PERSPECTIVE: CRUMB RUBBER MARKET and PARALLEL EXPERIENCES

1
PERSPECTIVECRUMB RUBBER MARKETandPARALLEL
EXPERIENCES

• Presented by
• TERRY A. GRAY
• T.A.G. RESOURCE RECOVERY
• At
• THE CIWMB
• WASTE TIRE FORUM
• SACRAMENTO, CA
• MARCH 9, 2006

2
PERSPECTIVE

• STUDIES OF THE NORTH AMERICAN CRUNM RUBBER MARKET
  WERE PERFORMED IN 2001 AND 2004.
• 2001 MARKET ANALYSIS INDICATED THAT THE MARKET
  WAS SMALLER THAN GENERALLY REPRESENTED
• U.S. AND CANADIAN COMPANIES HAVE SEEN MAJOR
  MARKET CHANGES AND CHALLENGES SINCE 2001

3
MAJOR US PROCESSOR CHANGES SINCE 2001

• COMPANY CHANGE
• ART FL NEW OWNERS
• ATLOS CA CLOSED
• BAS CA NEW MGMT
• ENTIRE NE MAJOR FIRE
• FNRI CA SHUT DOWN
• GLOBAL FL BANKRUPT
• LANDSTAR-3 BANKRUPT
• NEW HOPE IL CLOSED
• RB OR NEW OWNER

4
MAJOR CHANGES(CONTINUED)

• COMPANY CHANGE
• ROUSE MS FIRE-CLOSED
• SANTEE SC BANKRUPT-2
• TIRES NC CLOSED
• RTG 5 REORGANIZE
• RESULT-ALMOST 60 HAVE CHANGED OWNERS OR FAILED

5
METHODOLOGY

• PROVINCIAL/STATE DATA (WHERE AVAILABLE)
• DIRECT COMPANY DISCUSSIONS
• INDUSTRY SOURCES
• AGREED TO PROTECT INDIVIDUAL DATA

6
2004 US MARKET(BY REGION)

• REGION QUANTITY
• NORTHEAST 125
• SOUTHEAST 133
• NORTH CENTRAL 35
• SOUTH CENTRAL 85
• WEST 155
• TOTAL 533

7
CANADIAN MARKETBY REGION

• AREA MANUF
• MARITIME 25
• QUEBEC 97
• ONTARIO 74
• WESTERN 74
• TOTAL 270

8
NORTH AMERICAN MARKET

• MARKET CANADA US TOTAL
• ASPHALT 2 115 117
• MOLDED 138 184 322
• SPORTS 100 134 234
• ANIMAL 22 25 47
• TIRES 2 50 52
• OTHER 6 25 31
• TOTAL 270 533 803
• (34) (66)

9
2004 VS 2001

• ASPHALT DOWN 80 MM STATE ECONOMIES
• MOLDED PRODUCTS UP 112MM CREATIVITY AND
  AESTHETICS
• SPORTS SURFACING UP 114MM TURF, TOP DRESSING,
  EQUESTRIAN, PLAYGROUND
• NET IMPACT UP 133 MM POUNDS (20)

10
MAJOR US ASPHALT MARKETS

• STATE USAGE
• ARIZONA 40
• TEXAS 32
• CALIFORNIA 18
• FLORIDA 16
• OTHERS 3
• CRACK SEALANT 6
• TOTAL 115

11
EVOLVING ECONOMIC FACTORS

• CURRENCY FLUCTUATION
• US RATE CAN
• 0.10 0.65 0.154
• 0.10 0.75 0.133
• 0.10 0.80 0.125
• 0.10 0.85 0.118

12
TRANSPORTATIONCOST IMPACT(/POUND)

• 1/MI MILES 1.50/MI
• 0.011 500 0.017
• 0.022 1000 0.034
• 0.044 2000 0.068

13
INDUSTRY ISSUES

• OVERCAPACITY
• MAJOR MARKET SHIFT
• ADDITIONAL EXPANSION
• SIZE DISTRIBUTION
• OUT SOURCING CHINA
• REALITY
• NEW GORILLAS
• UNISPHERE-FAILED
• RMD?

14
SUMMARY

• SOME GROWTH
• SOME HOPE
• SOME CHALLENGES
• INNOVATIVE APPROACHES AND PRODUCTS NEEDED

15
PARALLEL EXPERIENCE-FLORIDA

• MANY SIMILARITIES
• 4TH LARGEST STATE
• 800 MILES TIP TO TIP
• RAPID GROWTH
• LIMITED MANUFACTURING BASE
• ISOLATED
• LATIN INTL INFLUENCE

16
PROGRAM CHARACTERISTICS

• INITIATED IN 1989
• 1.00/TIRE FEE FROM BEGINNING
• INITIAL FOCUS STOCKPILE CLEAN-UP

17
STOCKPILE RESULTS

• OWNERS 8.9 M 59
• DEP 5.2 M 34
• COUNTIES 1.1 M 7
• TOTAL 15.2M 100
• lt80,000 REMAINING-SMALL PILES
• NO MAJOR FIRES

18
WASTE TIRE GENERATION

• CAREFULLY DEFINED BY MULTIPLE METHODS
• IN 2004, 19.5 M PTE
• POPULATION 17.3 M
• 1.13 PTE/PERSON
• EACH STATE UNIQUE

19
2004 MARKET DIVERSITY

• CRUMB RUBBER
• HIGHWAY 1.04 M
• PLAYGROUND 0.66 M
• ON-GROUND 1.64 M
• MOLDED 1.01 M
• TOTAL 4.35 M
• 22.3

20
CIVIL ENGG-2004

• DRAINFIELD 0.58 M
• LANDFILL APPS 0.86 M
• DC 1.34 M
• TOTAL 2.78 M
• 14.2

21
ENERGY

• IND TDF 5.19 M
• WTE 0.76 M
• O/S TDF 3.29 M
• TOTAL 9.24 M
• 47.4

22
2004 TOTALS

• TOTAL 16.37 M
• UTILIZATION 84
• LANDFILL 3.13 M
• DISPOSAL 16

23
(No Transcript)
24
IMPORTANT FACTORS

• MARKET DIVERSITY
• SUSTAINABILITY
• VULNERABILITY
• CONTINUING MARKET DEVELOPMENT IN ALL SEGMENTS