KITCHENER, Ontario (March 25, 2014) — Green Arc Tire Manufacturing Inc., a passenger tire retreading start-up still in the process of setting up a plant in St. Marys, Ontario, has struck a deal with rubber compounding specialist AirBoss of America Corp. for the supply of up to 24 million pounds of rubber annually.
“This is a local partnership with tremendous benefits,” said John Tomins, vice president of sales and marketing at AirBoss at a ceremony March 24 at AirBoss’s plant in Kitchener. “Our companies are combining innovative technologies to create local jobs, improve the environment and help the economy.”
Green Arc Tire is a five-month old company started by Mike DiCenzo, a Canadian with more than 30 years’ experience in the used tire, casings and recycling industries, with financial backing from Phoenix Capital Partners, a Toronto venture capital firm, and Bancorp Financial Services Inc., a Vancouver mortgage fund management firm.
Mr. DiCenzo, CEO and COO of Green Arc Tire, put the investment last November to start Green Arc Tire at $37 million (Canadian), with production of 3 million passenger, light truck and SUV tires — predominantly winter specification — a year projected at the new plant. The operation is being assembled inside a 400,000-sq.-ft. vacant building that used to house a Dana Corp. truck chassis plant.
Mr. DiCenzo originally had hoped to be in production by March, but now says production should start around May 1, owing to longer-than-anticipated permitting process.
“The time is proper to do this,” he said in an interview with Tire Business, noting Quebec’s mandatory winter tire law and growing sentiment in other provinces toward similar measures.
AirBoss, one of North America’s largest rubber compounders, expects the volume agreed to in this deal will create sufficient work to support 20 new jobs, according to Steve Barefoot, Kitchener plant manager at AirBoss.
“We’re delighted to be working with a company that shares our commitment to the community and the environment,” Mr. DiCenzo said at the March 24 event. “Together we’re producing new tires in a process that gives used tires a second life. It’s a process that’s far more practical, efficient and green than tire recycling will ever be.”
Financial terms of the deal were not disclosed. Retreading already accounts for about 8 percent of AirBoss's annual sales, or roughly $20 million.
Green Arc expects production at St. Marys to start with about 340 employees, a total that could grow to more than 1,000 at full production. Mr. DiCenzo said production is slated to ramp up in stages.
The company is in the process of installing the first 60 of what eventually will be 269 tire curing presses, sourced from Italy’s Marangoni S.p.A., Mr. DiCenzo said, and already has interviewed more than 1,700 candidates for the jobs at the plant.
The plant will need so many presses because of the increasing complexity of tire sizing, the entrepreneur said. Israel’s Pelmar Engineering Ltd. has consulted on the plant’s engineering, he added.
The tires, to be sold under the Green Arc brand, will all be bead-to-bead products, he added, with an emphasis on 17-, 18- and 19-inch sizes.
Mr. DiCenzo said he has a dozen decent-sized distributors — including at least one in the U.S. — committed to take the plant’s product and distribute it.
Green Arc secured the vacant Dana plant last year at undisclosed terms. Mr. DiCenzo said Green Arc is not receiving any subsidies or tax breaks from St. Marys or Ontario for the plant.
Mr. DiCenzo said considering his background in used tires and casing brokering — he’s also listed as an officer with Evergreen Resource Recovery, according to his LinkedIn page — Green Arc has secured an adequate supply of casings through more than two dozen brokers, “and I’m getting more calls each day with offers” of casings.
Green Arc said it expects to generate $100 million in revenue annually at full capacity, which would value each tire at about $30 to $35. The company claims its eco tires will exhibit equal performance and life of regular tires, at 30- to 50-percent less cost.
Ontario Environment Minister Jim Bradley offered his congratulations to Green Arc last November “for investing in Ontario’s growing recycling industry, putting hundreds of people to work, and producing hundreds of thousands of remolded tires a year.”
Green Arc intends to reserve about a fourth of the jobs at the plant for veterans of the Canadian armed forces.
Mr. DiCenzo said he has assembled a team of industry veterans to help with the launch, including: Murill Metl of Brazil; Len Lottridge of Prema Canada and other recycling ventures; Ed Verby, formerly with Uniroyal Canada; and others.
On a related matter, Green Arc said the Ontario Safety League, a non-profit traffic safety advovacy group, plans to undertake a consumer education program in the coming months to explain the virtues of winter tires.
This is not Mr. DiCenzo’s first attempt to put together a retreading/recycling venture. In 2010 he was part of a project called Evergreen Resource Recovery that pitched the idea of a retread plant and waste tire recycling facility to be set up in Hamilton, Ontario.
That project, reportedly with the involvement of a Ukranian waste recovery/recycling company called Coral Group, never got beyond the planning stages, Mr. DiCenzo said, because of concerns about the environmental aspects of waste tire recycling.
What is the best business practice?
|Treating your customers fairly.||
67% (36 votes)
|Offering the lowest price possible.||
2% (1 votes)
|Doing the job well, as quickly as possible.||
22% (12 votes)
|Staying ahead of technology.||
4% (2 votes)
|Be heavily involved in the community.||
6% (3 votes)
|Total votes: 54|