FRP (Fibre Reinforced Plastic) Recycling - Manitoba 13 May 2009

1. FRP (Fibre Reinforced Plastic) Recycling - Manitoba 13 May 2009

2. Overview Background Information Recycling Processes for FRP Recycled Material Properties Possible Markets Business Model Options Conclusions Next Steps

3. Background Information FRP (Fibre Reinforced Plastic) scrap produced in large quantities across Canada Estimated that 700 – 800 MT/yr in Manitoba FRP trim and scrapped parts from production FRP in MB is glass reinforced thermosetting resin Cannot be melted and reformed as with thermoplastics Alternative recycling method is required Several unsuccessful attempts at developing recycling systems, based on two models: Regional recycling networks In-house recycling

4. Background Information Interest in finding solution for recycling from: Industry Government General public Potential economic and green benefits from recycling FRP Smaller environmental footprint Lower landfill costs Lower transportation costs to Landfill Possible revenue opportunities Project started in August 2008 to study potential FRP recycling solutions for Manitoba and Southern Interior BC

5. Background Information FRP Recycling Project – Milestones completed to date: Carried out research into FRP Recycling N.America/Worldwide Polled all FRP producers in regions, to obtain: Scrap Material Type and Quantity Cost of processing and landfilling scrap Obtained buy-in to the project from 9 of the 10 largest scrap producers in the regions Collected, sorted and ground their highest volumes of scrap Developed a business model and marketing database Analyzed all information and recommended further testing Currently: Organizing testing for next stage of project

6. Recycling Process Recycling Methods Available Combustion Fluidised Bed Process Pyrolysis Sub-Critical Water Hydrolysis Chemical Mechanical Energy Recovery Only Energy and Fibre Recovery Resin Oil and Fibre Recovery Fibre Recovery

7. Recycling Process • Down-selected Mechanical Processing • Most readily available process • Most cost effective to start up and run • Some proven use in FRP industry • Can be considered more friendly to the environment • No chemicals • No high temperatures • Low energy requirements

8. Recycling Process • Mechanical Processing Equipment

9. Recycling Process • 2 equipment suppliers selected • Fibre Recovery Products, Winnipeg • Seawolf Design, New Smyrna Beach, Florida • 13 samples of the highest volume scrap collected • 2 grades of fibres obtained from grinding • Coarse material using 1/4” screen • Fine material using 1/16” screen • Total of 52 recycled samples obtained for MB (and a further 44 from SIBC) • All samples were logged, photographed and bagged

10. Recycling Process • Mechanical grinding with screens Recycled Material Scrap Material 1/16” Screen Fine Grind Coarse Grind 1/4” Screen

11. E-1 F-1 G-1 H-1 I-1 F-2 G-2 H-2 I-2 F-3 H-3 I-3 H-4 Recycled Material Properties • Sorted by Type Discrete Fibres Non-discrete Fibres / Low Quality Fibres No Fibre Content Scrap collected represents over 80% of FRP waste generated by MB companies

12. Markets Thermoplastics Cement Products Thermoset FRP LEED Building Products Asphalt

13. Markets • Other specific uses for recycled FRP Countertops Noise absorption material Viscosity modification of polymer mixes Hardwearing additive for road paint Recyclate and natural fibre mat material Blast medium for removing paint Wall/floor coverings Plastic wood products Roofing shingles Roofing asphalt additive Parking stall curbs Construction barricades Temporary traffic barriers Vinyl siding additive Tooling material additive Insulation material Flow medium Aerating material Patio stones Garden ornaments

14. Markets Cement Additive Benefits: Proven plastic shrinkage reduction in Europe Large/very large volume market and varied products Encapsulates material so safer for future generations Can handle varied/imperfect materials and filler/resin/fibre mix Competes with value added products that charge a premium Risks: Cement degradation due to alkaline attack on glass fibers  possibility of leaving voids over time Supply too low for certain markets Need to certify material before any widespread use

15. Markets Thermoplastic Additive Benefits: Short fibres provide slight reinforcement Thermoplastic market is mostly unreinforced  property gains Process improvements demonstrated in Europe Medium to large market and varied products Can use short fibers and filler at high % loadings (30%+) Low risk of adverse chemical reactions with recycled material Risks: Surface quality of thermoplastic is reduced  limits market Lower value use of material than cement

16. E-1 F-1 G-1 H-1 I-1 F-2 G-2 H-2 I-2 F-3 H-3 I-3 H-4 Markets • Preferred Applications Cement Thermoplastics Flow Medium

17. Markets • Scrap Quantities by Market (Metric Tonnes/Year) Note: Quantities assume 50% of recyclate is pure fibre  remaining is resin/filler

18. Business Model Options Assumptions for setting up FRP Recycling Mechanism Manufacturing companies are willing to pay the recycling company equivalent external costs per MT (transportation and tipping fees) Material price (conservative) and volumes (min/max) used are per table below Loan servicing and financing have not been taken into account Amortization, interest and taxes have not been analyzed

19. Business Model Options Standalone Recycling Facility Thermoplastic Company FRP Company $ Short Fibre/Filler Shredder / Grinding Equipment Standalone Recycling Facility $$$ $ Holding Bin $ Long Fibre/Filler Cement Company

20. Business Model Options Standalone Recycling Facility CM = Contribution Margin CMR = Contribution Margin Ratio

21. Business Model Options Standalone Recycling Facility Breakeven MT = > 450 MT / year Breakeven Revenue = $ 550,000

22. Business Model Options Shared Recycling Facility Thermoplastic Company FRP Company $ Short Fibre/Filler Shredder / Grinding Equipment Shared Recycling Facility $$ $ Holding Bin $ Long Fibre/Filler Cement Company

23. Business Model Options Shared FRP Recycling Facility CM = Contribution Margin CMR = Contribution Margin Ratio

24. Business Model Options Shared FRP Recycling Facility Breakeven MT = 345 MT / year Breakeven Revenue = $ 281,484

25. Business Model Options Preferred Option: Shared recycling facility Offset low volumes/downtime with another business that has facility space Existing recycling company Manufacturer Low set-up costs for someone to start FRP recycling Possible government grants/subsidies Potential for high revenue if material can be sold as a value added product Reinforcement material Green material

26. Conclusion FRP Recycling is technically feasible Proven uses in Europe However, technical risks  testing required to verify FRP Recycling has a market Cement and thermoplastics are preferred However, more markets are possible in the future FRP Recycling has a feasible business model Facility likely needs to be shared with another business However, good revenue stream could be possible

27. Next Steps Testing Initial testing with cement and thermoplastics – Jun/July 2009 Increase awareness of FRP Recycling Obtain support from industry/government/academia Develop relationships inside and outside Manitoba Investigate post consumer scrap (boats, canoes, tanks, etc) Develop business model and marketing data further Carry out a technology demonstration – Sep/Oct 2009 Develop Commercialization Plan for recycling – Dec 2009

28. CONTACT INFORMATION THANK YOU Will Darracott M.Eng Engineer, Composite Applications EIT CIC Contact Information: Website: www.compositesinnovation.ca Email: wdarracott@compositesinnovation.ca Tel No.: 204-262-3400 x208