World Tire Expo Report: Refocusing on Crumb Rubber Markets

The number of companies producing crumb rubber is in oversupply. Industry must focus on end markets to increase profitability and viablity.

Currently, the crumb rubber industry is suffering from an estimated overcapacity of 300 percent. This figure has lead speakers at the 2003 World Tire Expo educational session titled “The Promotion and Continuance of Beneficial Crumb Rubber Markets,” to conclude that creating markets to accommodate current crumb rubber capacity should take priority over continuing to add crumb rubber processing capacity.

This excess capacity has caused the crumb rubber industry to go through price-cutting cycles that leads to false customer expectations as to the true value of crumb rubber.

David Forrester of TIRES Inc. stressed that quality is the key to building markets.

“The best way we can grow is to prove to consumers that we can produce a consistent and quality product,” Forrester said.

 Jennifer Campbell, of American Rubber Technologies (ART), Jacksonville, Fla., warned that imitation is the biggest threat to the market.

While she said that crumb rubber is a beneficial product in the equestrian footings market, improving control, performance, traction, ride, comfort and drainage, while reducing dust, compaction, maintenance, concussion and fatigue, competitors have produced similar products that lack similar benefits.  She cited an example of a competitor who used sneaker rubber in its footing product, resulting in a product that decomposed quickly or blew away. ART’s Perma-Flex arena footing is the only nationally recognized rubber arena fill Campbell added.

“A lot of people are getting into these markets with little knowledge,” Doug Barr, president of rubber-colorant producer Bar Formulated Products, Wexford, Pa., said. “This results in marginal producers.”

Currently, Forrester said, crumb rubber markets are cyclical, with slow but steady growth. 

Floor mats, for instance, are growing at a rate of less than 5 percent yearly, Forrester said, consuming between 50 million and 100 million tons of rubber yearly. The sport and playground surface market, which Forrester said presently consumer buffings, will look to consume more crumb rubber as buffings become scarce, adding that this market has the potential to use more than 100 million pounds of crumb rubber yearly.

Other potential markets Forrester cited are as underlayments for walking trails and pavements, as a cushioning layer over concrete foundations of homes and as paving material for home patios.  He added that walking trials could represent a “great regional market” for crumb rubber and “the largest single-most opportunity for crumb rubber.”

Barr said scrap tires currently are divided among the following markets: 35 percent to tire derived fuel markets; 25 percent goes to crumb rubber production; 10 percent to civil engineering projects; 3 percent to surfacing; 2 percent to export; and 25 percent to landfill/other applications. Barr said that of the crumb rubber used yearly, 30 percent goes into rubber-modified asphalt; 31 percent into molded products;10 percent to new tires or auto applications; and 18 percent of the crumb rubber goes into surfacing and ground rubber production.

He added that sport and landscape surfacing represents a “rapidly expanding” market for recycled crumb rubber and that playground surfacing is a “viable alternative for recycled used tires.”

However, unfavorable factors, such as lack of marketing and consumer awareness and poor distribution networks, prevent additional market growth, he said. In order for additional growth to occur in crumb-rubber end markets, in addition to creating market awareness and establish demand and distribution networks, the industry must also establish and maintain a high-quality product.

Barr predicted that enhancing rubber substrate, such as by colorizing, will be a growing industry in the years to come. Because of these enhancements, Barr says, “there is a growing acceptance of products and an expansion of the marketplace.” Value-added benefits such as this will attract a customer base, he added.

“The Wizard of Oz,” Barr said, “is just another example of how color sells. That road to the Emerald City of profitability is there for us, but it’s up to us to make that happen.”

The World Tire Expo, sponsored by the Tire Industry Association, was held in Louisville March 26-28 at the Kentucky International Convention Center. It included workshops on recycling, technical issues, legal considerations, business and finance, as well as an exhibit hall with a variety of equipment and service providers. 

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