ARDMORE, Okla.-For the past few years Safe Tire Disposal has been collecting and shredding scrap tires from Oklahoma and Texas in preparation for linking up with some major end-users, particularly power generators. The company was founded in 1985 by Scott Holden and his father, Harold. After three years of research, they developed an operation to transport and process scrap tires into shreds and chips for end-users, including companies that burn them as fuel and others that use them in civil engineering applications.
The company has worked under the auspices of the scrap tire programs of Oklahoma and Texas-collecting tires from dealers at no charge, clearing tires from designated illegal tire dumps, and shredding the tires at its five plants-four in Texas; one in Oklahoma.
Once the tires are shredded, the states reimburse the company with money collected from fees on new-tire sales.
While some people object to indiscriminate shredding of tires, Safe Tire said it is eliminating the environmental hazard of whole tires, and besides, the company only gets paid for the tires after they are shredded.
With Texas generating about 20 million scrap tires a year, ``there is no one use to consume that kind of volume overnight,'' Mr. Holden argued. Potential investors and end-users, he added, want visible proof that a processor has a large enough inventory to supply their needs.
Last year Safe Tire generated 120,103 tons of tire shreds and chips. All the chips produced at its Oklahoma facility are gone, said Fred Parker, vice president of marketing, and by next year the company hopes its four Texas facilities will have settled into a balanced inflow/outflow of tires and processed material.
None of the shreds have been landfilled, Mr. Holden added.
Rather, the company sells its chips to end-users who process the material into construction mats, road bed filler, landfill leachate collection systems, as well as fuel chips to fire cement kilns.
Scrap tire markets are growing, Mr. Holden said, but ``it is difficult to find an end use to take the volume the state generates.''
So Safe Tire is eyeing construction of power plants that would consume the tires. ``Energy is the best thing to use the material for,'' he said. The company already is selling some tire-derived fuel (TDF) now. It was a market that took the company a while to open up, since end-users, such as the utilities and cement manufacturers, had to obtain permits to burn alternate fuel.
In 1992, Safe Tire spawned another firm, Recycled Energy Inc., to pursue and develop tire-fueled energy generation projects, as well as others that would consume other alternate fuels.
TDF is the most promising market for tires, added Mr. Parker. The tire recycling market as a whole is evolving. ``The last four to five years have been the birthing process for the industry. Five years from now you won't recognize the industry,'' he said, predicting fewer ``players'' and an emphasis on technological changes and total scrap tire programs.
With many manufacturers considering changing their boiler systems to comply with the federal Clean Air Act, ``This is the ideal time to talk to these companies,'' Mr. Holden said.
But usually these potential end-users want assurances that the processor can provide an up-front and continuous supply of TDF, Mr. Holden said.
So Safe Tire Disposal has been building its tire chip stockpile to a point where it now can supply a 50- to 60-megawatt power plant fueled entirely with tire chips for a year, Mr. Holden said.
The financial groups and end-users ``can now come and see the inventory sit there. . . . It gives them a more comfortable feeling that we can supply their volume,'' Mr. Holden said.
Safe Tire uses a fleet of trailers to collect tires in both states. Unlike the retail market, the tire hauling business is strictly service driven, Mr. Holden said.
Under the Oklahoma and Texas programs, retailers' tires are picked up free of charge. So the processor who arrives at the dealership the quickest gets the tires-and subsequently, the state reimbursement, he said.
Size also is a competitive factor. Mr. Holden said Safe Tire's high volume enables it to process tires for less cost and thus net a higher profit per tire than smaller operators. ``The bottom line is based on the volume you can do,'' he said.
Processors also are driven to find uses for their material, he added, as the cost in tipping fees for disposal of the shredded tires in a landfill ``would wipe out your profit.''
As for expansion, Mr. Holden said the Texas and Oklahoma plants meet the needs of those states, and if the company were to open another plant, it would be in a state that would adopt a scrap tire program similar to that in Oklahoma and Texas.