano
particulatc rclcasc can gcncrally lc maintainco
witlin an cnvironmcntally acccptallc rangc. Tircs
also prooucc morc lcat tlan coal, approximatcly
1,200 Btu/ll. Tlat mcans tlat a 20ll. passcngcr
tirc can gcncratc approximatcly tlc samc lcat as 0
ll. ol coal.
20
Tlrcc typcs ol opcrations arc currcntly
lurning tircs: ccmcnt kilns, papcr mills, ano utili-
tics. All lacc tlc samc matcrial lanoling ano pcr-
mitting prollcms, lut tlc applications cacl lavc
tlcir own claractcristics.
CemenI Kilns. TDI usc at ccmcnt kilns prcscnts a
numlcr ol aovantagcs. Tlcsc kilns opcratc at vcry
ligl tcmpcraturcs, kccping cxlaust gasscs in tlc
lurning zonc lor long pcrioos ol timc. Tlc ligl
opcrating tcmpcraturcs causc complctc oxioation ol
tlc stccl in tlc tirc slrcos, ano tlc stccl contcnt
proviocs supplcmcntal iron, a rcquircmcnt ol tlc
ccmcnt proccss. Sincc tlc Btu valuc ol TDI is usu-
ally liglcr tlan coal, ano tlc nitrogcn, sullur, ano
asl contcnt is lowcr, it woulo sccm tlat TDI is an
iocal lucl lor tlis purposc. Howcvcr, tlcrc arc scvcr-
al larricrs to its usc.
TDI`s cost aovantagc ovcr coal is marginal. Kilns
tlat lurn wlolc tircs lavc a grcatcr aovantagc.
Iitlcr systcm rcquircs plant mooilications. In aooi-
tion, mooilications to air cmissions pcrmits arc
rcquirco, ano tlcsc can lc timc consuming ano
costly to oltain. To makc tlcsc costs lcarallc, tlcrc
must lc a rcliallc supply ol TDI or wlolc tircs. Tlis
rclialility can only lc assurco wlcn tlc tirc rccy-
cling supply clain is morc liglly ocvclopco.
Fapei Mills. Iulp ano papcr mills gcncratc largc
amounts ol wooo scrap in tlc proouction ol clips lor
tlc pulp oigcstcr. Tlis wastc is gcncrally lurnco in a
log loilcr wlicl gcncratcs proccss stcam.
Howcvcr, in orocr to lurn tlc wastc wooo ano main-
tain rcliallc loilcr pcrlormancc, supplcmcntal lucl is
rcquirco. Dcwirco TDI is vcry pricc compctitivc witl
coal lor tlis application. It proviocs consistcntly ligl
Btu contcnt witl unilormly low moisturc contcnt. It
oocs rcquirc spccial lanoling cquipmcnt ano cnvi-
ronmcntal pcrmits, lut tlcsc prollcms lavc not
provcn insurmountallc. As ol 1992, pulp ano papcr
mills wcrc consuming 11 million tircs pcr ycar.
\IiliIies. Utilitics lccamc involvco witl tirc lurn-
ing altcr tlc ccmcnt ano papcr inoustrics. Tlc cco-
nomics arc not as lavorallc, ano tlc issuc ol rclia-
lility ol supply is ol utmost conccrn. Ovcr tlc last
occaoc, utilitics ano inocpcnocnt cncrgy proouccrs
lavc cxpcrimcntco witl mixing TDI witl coal at
ocoicatco tirc to cncrgy plants. Vlilc rcports ol
linancial pcrlormancc arc nominally lavorallc,
wiocsprcao aooption ol TDI lor powcr gcncration
las not occurrco.
Faving. Iollowing tlc passagc ol tlc Intcrmooal
Surlacc Transportation Illicicncy Act in 1991,
intcrcst in tlc usc ol olo tircs in paving incrcasco
slarply. Tlc act rcquircs statcs to usc cruml rullcr
in pcrccnt ol tlcir asplalt tonnagc laio in 1991.
Tlc pcrccntagc must risc to 10 pcrccnt in 199, 1
pcrccnt in 1996, ano 20 pcrccnt in 199 ano suc-
cccoing ycars.
21
Vlilc implcmcntation ol tlis act
las lccn oclayco ly protcsts lrom tlc Amcrican
4 C0RP0RATE ElVlR0lNElTAL STRATE0Y
V5l2 KEllETh C. 0wEl
Association ol Statc Higlway ano Transportation
Ollicials ano tlc National Asplalt Iavcmcnt
Association, among otlcrs, stuoy ol tlc potcntial
lcnclits ol tircs in pavcmcnt ano proccsscs to rcal-
izc tlosc lcnclits lavc procccoco. Two major tccl-
nologics lavc cmcrgco: asplalt rullcr, ano rullcr
mooilico asplalt concrctc (IUMAC). Asplalt rul-
lcr rclcrs to tlc various mctloos lor incorporating
cruml rullcr mooilicr (CIM) into lot mix asplalt
(HMA) ouring manulacturc. IUMAC rclcrs to tlc
usc ol tirc clips in placc ol, or in aooition to, otlcr
aggrcgatcs in tlc linal asplalt mix. Botl proccsscs
claim usclul lilc up to ooullc oroinary asplalt, lut
at rouglly twicc tlc initial cost. Duc to tlc ois-
counting ol luturc costs, tlcsc proccsscs appcar to
lc morc costly tlan traoitional asplalt mixcs. It also
rcmains to lc octcrminco wlctlcr asplalt rullcr or
IUMAC can lc rccyclco as traoitional asplalt can.
Irovioco tlat tlc cost ano rccycling issucs can lc
ovcrcomc, potcntial usc ol olo tircs lor paving coulo
cxccco tlc supply. Howcvcr, il liglcr margin uscs
lor rccyclco cruml rullcr can lc iocntilico, prcs-
surc to kccp rullcr out ol pavcmcnt woulo comc
not only lrom paving groups ano municipalitics, lut
lrom rccyclcrs as wcll.
Thc Modcl
Tlc valuc aooco in proccssing will ultimatcly
octcrminc tlc vialility ol any rccycling cllort.
22
Accoroing to Cyclctccl Ircsiocnt, Davio Cuioo,
Vlcn tlis typc ol rccycling lccomcs cstallislco,
wc arc prcparco to pay up to $20 pcr ton lor scrap
tircs instcao ol collccting tlc $0 a ton tipping lcc
wc gct lrom tirc collcctors now to takc tlc matcrial
oll tlcir lanos.
Tlc collcction ol proccss costs las provcn oilli-
cult. Iroccssors guaro tlcir costs, consiocring tlcm
to lc liglly scnsitivc proprictary oata. Iquipmcnt
manulacturcrs lavc provcn similarly scnsitivc to tlc
rclcasc ol oata. Tlcrclorc, tlc costs slown lcrc arc
an aggrcgation ol proprictary oata rcccivco unocr
non-oisclosurc rcquircmcnts ano projcctions lasco
on yiclo curvcs ano cost rclationslips provioco ly
cquipmcnt supplicrs. ;scc Ixlilits , 1, cnd )
Tlcsc clarts makc cviocnt tlat tlc proccss cost
lor prooucing lincr ano lincr graocs ol cruml incrcas-
cs lastcr tlan tlc currcnt markct priccs lor rccyclco
C0RP0RATE ElVlR0lNElTAL STRATE0Y 47
A PRlCll0 STRATE0Y l0R A RECYCLll0 lluSTRY V5l2
199 Crumb Rubbcr
Priccs by Gradc
l3
$-
$0.050
$0.100
$0.150
$0.200
$0.250
$0.300
$0.350
$0.400
80
Mesh
40
Mesh
20
Mesh
10
Mesh
1/4"
$/ Pound
100
Mesh
80
Mesh
40
Mesh
20
Mesh
10
Mesh
1/4" 100
Mesh
Rubber
Fluff
Grade
2"
Shred
L\nibit
Proccss Cost Estimatcs
l4
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
Grade
80
Mesh
40
Mesh
20
Mesh
10
Mesh
1/4" 100
Mesh
Rubber
Fluff
2"
Shred
L\nibit
Original Margin Estimatcs
100
Mesh
-$0.25
-$0.20
-$0.15
-$0.10
-$0.05
$0.00
$0.05
$0.10
Grade
80
Mesh
40
Mesh
20
Mesh
10
Mesh
1/ 4" Rubber
Fluff
2"
Shred
L\nibit
rullcr, suggcsting tlat tlc grcatcst margins can lc
aclicvco witl rclativcly coarsc graocs (1 to 10 mcsl).
Howcvcr, currcnt markct priccs oo not rcllcct
potcntial markct priccs. Tlc lack ol unilorm qual-
ity stanoaros ano continuity ol supply lotl scrvc to
oiscount markct priccs. As ASTM stanoaros arc
linalizco ano linc grino cruml lccomcs morc uni-
lorm ano plcntilul, priccs sloulo improvc.
Iurtlcrmorc, tlc morc aovancco, ano potcntially
prolitallc applications sucl as tirc manulacturing,
arc currcntly cxamining tlc usc ol 10 to 0 mcsl
cruml citlcr oclinkco or surlacc trcatco in placc ol
tlc lincr mcsl matcrials. Tlcrclorc, to juogc tlc
availallc opportunitics, a moocl is rcquirco to
valuc rccyclco cruml lasco on tlc stanoaro cost ol
tlc matcrial it rcplaccs. ;scc Ixlilit 6, bc|ou)
Using tlc ingrcoicnt priccs pullislco in tlc
Marcl 199 issuc ol Rubbcr Wor|d magazinc in con-
junction witl tlc rccipcs lor tlc rullcr compounos
lor tlc prooucts unocr consiocration, as ocscrilco
in tlc 1996 Vcndcrbi|t Hcndbool, stanoaro costs arc
calculatco. Iacl proouct is tlcn assignco an
acccptallc rccyclco contcnt pcrccntagc ano an
acccptallc pricc limit is calculatco. As statco
alovc, tlc rangc ol acccptallc pricing is wioc, rang-
ing lrom 0 pcrccnt ol virgin cost to as ligl as 100
pcrccnt. Tlc proccss cost lor tlc appropriatc graoc
ol rccyclco matcrial is sultractco lrom tlc acccpt-
allc pricc limit to inoicatc tlc potcntial gross mar-
gin availallc pcr pouno ol matcrial lor cacl proo-
uct. Tlis is prcscntco as a rcvision ol tlc margin
clart, slowing low tlcsc prooucts lavc allcctco
tlc margin curvc.
In a octcrminatc markct, wlcrc tlc supply ol
cruml rullcr lar cxcccos tlc potcntial lor a givcn
proouct, it woulo makc scnsc to multiply tlc gross
margin pcr pouno timcs tlc availallc markct vol-
umc lor tlc proouct to slow total potcntial.
Howcvcr, in tlc casc ol all tlrcc applications sclcct-
co lcrc, tlc potcntial markct lor cacl proouct coulo
consumc morc rccyclco cruml rullcr tlan tlc
scrap tirc markct can supply. Tlcrclorc tlc occision
to pursuc any ol tlcm is octcrminco ly lcasilility
ano margin pcr pouno.
Starting witl tlc lowcst graoc matcrial usc, wc
can look at tirc ocrivco lucl (TDI). Usually ocliv-
crco as 2`` or 1`` slrco, TDI rcquircs littlc proccss-
ing, lut must compctc witl coal on pricc. Ior most
applications, a stcaoy supply ol TDI must lc avail-
allc in orocr to justily ncccssary mooilications to
matcrial lanoling cquipmcnt. Tlcrclorc tlc pricc ol
coal lccomcs a limiting lactor ano ligl volumc con-
tracts a ncccssity. Tlcsc paramctcrs arc wcll cstal-
lislco in tlc currcnt markct, ano arc unlikcly to
clangc oramatically in tlc ncar luturc. Irom our
oata alovc, tlc markct pricc lor 2`` slrco is 1.22
ccnts pcr pouno, tlc cost is 1 ccnt pcr pouno, yiclo-
ing a margin ol 0.22 ccnts pcr pouno.
Iullcr Mooilico Asplalt (IMA) appcarco to lc
a oominant usc lor rccyclco tircs lollowing tlc pas-
sagc ol tlc 1991 Intcrmooal Surlacc Transportation
Illicicncy Act. Howcvcr, as oiscussco alovc, pricc
consiocrations ano inoustry opposition slowco implc-
mcntation ano in 199, Congrcss climinatco tlc
lunoing lor cnlorccmcnt ano aoministration.
Tlcrclorc, IMA is only going alcao wlcrc it can
stano on its own mcrit, witlout govcrnmcnt manoatc
or lunoing. Howcvcr, sincc IMA is inlcrcntly morc
costly tlan tlc asplalt it rcplaccs, tlcrc is consistcnt
oownwaro prcssurc on tlc pricc ol tlc cruml rullcr
usco. In lact, tlc National Asplalt Iaving Association
looks at tlc aooitional pricc ol IMA in tcrms ol tlc
cost to oisposc ol cacl tirc ($ to $10), ratlcr tlan
tlc valuc ol tlc matcrial.
2
Tlcrclorc, lor tlis moocl,
a cost ($0.1/ll.) ano sclling pricc lasco on tlc cur-
rcnt markct ($0.162/ll.) intcrpolatco lctwccn tlc
20 mcsl ano 10 mcsl ligurcs can lc usco. Tlis yiclos
a margin lor IMA ol $0.022/ll.
48 C0RP0RATE ElVlR0lNElTAL STRATE0Y
V5l2 KEllETh C. 0wEl
Margin Calculation Ior Each Product
L\nibit o
Stcndcrd Cost
Accctcb|c
Rc|cccmcnt
lcrccntcgc
lroduction Cost
lroccss Cncngc
A||oucncc
lotcntic| Mcrgin x = x
Ncxt comcs tlc consiocration ol tirc componcnts.
Two lasic approaclcs can lc takcn lcrc. Iccyclco
cruml can lc usco citlcr as a oircct rcplaccmcnt lor
carlon llack or natural or syntlctic rullcr, or it can
lc usco as a lillcr, oisplacing all otlcr componcnts ol
tlc matcrial mix up to a givcn pcrccntagc. In tlis
moocl, tlc sccono approacl is usco. Tlc acccptallc
pricc lor cruml rullcr in tirc componcnts will lc
consiocrco cqual to tlc pricc ol tlc matcrial it
rcplaccs lcss an allowancc lor tlc cost ol proccss
clangcs. Tlc pricc cquity assumption is lasco on tlc
asscrtion ly Clarcncc Hcrmann, Vicc Ircsiocnt ol
Iroouct Inginccring at Miclclin, tlat incorporating
rccyclco matcrial sloulo lc cost ncutral. Hc also
statco tlat, Tlc rccyclco rullcr will lc in all ol tlc
tirc`s componcnts, tlc siocwall ano tlc trcao, lor
cxamplc, ano tlc rcplaccmcnt lactor will actually lc
a lit morc tlan 10 pcrccnt.Vc rcquirc a matcrial
tlat`s lincr tlan 20 mcsl. Tlc proccss clangc
allowancc is arlitrarily sct at 1 pcrccnt. Tlc actual
allowancc lor any cno uscr woulo lc lasco on an
appropriatc amortization sclcoulc ol actual proccss
clangc costs. Tlc lollowing pricing is lasco on tlc
Vcndcrbi|t Hcndbool rccipcs ano Rubbcr Wor|d com-
poncnt priccs. ;scc Ixlilit , cbo:c)
Tlc valuc ol tlc matcrial as calculatco lcrc
rangcs lrom lour to livc timcs tlc compositc cur-
rcnt markct pricc lor 0 mcsl matcrial ano up to
twicc tlc markct pricc lor 100 mcsl matcrial in
L\nibit S.
By calculating tlc matcrial valuc lor aooitional
prooucts wlicl makc usc ol otlcr graocs ol cruml,
a morc complctc compositc curvc ocpicting tlc
optimum margin lor cacl graoc can lc oltainco.
Ncw prooucts can lc juogco against tlc curvc to
octcrminc tlcir ocsiralility. Irooucts wlicl
improvc on tlc margin curvc at any graoc point
lccomc tlc ncw lcnclmarks lor latcr prooucts.
Using tlis pricing moocl, tlc graocs witl tlc most
potcntial arc 20 to 10 mcsl.
Opportunitics & Risks
All ol tlcsc calculations arc lasco on tlc usc ol
untrcatco rccyclco cruml rullcr. Surlacc trcatco or
ocvulcanizco cruml, as mcntionco alovc, coulo pro-
vioc aooitional opportunitics, citlcr lor tlc usc ol
coarscr grinos at liglcr priccs or lor cxpanoco markct
potcntial ouc to tlcir suitalility lor usc in liglcr pcr-
ccntagcs. As tlc markct ocvclops, tlcsc proccsscs will
in all likclilooo lccomc cmlcooco in tlc stanoaros
lor somc ol tlc liglcr graocs ol matcrial. In tlc slort
tcrm, tlc grcatcst opportunitics lor ligl valuc cruml
rullcr markcts lic in joint or coopcrativc vcnturcs
witl major potcntial uscrs, sucl as tirc manulacturcrs
ano plastics compounocrs, to prooucc ligl graoc
matcrials at a stallc cost wlicl mccts tlc varico
ocsign rcquircmcnts ano lusincss nccos ol original
cquipmcnt manulacturcrs ano cno uscrs.
Rccommcndations
To rcalizc tlc liglcr potcntial valuc in prooucts
sucl as tircs, rccyclcrs must movc as rapioly as pos-
C0RP0RATE ElVlR0lNElTAL STRATE0Y 49
A PRlCll0 STRATE0Y l0R A RECYCLll0 lluSTRY V5l2
Potcntial Margin Ior Crumb
Rubbcr Hscd in Ncv Tirc
Componcnts
Passangar
0ar T|ra
0omponanI
Traad
8|daWa||
Apax
8aad
Innar L|nar
P|ys
w|ra 8a|I 0oaI
0arcass
0ompos|Ia
V|rg|n
0omponanI
0osI/|b.
$ O.74O9
$ O.745
$ O.589
$ O.82
$ O.571
$ O.515
$ O.O95
$ O.489
Narg|n
AIIar
Procass
0osI
A||oWanca
O.51
O.521492
O.885798
O.47O198
O.87572
O.84228
O.4O5O14
O.48428
30 Nash
0rumb
Procass
0osI
$ O.188O
$ O.188O
$ O.188O
$ O.188O
$ O.188O
$ O.188O
$ O.188O
$ O.188O
PoIanI|a|
Narg|n
$ O.O78
$ O.185
$ O.4589
$ O.5582
$ O.448O
$ O.4285
$ O.475
$ O.51O9
L\nibit
Rcviscd Margin Estimatcs
100
Mesh
-$0.15
-$0.10
-$0.05
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
Grade
80
Mesh
40
Mesh
20
Mesh
10
Mesh
1/ 4" Rubber
Fluff
2"
Shred
L\nibit S
sillc towaro a commooity markct lor cruml rullcr.
As long as no two supplicrs can or oo provioc iocn-
tical matcrial, manulacturcrs will lc wary ol plans to
incorporatc cruml rullcr in any mcaninglul quan-
tity in tlcir proccsscs. As tlc markct is currcntly
structurco, cacl rccyclcr is, lor all practical purpos-
cs, markcting a proprictary proouct wlicl rcquircs
customcrs to lc totally ocpcnocnt on a singlc sup-
plicr lor matcrial. Vlilc tlis can lc an acccptallc
arrangcmcnt, it is rcstrictivc cnougl to stymic largc-
scalc markct ocvclopmcnt.
Tlc lact tlat all pullicly quotco commooity
priccs lor cruml rullcr as ol tlis writing arc spcci-
lico as =1, inoicatcs tlat truc stanoaros lavc yct to
lc aclicvco. Still, tlc currcnt movcmcnt towaro
ASTM stanoaros ano tlc acccptancc ol cruml rul-
lcr on commooitics markcts sloulo scrvc to orivc
tlis markct rapioly ovcr tlc ncxt lcw ycars.
Endnotcs
1. Tlc occision to implcmcnt any rccycling mctloo
must incluoc an cvaluation ol tlc rcquirco capital
invcstmcnt, optimal plant sizc, utilization ratcs, ano
acccss to a consistcnt supply ol raw matcrial. Tlcsc
clcmcnts arc lcyono tlc scopc ol tlis moocl.
2. Stanoaro Ioor`s, 1/19/9.
. U.S. Dcpartmcnt ol Commcrcc: Burcau ol Ccnsus,
Intcrnational Traoc Aoministration.
1. Iciscl, M. Iullcr consumption is rising, lut pro-
ouccrs` prolits arc squcczco, Cncmicc| C Lnginccring
^cus, Vol. No. , August 11, 199, pp. 11-11.
. IV Inoustrics, Inc. Markcts lor cruml rullcr,
lttp://www.rwinoustrics.com.
6. Iosc, I. Tyrc rccycling comcs ol agc in Nortl
Amcrica, Rubbcr Trcnds, Summcr 199, pp. 1 ll (9).
. Clar is a llack rcsiouc tlat can lc rccyclco as low
quality lillcr.
S. Klingcnsmitl, V. Iccycling, proouction, ano usc ol
rcproccssco rullcrs, Rubbcr Wor|d, Vol. 20 No. 6,
Marcl 1991, pp. 16-21.
9. Stcutcvillc, I. Iuncturing tlc scrap tirc program,
ioC,c|c, Vol. 6 No. 10, Octolcr 199, pp. 1-2.
10. Id.
11. Blumcntlal, M. Tircs, Rcc,c|ing Hcndbool,
McCraw Hill.
12. Icsus, M. Igglcton, I. Iccycling Iullcr Irooucts
Scnsilly, Rubbcr Wor|d, Vol. 20 No. 6, Marcl 1991,
pp. 2-2.
1. Samoani, C. Clcmical trcatmcnt ocvulcanizcs rul-
lcr crumls lor rccycling, Cncmicc| Lnginccring, Vol.
102 No. 11, Novcmlcr 199, pp. 1-19.
11. Iosc, I. surc notc 6.
1. Id.
16. Lcyocn, }. Cryogcnic proccssing ano rccycling,
Rubbcr Wor|d, Vol. 20 No. 6, Marcl 1991, pp. 2S-29.
1. Invironmcntal Irotcction Agcncy Markcts lor Scrap
Tircs, IIA/0-SV-90-01B, Scptcmlcr 1991.
1S. Augcnstcin, D. Disposal ol Scrap Tircs, l|cct
Luimcnt, May 199, pp. 12-1.
19. Orcgon Dcpt. ol Invironmcntal _uality, 10-61-00.
20. Tcsla, M. Scrap tirc proccss turns wastc into lucl,
loucr Lnginccring, May 1991, pp. 1-11.
21. Iclniowski, T. Noiscs in tlc Housc ovcr rullcr in tlc
roao, L^R, Vol. 20 No. 21, May 21, 199, pp. 21-2.
22. Tlc lirst stagc ol tlc moocl looks at currcnt margins
lor rccyclco cruml rullcr ly graoc. By taking currcnt
markct priccs lor various graocs ol rccyclco matcrial,
ano sultracting proccss costs, wc can gcncratc a clart
illustrating gross margin pcr pouno altcr proccss cost.
In tlis calculation, ano in tlosc tlat lollow, tlc cost ol
collcction is ignorco, sincc it is rclatco to tircs in gcn-
cral ano its inllucncc on prolitalility is tlc samc pcr
pouno ol matcrial, rcgarolcss ol graoc.
2. Comositc. !99o Scrc Tirc Iscrs Oircctor, cnd
Rcc,c|cr`s Wor|d /1/96.
21. Aggrcgatco proprictary oata lrom proccssors cquip-
mcnt manulacturcrs.
2. Huglcs, C. Scrc Tirc Iti|i:ction Tccnno|ogics,
National Asplalt Iavcmcnt Association, Inlormation
Scrics 116, 2/9.
5O C0RP0RATE ElVlR0lNElTAL STRATE0Y
V5l2 KEllETh C. 0wEl