If one drives around Cairo, an often encounter would be the smell of burning rubber from piles of waste tyres on the sides of the roads. From the annually generated 20 million scrap tyres, only a 10 percent are being recycled, according to the cofounder of Retyres Mahmoud Mohsen.

Less than 10 percent of the 20 million produced waste tires in Egypt is recycled.

Less than 10 percent of the 20 million produced waste tires in Egypt is recycled.

With not many professional tyre recyclers on the market, Mohsen, Abdullah Annan, Mahmoud Abdel Aziz and Saher Nour saw a potential for their startup Retyres. In 2014 when they started out, they were all still attending the Suez Canal University as petroleum-engineering students. They entered a small competition with their idea and started as a small workshop for recycling tyres in their town. According to Mohsen, they were looking for something different, not common yet, which could benefit a problem, along with generating profit. 

They won the competition and then upgraded from manual to mechanical, by establishing four machines, which were locally manufactured.

The idea behind the company: Retyres processes tires into rubber cubes, those are then sold on to factories, which then process them either into powder or into new rubber products, or as alternative fuel to other factories.

Between February and November 2015 while the Suez workshop was running, Mohsen said that the “business was not really good”. They were facing difficulties with the machines, which were extracting the steel from the rubber. This problem was solved in the Cairo workshop by imported machinery.

Steel extraction will not be a problem any more in the new rubber recycling workshop set in Cairo

Steel extraction will not be a problem any more in the new rubber recycling workshop set in Cairo

After winning both the Nahdat El-Mahrousa and the Injaz startup competitions, they brought to the company US$13,500 from each one. Before that they had invested into the startup from family and personal savings almost US$40,000.

With the additional money they got upgraded with two new machines, modified the old ones, included a steel extraction one and moved the business to Cairo. Their expectations are for 175 tons of waste tires to be processed each month.

According to Mohsen the move to Cairo makes things easier for their business with regards to bureaucracy (everything is harder outside the capital), and also there were more people interested in buying processed rubber and more people selling old tires than in Suez.

According to Cleantech Arabia, known as the ‘green’ startup incubator, “tyre recycling is a hot sector” and they are happy to see Retyres in the market, interested in how will they succeed with their business in Cairo. Ahmed Huzayyin from Cleantech Arabia also called them an “amazing” startup.

Since the implementation of new regulations of the Ministry of Environment in Egypt on alternative factory fuels last year, rubber was also allowed to be one and was thus turned into a hot commodity.

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Retyres’ founders (left to right) Mahmoud Mohsen, Abdullah Annan, and Mahmoud AbdelAziz

Currently Retyres are in the late stages of negotiations with a company that wants supply of minimum 500 tons per month, which is something they are not yet able to perform.

Retyres can sell their rubber blocks in Cairo for about US$80 per ton, steel for US$135 per ton, with a combined profit margin of US$45 per ton (vs. the US$13 per ton in Suez).

Their goal, however, is to sell directly, where the startup can achieve prices as high as US$112 per ton for rubber and US$270 per ton for steel.

Retyres has stated that the care for the environment is a very important aspect of their business and that they do not regard the usage of recycled rubber as an alternative fuel, due to the toxicated smoke produced from burning it. Mohsen said: “I prefer to sell my product to people who process it further, but when the Ministry of Environment agrees upon [rubber as alternative fuel], how could I not?”

After winning their first startup competition, the rubber recycling workshop in Suez was upgraded from manual to mechanical

After winning their first startup competition, the rubber recycling workshop in Suez was upgraded from manual to mechanical

What Retyres is in need at the moment is a better supply chain, which would be key to the business, and not their current system of collecting tires from workplaces and junk collectors, which is an unstable, time consuming and unreliable supply of tires.

According to Retyres, an agreement with a large logistics or truck company would help, but since trucks were usually sold at auctions, a bigger company could easily outbid them.

Mohsen is at the moment negotiating with Pepsico regarding direct supply of waste tires, which he believes would be a “game changer” if he manages to land the deal. He hopes that also other companies would follow his example.

Huzzayin said that he believed the startup had a good chance of succeeding with the deal. He also hopes that after a couple of years, Retyres will also start producing its own new products out of recycled rubber, along with its production of recycled rubber cubes. If everything develops successfully, Retyres might be changing in the future of rubber recycling in Egypt.

Article and images source: Wamba.com