Weibold Academy: what to consider when launching tire recycling business in developing countries
Month by month, our Weibold Academy series touches different topics from the world of tire recycling and highlights different sides of running this business.
As circular economy concept and tire recycling are becoming more popular all over the world, the first issue that may arise is the need to secure the raw material, namely end-of-life tires (ELT). Normally, tire recycling companies source their feedstock from collection programs or directly from tire stockpiles. Local ELT stockpiles in developing countries eventually may have limited supplies, because if ELT regulations were not in place before, tires may have been simply landfilled or burnt.
Currently, the bulk of tires recycled in OECD countries come straight from tire collection programs, as in many of these countries tire stockpiles are almost eliminated. In developing economies, however, the situation is usually the opposite, and tire stockpiles may be depleted by recycling companies if there is no proper tire collection system in place. Therefore, it is crucial to either establish a central tire collection program regulated by government or launch a private tire collection system. For instance, today India and China are the fastest-growing economies in the world and, assuming fast-paced development of tire recycling businesses there, finding raw materials might become rather challenging, if tire recycling regulations lag behind. Also very often it is still just a case of missing infrastructure to collecting ELT effectively.
In China, which banned ELT imports a long time ago and arduously started implementing collection programs, this issue may not become a major problem due to developing regulations. The situation is somewhat different, but still plausible, in India, as it still imports ELTs from other countries and builds its regulations around this policy. Nevertheless, there are numerous countries all over the world where scrap tire accumulations are significant enough to sustain a multitude of tire recycling businesses and where proper tire recycling regulations still aren’t in place.
For companies and entities who invest in tire recycling businesses, it may be crucial to get long-term contracts with ELT suppliers to keep steadily expanding production and have the solid confidence in the future supplies.
Another challenge is building domestic markets for recycled rubber products. We would like to remind that R&D activities by tire recycling companies and their efforts to substitute recycled rubber, tire pyrolysis oil and recovered carbon black for virgin materials must be supported by tire and rubber industry majors, environmental organizations, universities and, most importantly, governments. And this remains a major prerequisite for success of the whole tire recycling industry.
Most of the markets suitable for recycled tires include multi-billion industries which, when added together, shape a huge market full of opportunities. The biggest challenge for tire recyclers in these markets is to reach these massive industries to offer them innovative solutions, know-how, the best quality and prices. At the same time, tire recycling companies usually collaborate with governments to help implement stable tire collection programs. As a rule, authorities and governmental institutions in OECD countries support tire recycling businesses in their efforts to integrate recycled rubber in circular economy; namely, they help recyclers reach these influential representatives of the industries and design regulations encouraging use of recycled materials in consumer products.
Another aspect which needs to be considered before launching a plant is machinery and production itself. Tire recycling is a capital-intensive business, and companies stay on top of their game if their recycling plants have high throughput capacities and low maintenance costs. The same applies to energy efficiency. Due to the reasons described above, stable supply of feedstock sometimes may be difficult in developing countries.
In our studies we pay close attention to these and other important aspects of launching and running tire recycling business. We thoroughly assess our clients’ situations – taking into account geographic location, feedstock availability, off-take options, regional and international market demand, etc. – and issue step-by-step guidelines how to succeed in the business of tire recycling. Contact us at firstname.lastname@example.org to learn how you can benefit from collaborations with us.