Nonmetallics

Tire recycler GreenMan Technologies Inc., Des Moines, Iowa, has announced its acquisition of Welch Products Inc.

The Oct. 1, 2007, transaction was structured as a share exchange in which 100 percent of Welch Products’ common stock was exchanged for 8 million shares of GreenMan’s common stock. At the time of the announcement, GreenMan had completed the acquisition of approximately 98 percent of Welch’s common stock and expected to acquire the company’s remaining common stock during the next few days.

Headquartered in Carlisle, Iowa, Welch Products specializes in design, product development and manufacturing of products using recycled materials, primarily recycled rubber. The company’s patented products and processes include playground safety tiles, roadside anti-vegetation products, construction molds and highway guard-rail rubber spacer blocks. Through its recent acquisition of Playtribe Inc., Welch also provides playground design, equipment and installation. The company has been a major crumb rubber customer of GreenMan for the past several years.

For the last 12 months, Welch Products and Playtribe had combined un-audited revenues of approximately $3.5 million. Based on customer interest and quote activity, GreenMan says it expects continued growth in the second half of calendar year 2007 and significant growth in calendar year 2008 when Welch’s EBITDA (earnings before interest, tax, depreciation and amortization) and net income are expected to be accretive.

Through the company’s National Safe Surface Initiative®, Welch Products has created an emerging product line and patented marketing program focused on improving playground safety and accessibility, lowering playground maintenance costs and mitigating playground liability risks for schools, community and state parks and child care centers.

Welch and PlayTribe, a playground design, equipment and installation company, are launching a sales strategy that circumvents the traditional distributor channels and sells directly to the end customer.

Lyle Jensen, president and CEO of GreenMan Technologies, says, "Welch Products has developed strong brand names and high levels of customer satisfaction in the playground marketplace which supports a premium price point given the products’ compelling safety profile and endorsements by various public and private organizations. The marriage of GreenMan and Welch/PlayTribe allows both companies to build on each other’s strengths and opens up a new billion dollar market."

Welch Products’ Interim Chief Executive Officer and Managing Partner of First Continental Group ("FCG"), Bruce Boland says, "We feel this merger with GreenMan is based on a number of sound business decisions that match up the strengths of both companies and we are comfortable that Lyle Jensen can provide the necessary leadership to drive this next phase of our business model as we look to a stronger calendar 2008."

Outside observers who reason that scrap tires are relatively uniform could learn otherwise from Troy Hess, current president of the Institute of Scrap Recycling Industries Inc. (ISRI) Scrap Tire Chapter and vice president of Mahantango Enterprises Inc., Liverpool, Pa.

Hess, who has been working both on behalf of ISRI and his company to help set up a classifying system for companies involved in the collection and processing of scrap tires, was one of three presenters on the topic at the 2007 ISRI Scrap Tire Summit.

The system Hess is using includes classifications such as Clean Passenger Tires, Dirty Passenger Tires and Other Passenger Tires (contaminated and burned), as well as Radial Truck Tires and Bias-ply Truck Tires. Most of these classifications also have prepared or unprepared sub-classifications.

Bill Cook of Wholesale Tire Co., Clifton Forge, Tenn., reminded processors that domestic markets still exist to repair and re-sell used tires. "I see a lot of tires thrown onto [shredder] conveyor belts that don’t have much more wrong with them than a nail in them," he commented. "A lot of these can be repaired."

Cook’s company classifies tires by their condition and, to some extent, by the date they were manufactured. He remarked, though, that "the date is not everything; some good, repairable tires have just been in storage for awhile."

Anne Evans of EER Ltd., Hebron, Conn., gave an overview of the used tire export market. She noted that Central and South America were the most common destinations for tire exporters in the United States.

The most active used tire export regions are near the ports of Southern California, South Florida, the Gulf Coast and the corridor from Boston to Baltimore. The cost of inland freight can mean that bringing in tires from very far away from these ports can be cost-ineffective.

Evans estimated that some 15 percent of the tires that a scrap tire processor handles could be classified as repairable or re-sellable and could be culled from the processing line.

The ISRI Tire Recycling Business Summit was held in September at the Hyatt Regency in Rosemont, Ill.

Research that looks at recycling tires into tiling has been funded by the U.K.-based Waste and Resources Action Programme (WRAP). The Airport Business Centre (ABC) managed the project, working with Crumb Rubber Ltd. and Queen Mary University.

The project investigated the behavior of scrap plastics when blended with rubber powder derived from post-consumer tires. The trial involved the development of indicative test molding to show the potential of this compound for commercialization and the creation of a new replica slate roofing tile incorporating a high percentage of recycled material.

WRAP is looking at supporting standard testing to provide accreditation for its use in the marketplace.

A full report on the findings of the research trial is available on the WRAP Web site and can be downloaded at www.wrap.org.uk/construction.  

In a related note, WRAP has released its research finding on the cost of tire disposal.

The report is available at www.wrap.org.uk/construction/tires.