Bureaucracy hampers tire recycling in Russia

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Given palpable growth of demand for rubber granules in Moscow Oblast this year, a tire recycling company Neva Secondary Materials (Nevavtorsyrie), now pursues expansion of its operational capacity, planning to process around 36,000 metric tons of tires annually, instead of 2,500 metric tons, revealed the firm’s CEO, Sergey Larin. The firm is based in St. Petersburg and operates one of the biggest tire recycling facilities in North-West federal district of Russia.

Sergey Larin said that the installation of the new production line was almost completed, therefore the expansion of the capacity is expected to be achieved approximately in the beginning of the second half of 2017.

According to a Russian source, Delovoi Peterburg, which uses its own data, RUB 150 million (USD 2.5 million) are estimated to be spent to upgrade the facility; the turnover of the plant is expected to be RUB 540 million (USD 9 million).

The recently signed large-scale contract, which involves the firm and the number of Moscow-based businesses that operate in road construction sector, allowed expanding the plant, said Larin. The company’s CEO also stated that the agreement will let Neva Secondary Materials sell as much as 30,000 metric tons of crumb rubber annually, thus the marketing won’t encounter any obstacles.

However, Delovoi Peterburg – drawing on information available in the industry – expressed some pessimism telling that the retail of the finished merchandise can still be the key challenge for the majority of the market players.

According to some incognito sources, in the biggest part of Russia, crumb rubber is seen as promising feedstock for road construction, and every time contractors are required to get an authorization for its use.

The solution for this obstacle was found by one of Moscow’s construction companies, but the problem still exists in all other parts of Russia, including St Petersburg, where construction companies do not work with rubber granules. The bureaucracy has led to severe deterioration in the industry across the region. Moreover, in the beginning of 2017, the number of recycling plants close to St Petersburg shrank from 15 to 4.

Approximately 35,000 metric tons of end-of-life tires arise annually in the city and the region, according to the information provided by St. Petersburg’s City Hall. However, only 10% of this amount is recycled.

No collecting points for tires exist in the region. However, tire producers and importers are obliged, according to the environmental regulations, to ensure proper tire disposal on their own. As a result, the facilities operating in St. Petersburg accept used tires, which they process on a gate fee basis, meaning that they have to pay for them.

The latest data show that the disposal of truck and passenger tires will cost USD 50 per metric ton, and USD 70 will be charged for disposal of one metric ton of OTR tires.

Given that Neva Secondary Materials targets to become the first facility accepting end-of-life tires free of charge, it is believed that the company will possess a significant competitive advantage, Sergey Larin assumes.

A number of the biggest transportation companies based in the region have assured that they would provide the materials for the new recycling facility. Moreover, Anatoly Yazov, director general of the transport firm Autopark SpecTrans, made a prediction that Neva Secondary Materials will be able to collect 100,000 used tires annually, if it drops the gate fee.

Article source: Tyre and Rubber Recycling

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