STOCKHOLM — Scandinavian Enviro Systems S.A.S. projects to establish tire recycling plants in Denmark and the U.S. are behind schedule, but the Stockholm-based company remains confident all three projects will come to fruition.
Enviro's projects with WindSpace A/S of Denmark, EE-TDF Cleveland L.L.C. of the U.S. and Treadcraft Ltd. of Canada are planning to use Enviro's patented pyrolysis technology to recover carbon black, oil and steel materials.
The deadlines for when agreements were to be completed have now passed for all three projects, the Swedish scrap tire processor disclosed in a statement issued July 4.
However, this "will not affect the outcome of the negotiations or the possibility of opening the various plants," based on Enviro technology, the Swedish company stated.
For over a year, Enviro has been negotiating with the three companies concerning final contracts for preparing local plants for tire recycling based on its tire-recycling technology.
Enviro's acknowledgement of the delays coincides with a revamped approach to the business.
"We have changed our strategy and business model," Enviro CEO Thomas Sörensson said. "We now are investing in becoming part owners in new plants so as to capitalize on the revenue streams that these generate.
"This means that our contract negotiations are a little more complicated, but also that we need to settle a number of financial questions before we can establish a final contract."
Enviro signed an MoU with EE-TDF Cleveland in December 2018 toward establishing — through a JV — several plants for tire recycling in the U.S. market. The first facility would be established at the company's existing site in Texas.
According to the plans originally communicated, the parties were to sign a binding contract within three months and the first project was to begin in the second quarter of this year.
In the case of Treadcraft, an initial MoU with a deadline of six months was signed in June 2018. This agreement was then extended by another six months in December last year when the parties also decided to investigate the possibility of establishing a JV.
The collaboration with Treadcraft pertains to the establishment of a jointly owned recycling plant in Buffalo, N.Y., Enviro said. .
In the case of WindSpace, an MoU was signed in May 2018, with the intent to establish a joint venture to build a pyrolysis plant in Denmark within 18 months.
WindSpace has since signed a lease for an empty plot in Nyborg Harbour through Elysium A/S, a company established to operate the plant to be built there.
"The Danish company also submitted applications for both building and environmental permits," Enviro CEO Thomas Sörensson said.
According to Mr. Sörensson, the fact that no final agreements have been reached is not due to a lack of interest in establishing the plants.
"We still need to agree on the financing scheme and the details in the contract that will be prepared," Mr. Sörensson said.
However, Sörensson did not give any new dates for when the company believes contracts will be ready.
Enviro must "carefully evaluate which projects provide the best long-term conditions for us and which we should therefore invest in," he stated.
According to its website, Enviro uses technology based on the patented pyrolysis system developed in 1994 by inventor Bengt-Shure Ershag.
Enviro opened six pilot plants in Sweden between 2005 and 2010 and a full-scale plant in Asensbruk, Sweden, in 2013, the company said.
In June 2019, Trelleborg Lanka (Pvt) Ltd. placed three initial orders for EnviroCB, Enviro's recovered carbon black, for production of solid tires, Enviro said.