Tire plant losing traction?
Industry skeptics say technology unproved, company questionable

By Zsombor Peter
Staff writer

GALLUP — Green Rubber Global tempered its promises for the revolutionary tire recycling plant it plans to build in Gallup after meeting with city and county officials Friday.

Rubber industry skeptics, who watched the Malaysian parent company’s last attempt on the U.S. market fail, say local officials should be asking more questions before investing million of dollars.

“A lot of public money has been lost chasing unproven (sic) technologies, and realistically (this) is not a proven technology,” Michael Blumenthal, senior technical adviser for the Rubber Manufacturers Association, said. “If it’s possible, that would be phenomenal. But let’s wait until they get a couple of clients first.”

Backed by the checkbook and star power of actor Mel Gibson, Green Rubber unveiled its plans to build the world’s first commercially viable, waste-free rubber devulcanizing plant in Gallup July 11. With the aid of its patented DeLink technology, the Petra Group, Green Rubber’s parent, claims to have invented an economical way of breaking the carbon-sulphur bonds that make tire rubber so durable but stumped recyclers for years.

Lured by the promise of more than 140 new jobs, and desperate to replace the 300 jobs set to vanish with the Pittsburgh and Midway coal mine near Yah-Ta-Hey closes next year, city and county officials pledged $1 million to help build the plant. The state’s Department of Economic Development plans on asking the Legislature for another $3 million in January. But after Friday’s meeting, Green Rubber President Rich Homans said the company was changing its initial plans for the plant.

“There’s certainly some skepticism in the rubber world about this, so we’re very careful not to oversell what we can deliver,” he said.

Same goal, new plan
Before DeLink can work its magic breaking those troublesome carbon-sulphur bonds, other machines must break the tires into a fine black powder call “crumb rubber.” The 140-plus jobs the company projected, Homans said, assumed Green Rubber would have a crumbing facility on site processing at least 1 million tires a year. But a closer look at the regional tire market has the company adjusting its projections.

A rule of thumb in the crumbing business, Homans said, is that the average person discards one tire a year. Another is that shipping tires farther than 250 miles isn’t worth it.

That’s a bit of a problem for Green Rubber.

“As we look at the availability of tires, there’s nowhere near a million tires that we would be able to get to come here,” Homans said.

Green Rubber is still committed to bringing 140 jobs to Gallup eventually, Homans said. Only now it plans to get there by attracting other companies here that can put its devulcanized rubber to use making a host of products, anything from running shoe soles to swimming fins.

“Our goals remain the same but our strategy to get there is shifting,” he said.

So is the company’s timeline.

Days after signing a memorandum of understanding with Green Rubber during the unveiling committing Gallup to a $500,000 investment in a new building, filled with the first flushes of a new venture, eager city and company officials were hoping to have the plant churning out “green rubber” by the following July. Homans now says that’s more likely when they’ll break ground.

Though city and company officials feel confident they’ve secured Gov. Bill Richardson’s commitment to pour at least $2.9 million of state funds into the plant, the Legislature still has to sign off. Even if it does, the partners cannot use the money until the fiscal year ends June 30. If designs for the plant are ready by then, Homans said, it could be operating by the end of 2008 with 20 to 30 employees to start.

Industry skeptics say the government shouldn’t be so eager to jump in.

“There’s never been any viable devulcanization plant in North America,” TL & Associates President Terry Leveille, editor and publisher of California Tire Report, said.

It’s not for a lack of effort.

In the pudding
“(Tire) manufacturers themselves have poured many millions of dollars into trying to do this,” Leveille said. “There are lots of promises, but thus far they haven’t been able to deliver.”

“It’s basically like baking a loaf of bread,” Blumenthal said of the vulcanization process — mix a bunch of ingredients together and bake, or in the case of rubber, cure.

A decade of efforts to reverse the process economically, he said, has thus far come to naught. And no one has even attempted the second step, Blumenthal added, that of separating the different kinds of rubber that go into a tire.

“It’s like pulling tomato juice out of V-8,” he said.

Leveille is thinking beyond the science: “The larger question is ... are there markets for the rubber they produce?”

Solving the devulcanization riddle won’t mean much if no one wants to buy the end product. Homans said Green Rubber has already started courting companies that might be interested in putting its raw rubber to use, though it’s sealed no commitments yet.

Blumenthal is little encouraged by Petra’s past. He said it tried marketing its product stateside 10 years ago.

“They made a big splash, they made a lot of noise, they were here about one year ... and then they left,” he said, before even breaking ground on a U.S. plant.

But none of that, Blumenthal and Leveille concede, means Petra and Green Rubber have not found a way to beat the odds in the new millennium.

“Does it mean they won’t succeed this time around?” Blumenthal said. “No ... There may be some opportunities out there that weren’t out there then.”

For one thing, oil, a key raw material for tires, has a much higher market price today, making recycling options once considered too expensive before potentially viable today. For another, Petra may have refined its DeLink technology and made the process more cost efficient.

But before government agencies start investing millions of taxpayer dollars, Blumenthal and Leveille add, they ought to be sure that market exists.

Homans says they’ll find it, and build on it. After Gallup, Petra and Green Rubber plan on expanding across the U.S. with up to a half-dozen plants and into Europe and Southeast Asia along the way.

“We’ve got a long way to go,” Homans said.

If it succeeds, Blumenthal and Leveille agree it would prove a major coup for the industry, which faces the buildup of 1 billion waste tires around the world a year. There’s only so much manufacturers can do with rubber that’s still vulcanized. Devulcanization, they say, would add another tool to the arsenal of options available for putting them back to use.

But as Leveille put it, “the proof is in the pudding.”