If you're going to start a company, it always helps to have people with experience in charge. On that basis alone, Lehigh Technologies Inc. is off to a good start.
Dennis Gormley, chairman, president and CEO of Lehigh Technologies, is the former chairman, president and CEO of auto parts giant Federal-Mogul Corp.
James Gray, Lehigh vice president of sales and marketing, has served as managing director of Tenneco Automotive Europe and president of Clevite Elastomers Inc.
Add to that list COO Anthony Cialone, a former waste management executive who developed Lehigh's patented technology and proprietary manufacturing process; and CFO Patrick George, a veteran of the investment banking and software industries.
After nearly three years of planning and the construction of an 83,000-sq.-ft. production facility in Tucker, Lehigh Technologies is poised to offer high-tech, fine-mesh polymeric powders to tire product manufacturers. Initial capacity will be 100 million pounds annually when the Tucker plant is in full operation, the company's executives said, but they expect demand to grow beyond that.
The company already is scouting locations for a second plant to go on-stream sometime next year. Eventually, Mr. Gormley said, Lehigh anticipates having six to eight facilities in the U.S. and approximately 30 worldwide.
Lehigh specializes in rubber powders with particle sizes of -80 mesh, -140 mesh and -200 mesh, although it can customize the particle size to any customer's specifications, finer even than -200 mesh, Mr. Gormley said.
Lehigh does not recycle whole tires, Mr. Cialone noted, but uses scrap tire chips and other scrap rubber to make its fine rubber powders. Traditional scrap tire recyclers essentially are Lehigh's chief suppliers, though the company also takes scrap from customers and other rubber product manufacturers.
Particle size is the key to making recycled rubber a sought-after, high-value-added product, Mr. Gormley said.
``With a -5 or -10 mesh, you have a product for low-value-added applications, such as septic fields or running tracks,'' he said. ``But when you get to -80 mesh, you can put up to 10 percent of that material back into tires. And that's huge.''
With the current prices of both synthetic and natural rubber, Mr. Gormley claimed tire manufacturers can save at least 20 cents a pound by using Lehigh's -80 mesh powder, with no degradation whatsoever of tire quality.
What Lehigh does
The key to Lehigh's patented process, according to Mr. Cialone, is ``reverse engineering.'' The reason previous scrap tire recycling companies have failed is that they thought in terms of making a product, then tried to find a market for it, he said. Mr. Cialone turned the process inside-out: He started out trying to define what potential customers of recycled rubber really wanted to buy and then embarked on developing a process that would give them that product.
``Once we defined what the customer wanted, we looked at processes other than what already existed in recycling,'' he said. ``We did not come at the technology from the standpoint of the recycling and waste management industries, but from the pharmaceutical and coatings industries. We adapted technologies from those industries in ways that would suit rubber.''
The Lehigh technology involves an ultra-low-temperature process in which liquid nitrogen freezes the rubber to a temperature of minus 320 degrees Centigrade, similar to the cryogenic method. At this point, the rubber becomes brittle like glass and is easily pulverized.
But unlike cryogenics, Mr. Cialone said, Lehigh doesn't use standard grinding equipment. Instead, it fractures the rubber using fine milling processes developed in the pharmaceutical and other industries. The result, he said, is a much higher quality product and vastly better control over uniformity of particle size.
Because of limited supply, the current market for fine rubber powders in North America is 15 to 25 million pounds annually, whereas a major user would require 30 million pounds annually, a company fact sheet states.
Lehigh estimates that once the demand for fine powders was truly activated, total demand would exceed 1.7 billion pounds annually in North America and 3.4 billion pounds worldwide, for a total market value of $1.5 billion.
What Lehigh plans
Several of Lehigh's earliest customers have been retreading companies that want the powders as an ingredient in tread rubber, according to Mr. Gormley. He declined to name companies, but he said they included several major retreaders.
Mr. Gormley noted that among Lehigh's board members and consultants-``a cross-section of experience and knowledge''-are several illustrious names in the tire and auto industries:
* John Fahl, director and consultant to Lehigh, retired executive vice president and president of tire operations for Cooper Tire & Rubber Co.;
* Lee Fiedler, advisor and consultant, former president and CEO of Kelly-Springfield Tire Co.;
* Robert Transou, director and consultant, former group vice president of manufacturing at Ford Motor Co., and
* Karl Albertson, advisor and consultant, former director of purchasing for Continental Tire North America Inc.
Messrs. Gormley, Gray and the others admitted that some reservations persist in the industry about recycled rubber powders-particularly because of skepticism that recycled rubber can replace virgin rubber in a tire. However, younger industry executives accept recycled products more readily than their fathers did, they noted.
``We've spoken to industry executives who said, `I've heard about that, I've been there before, and I don't want to go there again,''' Mr. Gormley said. ``If you're going to make a change, there's always some fear about it. If there's no savings involved, it's hard to motivate people to do something different.''