Len Bland

Louisiana, LA (USA)
Role(s):
Other

Louisiana Elastomers, LLC

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Location: Vidalia
Industry: Manufacturing
Year Founded: 2006
Number Employees: 50-100 people
Description: Louisiana Elastomers recycles used tires into Tirecycle(R) a Natural Rubber Substitute for new tires. Business Summary: The company processes scrap tires and waste industrial rubber into rubber compounds suitable for replacing up to 85% of the virgin rubber used in normal high value rubber products. The surface reactive crumb rubber, known as TireCycle(R), is substantially less costly to produce than virgin rubber compound and therefore highly attractive to the marketplace. [No other rubber modification technology in the world can do this.] Management: We are seasoned Fortune 500 and startup executives with an average of over 30 years executive experience in companies like Rohm and Haas, Safeway, Trammel Crow and Amgen. The team is experienced in technical marketing/sales, process engineering, manufacturing operations, statistical analysis/quality assurance, logistics/warehousing/distribution systems, and exports. Team members possess credentials in chemistry, materials science, and engineering. Customer Problem: 1. Natural and synthetic rubber is expensive. A demand and supply imbalance for rubber has resulted in skyrocketing prices and a shortage of product for major manufacturers. 2. Used tires clog our landfills. Product/Services: We sell Tirecycle(r), a substitute (up to 85%) for compounds produced using natural rubber. Demand for these compounds exceeds 18 billion lbs./year in the U.S. The plant will process the entire scrap tire, selling other components such as steel and fiber as byproducts. Only electricity is used in the process, reducing the pollution created in producing new rubber components. Target Market: The 18 billion lb. demand for natural rubber is used to make Tires, Tread, Solid wheels, Industrial rubber molding, Roofing (asphalt membrane,shingles), and Butyl (innertubes, innerliner of tires, curing bladders). This market is large enough for 200 plants at full capacity. An additional market is Thermoplastics (HDPE, Polyproplyene, …) using over 110 billion lbs./year (U.S.). Prospects include every major tire producer in the world. Customers: Companies using or testing Tirecycle®: Oregon rubber Mills, Northwest Retreaders, Koneta, GPX/Galaxy, Titan Industries, Continental Tire, Amcol/Cetco, Lot-Ridge Rubber, Ployglass, TCB, Nike, WR Grace, Flexco... Sales/Marketing Strategy: The company has created an aggressive program for reaching out to major customers. The company is receiving unsolicited requests for product due to an industry wide shortage of synthetic and natural rubber. The company's policy is to engage potential customers in tests in order to gain ongoing purchasing approval. Major customers have written letters of intent for production equivalent to over two plants of production at maximum capacity. Business Model: The company sells Tirecycle(r) for $.65 per lb., delivering over a $.30 per lb. gross margin. This sales price is $.45 below the current market price for natural rubber and other components used for tires. Competitors: Competition includes the use of natural or synthetic rubber along with other compounds used for tire making, currently priced between $1.10 and $1.50 / lb. Other users of scrap tires reuse (not recycle) them for fuel, roads, or field turf. These other scrap tire users operate businesses with a gross margin near $.03/lb., selling their crumb rubber for $.15-24/lb. Their business is only viable because they receive tipping (tire disposal) fees. Competitive Advantage: Louisiana Elastomers has licensed the only process for converting scrap tires into a natural rubber substitute. They have established agreements to gain control over any other licensees of this trade secret.