WASHINGTON—Much like a baby learning motor skills, the scrap tire recycling industry has made progress in some markets, and had setbacks in others. Yet, despite some recent stumbling, it appears the industry has finally emerged from infancy and has now entered the ``terrible twos'' stage. That's the metaphoric analysis of Michael Blumenthal, executive director of the Scrap Tire Management Council, which for the past six years has served as the Rubber Manufacturers Association's non-profit advocate for tire recycling.
The market, he said, ``is now on solid food and is starting to walk on its own. There has clearly been tremendous progress in the industry,'' Mr. Blumenthal said.
But like toddlers learning to walk, the scrap tire market fell on its face last year due to the much-publicized ``burning roads'' in which shredded rubber used in two road construction projects in Washington state ignited and smoked until crews tore up the roads and extinguished the burning rubber. The incidents prompted officials in a number of states to put similar road projects on indefinite hold.
Mr. Blumenthal admitted the incidents had a ``major negative impact'' on the tire recycling market last year, but he expects that end-market to bounce back by next year.
But it will be many years before the tire recycling industry as a whole reaches maturity—evidenced by 100-percent market demand plus effective programs to solve the stockpile issue, according to Mr. Blumenthal. More markets must be developed, and there still needs to be a lot of education—for processors and the public.
Yet this is not an impossible goal, he added.
``There are two very important things on our side,'' he said. The first is that the market has a seven-year track record of trends that gives it ``a lot of credibility.'' The second is the development of a databank of information on recycling processes and applications.
The industry has found success and growth in three end-markets: civil engineering applications, crumb rubber products and tire-derived fuel.
There are an estimated 300 to 350 tire processors in the U.S., up from about 275 a few years ago. But the market also has produced bigger players as smaller ones are weeded out or combined, especially in the ground rubber area.
1996 saw two consolidations of major tire/rubber processors: National Rubber Co. Inc. of Toronto, which makes recycled rubber parts for the automotive industry, bought Baker Rubber Inc. of South Bend, Ind., the largest U.S. producer of crumb rubber; and Waste Recovery Inc. of Dallas, the largest U.S. producer of tire-derived fuel, bought U.S. Tire Recycling Partners L.P. in Concord, N.C., a large tire collection and processing operation in the Southeast.
Mr. Blumenthal said current trends in the scrap tire industry present ``a real clear parallel'' to what happened in the solid waste industry 20 years ago. ``I think we will see a parallel in that industry and ours of consolidation.''
But unlike the solid waste industry, don't expect national tire recycling operations to emerge, he said. The scrap tire market is too regionalized, and geographic areas, too distinct. And ``there is only so far you can transport tires.''
A possible exception is Waste Recovery, which has plants and collection operations in the Southeast, the Midwest, Southwest and Pacific Northwest, yet each facility is in a distinct geographic area, Mr. Blumenthal said, and are independently run operations.
Generally, the industry can expect small operations to consolidate, and the STMC has been seeing more consolidations, but at the local/regional level, he said.
The future appears promising for the scrap tire market, but what of the new-tire dealers' dream of haulers actually paying them to take their scrapped tires?
That may never become reality, but ``it is reasonable to expect a reduction in tipping fees,'' according to Mr. Blumenthal. That, he said, is a clear indication of market success, and already there are areas of the country where market competition has resulted in lower tipping fees.