Tyromer Inc. (Tyromer, Company, www.tyromer.com) was incorporated in June 2009 for the commercialization of a University of Waterloo chemical solvent-free rubber devulcanization invention. While the technology can be used for a wide variety of rubber, the Company focuses on the scrap tire rubber market because scrap tire management is a global problem desperately seeking an environmentally sustainable and financially viable solution.
Overview for Context
In North America, about 350 million scrap tires are generated per year. Because tire rubber is vulcanized, there is no easy way to reuse the rubber from scrap tires. Typically, less than 20% of a tire (the tread) is used before disposal. In the US, (www.rma.org/download/scrap-tires/market-reports/US_STMarkets2009.pdf), over 40% is burned for their fuel value (Tire-Derived Fuel, TDF, www.scraptirenews.com/tdf.php). Although energy recovery is the least desirable form of recycling, the political and societal pressure to divert scrap tires from landfills and stockpiles has established the TDF market as their sanctioned graveyard. Governments and scrap tire management agencies offer incentives to promote higher diversion from TDF for reuse and impose an “eco fee” to help fund these incentive programs. Sharp increases in eco fees are a simple reflection that existing programs are not working. For example, in 2014, Ontario Tire Stewardship in Canada, increased the eco fee for a typical agricultural tire from $15 to $353. The fee tops out at $1,311 for the largest tires used in mining and construction.
In 2012, about 25% of the scrap tires were diverted to rubber crumb production in NA. However, of the 1.6 billion lb of crumb rubber produced, only about 500 million lb ended up in reuse in molded/extruded products. The remaining goes to sport fields and playgrounds because new markets are few and existing markets are being saturated.
Because tire rubber is vulcanized and difficult to reuse, the scrap tire management philosophy has been driven by a disposal mindset. The Tyromer technology can reverse scrap tire rubber to a state suitable for large scale reuse, and will allow the scrap tire management philosophy to shift to a resource recovery practice to provide a sustainable solution to a global problem.
The Tyromer devulcanization process uses supercritical CO2 in an extruder to selectively break the cross-linking sulfur bonds to effect rapid devulcanization. The Company has scaled up a lab invention into a reliable industrial process for the continuous conversion of crumb rubber into Tyromer TDP (Tire-Derived Polymer). The process has been demonstrated to be reliable, cost-effective and environmentally sound, and can be implemented globally.
Through a strategic collaboration with a major rubber compounder and a potential customer, the Company validated a tire tread compound with 20% Tyromer TDP content. As a comparison, only up to 5% incorporation has been possible with typical state-of-the-art specialty crumb rubber. For this reason, Tyromer is confident that it is well positioned to become the company with the preferred and sustainable solution to the global scrap tire problem, and to provide a process for the economic harvest of a renewable resource.
Because of the distributed nature of scrap tires/crumb rubber and the global nature of the business, Tyromer will pursue a licensing strategy. The Company has developed a strategic alliance with the extruder manufacturer to supply and support the devulcanization equipment globally. In 2013, the Company secured its first licensee in France. Pending licensees are in Croatia, Hungary, Spain, Russia and Turkey.
In late 2013, the Company entered into an agreement to construct a Tyromer TDP production line within the rubber compounding facility of its collaborator and potential customer. Financing for this production operation is pending. The entire output will be absorbed by the collaborator/customer and the production line will be profitable as a stand-alone operation. This facility will also serve as a “show room” and “Product and Process Development Center” to drive and support licensing activities. Operational data will be used to generate solid financial proforma to maximize license fee and royalty terms. The Company will be able to transition from licensing a technology to licensing a turn-key production plant.
With a robust financial model, Tyromer will reach out to individual crumb producers in NA as potential JV partners. The JV will operate under license and will enable the Company to capture a higher ROI and to share in the long term revenue stream.
To realize a large number of licensees and JVs, Tyromer will create market demand and develop new uses for its Tyromer TDP through strategic collaborations with major tire and rubber companies. On R&D, the Company has developed a pipelined product which uses Tyromer TDP as a key component, along with post-industrial plastics, in the manufacture of an underhood polymer with 100% recycled content for the automotive industry.
The inventor, Professor Tzoganakis, maintains an active university research program which will serve as an IP pipeline for the Company and his research group will also serve as an HR pipeline to support growth. The three employees are former Ph.D. students and a Post Doctoral researcher, and possess among them essentially all known information on supercritical carbon dioxide assisted rubber devulcanization.
Currently Tyromer has a small and serviceable debt. Its operation is cashflow positive. Because its vision is to offer a socially responsible, environmentally sustainable and financially viable solution to the global scrap tire problem, and to generate ROI for its investors and stakeholders, it is seeking investment to build and support a team to roll out its business globally.