Maryland Environmental Service's plan to build a new scrap tire processing facility in Baltimore is making the rubber recycling industry nervous.
Officials of MES, a Maryland state agency that operates as a non-profit environmental management corporation, said they needed the new facility to address a shortfall in tire recycling in the state. The founder of Maryland's largest, oldest tire recycling business, however, said MES is setting up business in direct competition with him, while recycling experts are concerned about the effect the project may have on private enterprise within the industry.
The 100,000-sq.-ft. plant-including 40,000 square feet of production space, with the rest for packaging, storage and workshop maintenance-is under construction now, according to Tait Saderholm, an MES marketing manager who will be in charge of sales and marketing for the facility. Start-up testing will begin in late December, and the plant should be up by the first of the year, he said.
The plant will have capacity to handle about 1.5 million tires annually, producing nearly 24 million pounds of crumb rubber, according to Mr. Saderholm. It will produce crumb of 3/8 to 1/2 inch in size for the playground, horse track and similar markets, as well as finer-mesh crumb for molded goods, he said.
``We noticed a hole in the process, a shortfall of tire recycling,'' said Mr. Saderholm of Maryland's need for a new tire recycling facility. ``We've been cleaning up tires in Maryland for years, and we're tired of it.''
Much of MES's decision to build the plant was based on the study done by Gary Bryant, CEO of GBC Group of Florida Inc., a private environmental consultancy based in Lecanto, Fla. Mr. Bryant began the study for a private company that was thinking about entering the crumb rubber business in Maryland, then continued the study for the agency at its request after the private firm dropped out.
Mr. Bryant said the shortfall in recycling began when two cement kilns in the state stopped using scrap tires as fuel. One company went out of business, while the other converted its kiln to a new fuel process that can't use scrap tires.
MES estimates the total cost of the project, including startup, at $6 million. All the funding was private, coming from banks based on the agency's credit, Messrs. Bryant and Saderholm said.
The plant will get its tires from county-run landfills, they added. The counties will pay a tipping fee of $65 per ton, as well as fees for the trailers MES will leave at the sites. The agency has contracted with licensed tire haulers to handle the trailers and bring the tires to Baltimore.
``We're also going to the people who are in the business of transporting tires to see if they'll divert some of their supply to us,'' Mr. Saderholm said. They lost their usual customers when the cement kilns and some other scrap tire users closed down, he added.
All of this is ``nerve-wracking'' to Norman Emanuel, president of Emanuel Tire Co. in Baltimore and, by general industry consensus, the dean of U.S. scrap tire processors.
``I think it's wrong,'' Mr. Emanuel said. ``They can camouflage it any way they want to, but it's a state operation any way you look at it.'' Even if the initial funding was private, he said, it's hard to believe the state wouldn't bail out the facility if it gets into financial trouble.
Despite MES's insistence to the contrary, everything the agency plans to do at the new plant is in direct competition with Emanuel Tire, Mr. Emanuel said. ``We make crumb rubber of every type,'' he said. ``There's no service we don't provide, and the only tires we don't take are burned tires.'' He also was skeptical of the MES's claims of a tire recycling shortfall in Maryland. ``The private sector did a survey of the business here and backed out, but MES took it and ran with it,'' he said.
Mr. Emanuel was particularly concerned about MES's not-for-profit status, which gives them means to undercut his prices. ``They don't need to make money,'' he said. ``Why did they wait until I've invested everything in this business to do this? The state should be ashamed of itself, spending the taxpayers' money this way.''
Particularly galling to Mr. Emanuel is that Emanuel Tire qualified for a $540,000 grant under a state recycling program, he said, yet lost the money because the state waited until after its own deadline had passed to send the grant check. ``They took that money and bought the equipment I myself would have purchased,'' he said.
Michael Blumenthal, senior technical director at the Rubber Manufacturers Association and longtime coordinator of the association's scrap tire management programs, also has doubts about how the MES project will affect the tire recycling market.
``There's a very fine line here, because MES is a quasi-private, quasi-public organization that gets a lot of its budget from the state,'' Mr. Blumenthal said. ``You have to take it at face value when they say they used no public funds for this project. But what if it goes belly-up in three years? Will the state resume it?''
Mr. Bryant and Mr. Saderholm insist that all such fears are unfounded.
``MES is not displacing any current business,'' Mr. Bryant said. ``The matrix of potential customers is double what the plant can supply. Norman Emanuel is one of the biggest TDF (tire-derived fuel) suppliers around. Norman has found his niche, and if he could find a reason to expand, he probably would.''