-An expansion-minded New Jersey tire recycler has come to the rescue of a financially strapped California firm by leasing its Los Angeles crumb rubber facility.
Recovery Technologies Group Inc. has been operating the L.A. plant of Rubber Technology International Inc. on an interim basis since Feb. 26, according to RTG President Marty Sergi.
The arrangement will become permanent as soon as the necessary permits are approved, which should happen by early June, Mr. Sergi said.
RTG needed a base of operations for the vitally important southwestern market, according to Mr. Sergi. Meanwhile, an RTI release said the lease agreement eliminates almost all of its overhead while providing the Los Angeles-based company with a steady stream of income.
``We've been working together for four or five months,'' Mr. Sergi said. ``We've worked very well together, and we got their production up substantially.''
According to the RTI release, the California firm decided to lease its crumb rubber facility after months of exploring both a restructuring of its finances and possible offers of acquisition.
``The company's attempt to develop alternative financing options to cover its cash shortfall, which resulted from last year's order cancellations and postponements, were not successful,'' the release stated.
The last press release on RTI's Web site before the leasing arrangement with RTG said the company experienced a nearly 389-percent increase in gross revenues in July 2001, to more than $440,000.
Officials of RTI could not be reached for comment.
RTG continues to supply the asphalt rubber market from the Los Angeles facility, a major market for RTI. But it also is moving the plant's production to customers in the field and playground surfacing area, which is a much bigger market for RTG than asphalt rubber, Mr. Sergi said.
Based in Guttenberg, N.J., RTG is a major player in the tire collection and recycling industries.
It has major tire collection contracts with such firms as Bridgestone/Firestone and Wal-Mart Inc.
Last year, the company made headlines when it won a contract from Ford Motor Co. to recycle as many as 13 million Firestone tires the auto maker recalled from Ford owners.
RTG has facilities and operations all over North America, including New Jersey, Maine, Texas, Illinois, Georgia, Pennsylvania, Saskatchewan, Ontario and Nova Scotia.
Its most recent acquisition was the former Santee River Rubber L.L.C. facility in Moncks Corner, S.C., a 90,000-sq.-ft. cryogenic tire grinding plant that declared bankruptcy in October 2000.
RTG purchased the plant March 1 and expects to have it operating by July 15, according to Mr. Sergi.