Tyromer Technology Asia Limited
A truly tire to tire Circular Economy
June 15, 2022
Tyromer Technology Asia Limited brings the chemical free rubber devulcanization system to China to deliver significant economic and environmental benefit to the tire and rubber industry: with TDP, the tire industry can reduce its dependence on rubber imports and the chemical rubber reclaiming industry can transition to a chemical-free operation that makes a truly tire to tire Circular Economy possible.
Executive Summary
Tyromer Technology Asia Ltd. (TTA – https://www.tyromerasia.com) is an affiliate of Tyromer Inc. (Tyromer – https://tyromer.com), the global leader in environmentally sustainable, chemical-free rubber devulcanization technology. TTA has the exclusive and irrevocable right of use of the technology for China and the Asia region.
When rubber is formed into a tire, it is vulcanized. This is a process where the rubber is mixed with sulfur and exposed to heat. The result is a hard, durable rubber product – the tires we know today. Vulcanized rubber is difficult to reuse because it cannot be easily reformulated or remixed – but that’s exactly where Tyromer devulcanization gets to work.
Due to the limited reuse options of scrap tires, about half of them are burned for fuels, and others use chemicals to make scrap tires into reclaimed rubber, but reclaiming invariably damages the rubber molecules, so the resulting rubber is compromised in properties for applications of high demand, such as in tires. The Tyromer non-chemical rubber devulcanization technology converts waste tire rubber to TDP (Tire Derived Polymer) that can be reused in tire manufacturing.
Rubber has been and will continue to be a strategic material. To reuse rubber China has developed a huge industry in rubber reclaiming using chemicals to process waste rubber, producing annually over 5.5 million tons of reclaimed rubber. The rubber reclaiming industry is generally unsustainable because of the massive amount of chemicals used by processors. TTA can transition this vast chemical rubber reclaiming industry to the environmentally sustainable non-chemical devulcanization technology of Tyromer.
China has six tire companies ranked in the world Top 30. Because China is not a major producer of rubber, the tire industry must rely on imports. TTA can migrate part of the current chemical rubber reclaiming operation to TDP production to provide a domestic source of tire rubber compound.
TTA will focus on producing TDP as a recycled rubber for the tire industry in the region to implement a circular economy.
- TTA targets to convert the top 10% of the chemical rubber reclaiming producers. This alone will require the implementation of over 100 standard TDP Production lines.
- Tire producers in China consume ~15 million MT of tire rubber compound. At an average of 10% use of TDP by half of the tire industry, this is a market of 750,000 MT that will require over 150 standard TDP Production lines.
The market for TDP Production in China will be over 250 lines, not mentioning other Asia Countries
Background and Overview
Globally over 2 billion ELT are generated this year and more as time pass. In North America about half of them are burned for fuels, and others use chemicals to make scrap tires into reclaimed rubber. Although scarp has been effectively utilized, these are not socially responsible ways to manage large “renewable” resources.
Professor Costas Tzoganakis of University of Waterloo, Canada, invented a chemical-free rubber devulcanization technology, using supercritical carbon dioxide assisted, thermal-mechanical extrusion process to continuously convert scrap tire rubber into Tire-Derived Polymer, or TDP. Because TDP preserves the molecular structure of the raw compound, it can be used for its original purpose – making tires, or a variety of higher-value rubber products
Professor Costas Tzoganakis was named the winner of the prestigious James L. White Innovation Award of The International Polymer Processing Society in 2018. Other awards include the 2018 Edison Energy and Sustainability Gold Award and the Business Intelligence Group’s Sustainable Leadership Award. In September 2020, the European Rubber Journal ranked Tyromer TDP among the top ten sustainable elastomers, placing Tyromer among the giants in the global elastomer industry.
Chemical Free Rubber Devulcanization Technology
A Unique Technology
Tyromer technology is the only commercially viable chemical-free devulcanization technology with the following unique advantages:
Clean technology
The sole technology that does not involve chemical solvents in the devulcanization process.
Energy savings
consumes less than 400 kWh energy per ton of TDP products.
Efficiency
Fully automated one step processing, continuously converts crumb to TDP in less than 2 minutes, crumb conversation rate over 99%
Application
TDP retains the material properties of rubber, making it possible to be reutilized for its original purpose or other purposes with higher market value.
Incentives for Adopting TDP Products
TDP can deliver the following benefits to rubber and tire industry:
Cost reduction
The price of rubber has been fluctuating in the range of US$2,000 per ton, and some research reports indicate that the price of rubber will rise to more than US$4,000 per ton in 2024. Since tire rubber contains many high-cost raw materials such as carbon black, synthetic rubber, plasticizers and other materials, at a price of US$2,000/MT for natural rubber, a typical mid-range tire rubber compound would cost in the range of US$2,500/MT. TDP as replacement for tire rubber compound can be aggressively price yet still enjoy reasonable profit and attractable to tire companies for its abundant sources and low volatility
Improve performance
When TDP is added to new tire compound, there is very often an improvement in two key performance indicators (KPI): reducing Rolling Resistance (less fuel is used for driving) and increasing Abrasion Resistance (tires can last longer).
Address Producer Responsibility
Tire manufactures can address producer responsibility efficiently with true circular economy by recycling material in a substantiable way.
CO2 Reduction
Using TDP in tire production can save CO2 from raw material production. For a plant producing 5,000,000 passenger tires per year, using TDP at 10% can save about 13,000 MT of CO2.
Market Competition
In addition to devulcanization or chemical reclaiming, waste tires can be recycled via micronization and Pyrolysis.
a) Micronization
Micronization is to grind rubber into a very fine powder. Micronized Rubber Powder (MRP) is typically cryogenically produced in the size range of 80-400 mesh (China uses 40 mesh to produce reclaimed rubber). The production of MRP is very costly and energy intensive, the final product is of no elasticity. and can only be used as filler in the 3-5% range. Higher level of usage in tire production is not possible as adding MRP increases the compound viscosity very significantly.
b) Pyrolysis
Pyrolysis is to heat the scrap tire to high temperature and decompose it to obtain oil, carbon black (rCB) and steel. Except for steel, the quality of other products is low and unstable. The product flow is complex, it will cause harm if there is incomplete thermal cracking, high oxygen inflow, or improper handling of dangerous products. Furthermore, rCB can also be produced from pyrolysis of more common and abundant waste material such as biomass and plastics. the economic benefit of the technology is an uncertainty.
Tyromer TDP in Non-Tire Industries
The tire industry consumes about 75% of global natural rubber and about 45% of global synthetic rubber. This means that nearly half of the rubber industry is outside the tire business known as the General Rubber Goods (GRG) industry. Based on the success in the tire industry, Tyromer will introduce TDP into the general rubber product industry.
China Market
In March 2021, China unveiled its 14th Five-Year Plan (FYP) aiming to become the global leader in “low-carbon tech for a carbon-constrained world”. The FYP sets a 18% reduction target for “CO2 intensity” and 13.5% reduction target for “energy intensity” from 2021 to 2025.
The China Rubber Industry Association (CRIA) officially released its Development Plan for the Rubber Industry” in November 2020. Key emphases include independent innovation, intelligent manufacturing and products with new technologies. CRIA projects that by 2025 China will produce 704 million tires at least 70% is green.
Tyromer technology to China's tire and rubber industry
China is the largest rubber reclaiming country in the world, producing ~5 million MT which accounts for ~90% of global reclaim output, 90% of that is used domestically. Rubber reclaiming is a crude form of devulcanization in which chemical solvents and devulcanization chemicals are used to render vulcanized rubber elastomeric, results in increase tensile and elongation strength but rubber molecules damaged and dynamic properties needed for tire rubber lost. Giving that, chemical reclaim rubber is basically used only in general rubber products.
Chemical recycling is environment non-sustainable, and cannot reduce the annual importing of 15 million tons rubber compounds that Chinese tire manufacturers needed. Tyromer can help by transforming this huge industry into an environmentally sustainable chemical free rubber devulcanization industry, and provide a stable domestic tire rubber source to reduces its dependence on imports.
Market Size
Tyromer standard TDP production system has an annual production capacity of 4,500 tons, more than 1,000 systems are required to transform the entire chemical process industry. In addition, Chinese tire manufacturers consume about 15 million tons of tire rubber compounds every year, assuming 10% TDP is used as replacement, 1.5 million tons of TDP or more than 300 production systems will be required.
Market prospect
Regional Comprehensive Economic Partnership (RCEP)
RCEP is a free trade agreement composed of ten ASEAN countries plus China, Japan, South Korea, Australia and New Zealand, totally 15 countries aiming to establish a modern, comprehensive, high-quality economic partnership with common interests.
RCEP has a GDP of US$26 trillion, a trade volume of US$10.4 trillion, and a population of 2.2 billion, covering 30% of the global economy and population, ranking first in the global regional free trade agreement.
The implementation of the RCEP agreement reflects the integration of the Asian regional economy, which will accelerate the transfer of global production and procurement activities to Asia, and the development of manufacturing and international trade in Asia.
市场展望
Demand For TDP
- In February 2021, Bridgestone announced it will base the interest rate on its credit line on sustainability rating by third parties （https://www.bridgestoneamericas.com/en/newsroom/press-releases/2021/new-credit-facility#）
- In March 2021, Lanxess, a major synthetic rubber producer, announced its executive pay will be tied to achievement of its sustainability goals （https://lanxess.com/en/Investors/News-and-Events/News/2021/03/04/09/16/LANXESS-management-makes-sustainability-its-business）
- Michelin announced its goal to produce tyres with 80% sustainable material by 2048 （https://www.michelin.com/en/news/ambition-2048-tires-will-be-made-using-80-percent-sustainable-materials-and-100％-of-tires-will-be-recycled/ ）
Natural Rubber Supply
Global natural rubber market is worth about 300 billion baht, with Thailand accounting for about 30% . In 2021 Thailand exported rubber products worth 90 billion baht. During the same period, Thailand’s durian exports was worth 187 billion baht, and assuming 15% was spent domestically, the Thai durian crop was worth 220 billion baht. Another big rubber producing country, Malaysia, produced about 2/3 of Thailand’s durian in the same year, and the durian industry was worth about 145 billion baht.
These two traditional rubber producing countries have a combined market value of 365 billion baht in the durian market, far exceeding the total value of natural rubber in the world, which means that the planting of natural rubber is decreasing, the supply will continue to be tight in the future, and the price will continue to rise
BBC published an article on rubber and the potential shortage due to a variety of factors.
（https://www.bbc.com/future/article/20210308-rubber-the-wonder-material-we-are-running-out-of),
Continental Tire has invested in planting Russian dandelions
(https://www.continental-tires.com/car/about-us/media-services/taraxagum),
Bridgestone produces rubber from desert plant guayule
(https://www.bridgestone.com/technology_innovation/natural_rubber/guayule).
Waste tires represent a sustainable supply source of rubber because they will be generated regardless of weather or natural disease. TDP made from waste tires is the most reliable source of rubber for the tire and rubber industry. Using TDP (waste tire rubber) for tire production will:
- prevent deforestation for rubber cultivation to meet rising demand for rubber,
- enable the tire and rubber industry to migrate from the linear economy into the circular economy and
- provide a socially responsible, environmentally sustainable, and financially viable solution to fulfill the tire industry’s obligation on producer responsibility.
Tyromer Technology Asia Business Model
TTA targets to take the top 10% of the market at the first phase, taking a prudent and strategic approach to provide economic benefits and industry impact in the short term, vertical integration to improve total quality and financial growth in the medium term, and to open new markets and strengthen leadership position with superior new products in the long term.
Tyromer TDP production system is 100% self-designed and made in German, using a business model of licensing and direct operating. TTA’s sources of income include:
- Sales of TDP production systems;
- License fee from Licensee
- Sales of TDP for Licensee
- Manufacturing of TDP;
- Joint ventures.
Below is a 4 years financial forecast: (in USD)
| 2023 | 2024 | 2025 | 2026 | |
|---|---|---|---|---|
|
No. of License Sold |
5 |
10 |
15 |
15 |
|
Accumulated total |
5 |
15 |
30 |
45 |
|
Licensing Income |
– |
1,000,000 |
4,000,000 |
10,000,000 |
|
Royalty Income |
1,750,000 |
3,500,000 |
5,250,000 |
5,250,000 |
|
Sales Income |
– |
750,000 |
3,000,000 |
7,500,000 |
|
Manufacturing Income |
– |
– |
– |
1,298,000 |
|
Operating Expenses |
450,000 |
800,000 |
1,500,000 |
3,000,000 |
|
Profit Before Tax |
1,300,000 |
4,450,000 |
10,750,000 |
21,048,000 |
Notes to Forecast：
Profit on sales of system: 350,000 per set
License fee: 200,000 per set per annum
Sales fee: 150,000 per set per annum
Self-run manufacturer plant will start to generate profit in 2026
Participate in Tyromer Technology Development
Participate in Tyromer Technology Development
For further information please contact:
China Mainland：
Mrs. Cindy Zhou: 86-19928328223
Mrs. Anna Xiong：86-13902311997
or Email to：
info@tyromerasia.com
Official Website： www.tyromerasia.com