With the right attitude, the right financing, the right equipment and—if you are lucky—the support of state leaders, tire recycling can be a profitable business. Unfortunately, the stars rarely align to provide an entrepreneur with such a constellation.
“When people ask me how business is, I tell them that business is good,” says Barry Kauffman, owner of American Tire Recycling Group LLC, Miami. But, he cautions, “To be successful, you have to live the business. You can’t just hope to make money. You have to live the business every day.”
Kauffman and Alfredo Reviati share management tasks at American Tire Recycling. Kauffman is in charge of sales and marketing, and Reviati manages daily operations. For the business partners, living the tire recycling business means thinking about solutions on the line, building customer relationships, moving products in new and innovative ways and keeping a clear vision of the future.
Kauffman says he is proud of the fact that customers can get a decision straight from the horse’s mouth with a single phone call. Over the phone, he sorts out dates and prices and completes the deal on the spot; at American Tire Recycling, there is no runaround, no need to talk to four different departments.
“Shred what you say you will shred,” he says. “Give the customer what you promised to give them.”
Kauffman says too many fly-by-night operators get started in the tire recycling business and then walk away, leaving behind disappointed customers. “Success comes from good customer relations and good customer service,” he says.
Customers can drop off tires at American’s site, or the company will pick up loads from customers’ sites or spot a bulk trailer at locations where tires are generated.
American Tire Recycling’s dedication to customer service has resulted in the business doubling each of the past four years, Kauffman says. “That’s the tonnage that is doubling each year, not the profits,” he is quick to note. “I wish it was the money!”
an evolving business model
The company’s tire processing operation in northwestern Miami is under one roof. The 87,000-square-foot building houses American’s processing equipment and operations, while an additional 3 acres of land are used for storage.
The company sources tires from all over southern Florida, including the Florida Keys, Palm Beach County and the Gulf Coast areas of Fort Myers and Sarasota.
The mulch American Tire Recycling produces is sold to brokers who distribute the product throughout the region.
Initially, American Tire Recycling sought to produce a black mulch product, with distributors doing the colorizing, packing and shipping. However, Kauffman says, “eventually the business forced me to do colorizing.”
They company’s original model has evolved to the point where American Tire Recycling now manufactures red, brown or black mulch, packaging it in 25-pound or 50-pound bags.
Quality is a huge concern with rubberized mulch. Standards have become stricter, with good reason, as steel shreds in rubber mulch are anathema. As a result, Kauffman and Reviati were picky about the equipment they chose to expand the company’s operations.
While the company’s initial focus was on producing rubberized mulch, American has expanded to produce tire-derived fuel (TDF) as well. To do so, in the past two years, American has invested more than $4 million in new equipment.
On the line
American Tire Recycling installed two shredders from CM Tire Recycling Equipment, a brand from Sarasota, Florida-based Columbus McKinnon, and a CM Steel Reclaim System Liberator.
“We can do 28,000 tons a day,” Kauffman says of his company’s processing capacity.
The shredders’ main task is whole tire reduction to shred or chip size. Typically, this means a 6-inch-to-2-inch-minus product. At American Tire Recycling, the size depends on the product being produced.
Each side of the company’s dual line can handle up to 1,000 tires per hour.
The system produces a high-quality TDF, or the tires go through secondary processing to manufacture a landscape mulch product.
The wire is reclaimed at the 3/8-inch-minus screen. A coloring line allows American Tire Recycling to transform the black rubber into a brown or red landscape mulch, which can be bagged and sold to retailers.
The Liberator can granulate shredded tires into clean crumb rubber feedstock and simultaneously remove steel. Typically, the crumb rubber American Tire Recycling produces measures between 3/8 inch and 7/8 inch in size. The machinery, however, is capable of producing a particle size as large as 1 ¾ inches.
“If you are looking to succeed in the tire business, you have to have a flexible operation,” says Charlie Astafan, general manager of CM Tire Recycling Equipment.
He says the optimal setup will allow a recycler to produce TDF, mulch or a fine granulate to meet market demand.
Kauffman and Reviati say they like the fact that their equipment supplier’s headquarters is a three- or four-hour drive away from their operation. “When we need parts or blades, it is just a short drive to get them the same day,” Kauffman says.
While he is sure he can rely on his equipment supplier for support, Kauffman says receiving more help from the state would be appreciated.
Where is Florida?
It is this action—getting more support from state and local government—that remains elusive in the Sunshine State.
“We’ve got many issues with tires here in Florida,” Kauffman says. He points to illegal tire dumping as a key challenge to counties around the state.
Meanwhile, many of the collected tires might end up going to China or Vietnam. “We are a solution right here,” he says.
“Florida is behind other states as far as tire recycling goes,” Kauffman says. He notes that he and Reviati had to do all their own equipment financing.
“Other states give grants,” Kauffman says, noting the support that states like South Carolina and California give to tire recyclers.
“We were not offered any incentives. It was all private money with us,” he says.
In addition to hoping for more support from Florida, Kauffman says he wishes others in the tire recycling industry would be more involved in the case of public scrutiny.
He wonders why he was the only one who appeared willing to talk to NBC-TV when it did a series of reports in 2014 that slammed the rubber mulch industry.
NBC reported that, according to U.S. Environmental Protection Agency (EPA) research, benzene, mercury, styrene-butadiene, polycyclic aromatic hydrocarbons, as well as arsenic, heavy metals and carcinogens, have been found in tires. Additionally, NBC reported that studies have found that crumb rubber can emit gases that can be inhaled. When the material gets hot—and it does get hot in Florida—it can increase the chances that volatile organic compounds (VOCs) will “off-gas,” or leach into the air.
That’s not the kind of publicity that makes a mother cheerful when the local town says it plans to use rubberized mulch on the school playground.
“If you are looking to succeed in the tire business, you have to have a flexible operation.” – Charlie Astafan, CM Tire Recycling Equipment
Kauffman says the International Play Equipment Manufacturers Association (IPEMA), the American Society for Testing and Materials (ASTM) and Americans with Disabilities Act (ADA) all have standards to assure healthy, safe use of this material.
One might note the EPA also studied air and surface samples at four fields and playgrounds that use recycled tires—the same material that cushioned the ground under the Obama family’s playset at the White House. The limited study, conducted in 2008, found that the concentrations of materials that comprise tire crumb were below levels considered harmful.
One key to producing a quality product is to assure that the metal is removed from the crumb rubber.
American Tire Recycling has invested roughly $200,000 in magnets and is likely to spend more money in this area as the business expands.
Expansion is definitely on the horizon for the recycler. While American Tire Recycling has a solid base in southern Florida, the company plans to expand geographically and in terms of the types of tires handled.
It has two main thrusts for 2017. The first will be an expansion into OTR (off-the-road) tires. The second will be a move to source airplane tires.
“Lots of people have tractors and heavy equipment that they operate,” Kauffman says. Disposal of the huge and heavy tires that come from such equipment presents a real problem for local recycling operations. Many are simply not equipped to handle anything larger than automotive or small truck tires.
“The whole industry has to look good,” Kauffman maintains. “It is not all about making a quick dollar. You have to be in the tire business as a long-term solution.”