What is a Tire Made Of?
Car and light truck tires are made from rubber compounds, steel wire, and synthetic and natural fibers. All of these materials are recyclable. Currently scrap steel is at around $250.00 per ton, there is about 3 lbs. of steel in a car or light truck tire that equates to $0.38 per tire just in scrap steel value.
Scrap steel values have dropped to about $50.00 per ton. Depending on where you are located this may be significantly higher or lower.
That leaves the rubber this can be processed down to crumb #40 mesh and smaller (#40 mesh equates to material that will pass thru a screen with 40 holes per square inch). The crumb rubber is used for many purposes some of which are asphalt additives, doormats, revulcanized rubber products, building material fillers, ect. Crumb rubber resells for around $0.17 per pound. That's about $2.00 per tire.
Rubber mulch is another profitable use of the tire rubber. Rubber mulch consists of wire free tire chips sized to minus 3/4'. This product can be colored or shipped black. It is generally used for mulching around trees and shrubs. Another great use for this is around playground equipment it acts as a cushion should a child fall. Rates for mulch vary greatly but it averages between $0.14 - $0.21 per pound. Sidewall rubber is a convenient source for wire free material.
Tire derived fuel (TDF) TDF is generally tire chips sized to minus 2' with minimal exposed wire. This material is sold to power plants and cement kilns to supplement the burning of coal. This material varies greatly in size requirements and price paid, also some states don't allow it to be used. It can prove profitable to resell a percentage or all of your material for TDF if you don't have the equipment or space to process the tires down further. Prices paid for TDF are in the realm of $40.00 per ton.
Tire disposal fees are the bread and butter of this industry. You can expect to be paid between $0.75 - $3.00 per tire to pick-up and dispose of waste tires. A good minimum scenario a one person operation that can dispose of 500 tires per day can generate $375.00 gross. If you can recycle 6lbs of sidewall rubber into mulch per tire that's an additional $250.00 per day. Pulling the bead wire to be recycled as steel scrap can produce and additional $125.00 per day. This adds up to $750.00 per day gross profit. That's $195,000 per year for a one person operation. This is at the minimum rates for disposal fees and processed tires, most areas are in the $1.25 per tire range.
Starting a Tire Recycling Business
One of the most asked questions we get is 'where is the money in recycling'? There is no simple answer to this question. For starters location is a key deciding factor. You have to do research in your area of where you can resell your finished products. One good example Is TDF if the nearest power plant or kiln that accepts this material is100 miles away and they are only paying $40.00, then you are probably not going to profit from this, due to the transportation costs. Talk to local tire retailers and find out what they are paying to get rid of their scrap tires, also find out how many tires are sold in your area on a monthly basis. If there are not enough tire retailers in your area willing to deal with you then you have to branch out. This gets back to the transportation Issue. Talk to local landscapers and find out if they are using rubber mulch products. This materialÂ can be shipped nationwide, but if you have a local customer to buy it you will save a lot on packaging costs.
Model Your Business
Gather as much information as you can about the local market. Spread sheet the expected amount of tires collected, disposal fee's, expected fuel and labor costs, building rent, utilities, advertising, and maintenance costs.
Make multiples of these models with different scenarios dealing with expected and unexpected lows and highs. make sure that in worst case scenario you can still turn a profit or at least survive until the next up swing . Hundreds of startup businesses go bankrupt every year simply because they based their business plan on their highest producing model. Average your models.
Do Your Homework
This business has been around for a long time and there is a lot of available information out there. Don't be afraid to call other people in the recycling business and pick their brains. Most are good people and don't mind giving out a little bit of helpful advice.
Check Out All of Your Equipment Options
We are not the only manufacturer of this type of equipment, and encourage potential customers to check out what options are out there. I would rather refer someone to purchase a system from one of our competitors that better suits their needs, then watch someone loose there shirt with a system that's worthless to them.