GRANVILLE, Ohio-The road to success-and, dare it be said, profitability-could well be paved with crumb rubber. But many a company has aspired to greatness, only to find itself cast along the shoulder.
A 3-year-old company in Granville is attempting to beat the odds and set up crumb rubber production facilities nationwide. But it also hopes to parlay that business into ventures that eventually could go beyond asphalt paving material and into passenger and light truck tire retreading, and maybe even the manufacture of molded products.
That's a lofty objective for ECOPave Inc. which, since its inception in 1992, has produced crumb rubber modifier from scrap tires through a joint venture with Bridgestone/Firestone Inc.
Last July, Tire Business Staff Reported that an unnamed group of investors was planning a substantial investment in an enterprise to make and market bead-to-bead remanufactured tires.
Only recently did one of the principals in that project actually connect the dots, explaining that the retread initiative was part of the overall ECOPave picture.
Attorney Christopher L. Davis is president of the Fairfax, Va.-based Investment Program Association (IPA), a national trade association that raises capital primarily for real estate, equipment leasing and communications ventures.
He is also a director of Tyreplex, a Downingtown, Pa., company that has licensed to ECOPave its proprietary crumb rubber modifier technology. Mr. Davis also has been a primary mover in the bead-to-bead retreading project.
It is expected to be the second phase of ECOPave's business plan, but as of now has been temporarily suspended, Mr. Davis told TIRE BUSINESS, while the company concentrates on generating capital through its modifier business.
ECOPave currently is searching for sites around the country to locate processing facilities, and is op-erating a demonstration-scale plant for product development in Downingtown, a suburb of Philadelphia.
``We're pursuing the first initiative,'' Mr. Davis explained, ``. . . because it will allow us to capture a tire stream, and when you do that, then you have the basis for remanufacturing (tires).''
Financing already is in place for the first phase. However, the company still needs to convince itself that there are ``as close to healthy margins in the bead-to-bead venture as there are in the asphalt modifier business'' before it embarks in that direction, he noted. ``We need to know if the return on capital for that segment is what we want it to be, comparable to other opportunities.''
The third phase of ECOPave's plan is to blend its partially devulcanized crumb rubber with post-consumer plastic to produce feedstock that then can be injection-molded or extruded. Tests are being conducted to validate that material, Mr. Davis reported.
ECOPave has one modifier plant site under consideration, and is looking at setting up two more by year-end.
Optimistically, as the paving modifier market grows, ``every state could eventually justify its own production facility,'' he said. ``Some states are adapting the modification of their asphalt more ahead of other states.''
Today, the crumb-rubber-modified asphalt business is estimated at 200 million to 400 million pounds, Mr. Davis said, and is expected to grow to a billion-pound market by the end of the decade, generating for ECOPave what he hopes will be its ``cash cow.'' Then, ``frankly, it's a self-financing ven-ture to go from that to the second and third phases of our operation.''
The ``surest way to an unhappy experience is to get more initiatives on your plate than you can handle,'' he continued. Nonetheless, a sales and marketing team
Continued from page 9
is in place to organize the retreading endeavor, and has been trying to line up customers in the event that operation gets off the ground-something that could occur in less than two years.
Mr. Davis foresees production beginning at the firm's first fully operational modifier plant by mid-year. ``We're moving very aggressively.''
A full-fledged plant will crank out 20 million pounds of crumb rubber modifier per year, which sells for 35-45 cents per pound. That's the equivalent of 1.2 million-1.3 million passenger tires. (About 250 million scrap tires annually enter the waste stream.)
With recent passage of the National Highway System bill, the climate surrounding asphalt rubber has changed, though whether it is favorable to paving modifier producers is up to interpretation.
States are no longer required to buy ever-increasing amounts of asphalt rubber to keep their federal highway funds. However, the Federal Highway Administration may issue grants to aid states in asphalt rubber research and technology transfer.
Using crumb rubber as a feed-stock is ``extraordinarily cost-competitive against polymers, as far as asphalt modifiers go,'' according to Hugh Marcy, ECOPave's 48-year-old president.
He sees 1997 as the pivotal year for a new federal strategic highway research program, when most states will go to straight performance-based specifications for rubberized asphalt. That, he said, ``gives non-polymer modifiers a level playing field.
``I see materials like ours taking over the asphalt modification business in the future because the styrene-butadiene block of polymers in current vogue as asphalt modifiers have a very volatile pricing history.''
ECOPave's feedstock is price-stable, he pointed out, and ``creates a favorable political climate by using something that otherwise would go into the solid waste stream.''
Working with Bridgestone/Firestone in a shared Akron laboratory, ECOPave has developed some polymer modifiers. Mr. Marcy said, ECOPave eventually will produce those as well as its own ``TP'' (for Tyreplex) modifier.
He does not anticipate selling the TP modifier this year, other than for demonstration projects, and wants ``to get 25 rubberized asphalt test strips down across the U.S.-and I don't care if they're only 100 yards long.'' The company is in the process of negotiating for those now ``with anybody who will listen.''
The company currently is selling its modifier material to several customers such as Polymer Asphalt Products in St. Louis, Kelfer-Sheldon in California, and Texas Fuel & Asphalt.
Mr. Marcy said ECOPave is looking at potential plant sites in Chicago, the San Francisco Bay area, Phoenix and Texas, but admitted ``it all depends on the political climate, and how quickly we can make it happen.''