Advanced Recycling Sciences Inc., a California company focused on developing technology and markets for scrap tire recycling, is raising money in Germany to build a tire and rubber recycling plant that would showcase its technologies to U.S. and European governments.
ARS contracted in August with securities broker AMEX GmbH in Hamburg, Germany, to raise up to about $2.94 million from German investors.
A full prospectus related to the offering has been filed with the German investor regulatory authority, Bundesanstalt fur Finanzdienstleistungen, ARS said.
The majority of the money raised will go toward building a 30,000-sq.-ft. crumb rubber and recycling plant in Penkun, Mecklenburg-Vorpommern, Germany, through ARS's subsidiary, Poseidon Products GmbH, said Keith Fryer, ARS president and COO.
``Our number one goal is to get the Poseidon crumb rubber and recycling facility off the ground,'' he said.
ARS expects to have financing in place to begin construction on the plant by year-end and to begin preliminary recycling of tires by the second quarter of 2003, he said.
The factory initially will employ 30-40, but that will rise as it increases to three shifts by the end of 2003, Mr. Fryer said. At full capacity, the facility will recycle 3 million tires per year, he said.
The project already has been funded by a $5.88 million grant from the European Union.
The time is ripe for ARS to enter the European market for tire recycling because of legislation and incentives being passed by the EU and European governments trying to stem the proliferation of scrap tires, Mr. Fryer said.
The most notable of these directives is an EU ban on the landfilling of tires in whole or shredded form by 2007, he noted.
ARS is focusing not only on the Poseidon plant, but also on end-market opportunities for the crumb rubber the factory will produce. The company last year received a patent for electrically heated recycled rubber mats, and in August said it completed about seven miles of rubberized asphalt test-road sections it developed in conjunction with German authorities and contractors in Mecklenburg-Vorpommern.
The dense and open-graded sections of road are aimed at demonstrating the value and performance of rubberized asphalt for road building, Mr. Fryer said.
With the U.S. federal budget devoting between $35 billion and $40 billion annually to road-building and a roughly comparable figure being spent in Europe, the potential for the rubberized-asphalt market is huge, Mr. Fryer said.
A street one mile long and 30 feet wide using a 1.5-inch topping would use about 39,000 pounds of crumb rubber in an asphalt mix, ARS estimates. An interstate highway one mile long and 72 feet wide using a 3-inch topping would require 186,000 pounds of crumb rubber in a mix.
Furthering its involvement in the rubber-asphalt mixing market, ARS has contracted to be the exclusive European marketer and distributor of crumb-rubber asphalt mixing equipment manufactured by Albuquerque, N.M.-based CEI Enterprises Inc., Mr. Fryer said.
ARS also markets a complete tire recycling and granulating production system made up of other companies' individual pieces of equipment.
In addition to its focus on crumb-rubber production and sale, ARS is promoting its a proprietary rubber depolymerization technology through its Tires2Oil Inc. subsidiary.
The company began construction of a pilot plant in Anaheim, Calif., in mid-2001 to prove the commercial viability of its Super Critical Fluid technology, but that project has been put on hold until another $500,000 in financing can be secured, Mr. Fryer said. The plant will have a capacity to process 250,000 tires annually, breaking them down into commercially re-usable oil, gas, carbon black, sulfur, zinc and other materials, ARS claimed.
Despite delays in its Tires2Oil project in the U.S., ARS has signed a Memorandum of Understanding with German environmental investment firm Natur-Energie-Wertstoffrecycling Umwelt A.G. to pursue investments for a full-scale Tires2Oil plant to be built in Germany, said Erich Merkle, managing director of N.E.W.
As part of the agreement between the two companies, negotiations are under way for N.E.W. to acquire 5 percent of the Poseidon rubber recycling complex, ARS said. Poseidon's location in Penkun would be an ideal place to build the Tires2Oil plant, Mr. Fryer said.
``It's a great location potentially for a full scale Tires2Oil facility using the crumb rubber from the Poseidon plant,'' he said. A Tires2Oil plant would cost between $13 million and $15 million to build, ARS estimates.