TBAP Business Assistance Industry Trends TBAP Industry-Wide Projects

1. CIWMB Tire-Derived Business Assistance Program ANNUAL REPORT TBAP Business Assistance Industry Trends TBAP Industry-Wide Projects

2. The TBAP Program • Goal: Strengthen Scrap Tire Recycling Infrastructure and Expand Market • Business Assistance • Industry-Wide Assistance Projects • The Team • Managed by Board Staff + Prime Contractor • DK Enterprises, Tinney Associates Key Partners • 30 Additional Subcontractors • TBAP Contract #1 (R.W. Beck - Prime) • March 2006 – April 2009 • 29 Businesses Assisted • 7 Industry-Wide Projects • TBAP Contract #2 (Manex - Prime) • August 2008 – May 2011 • One Business Assistance Cycle – Tentative Due Date: April 16, 2009 • 7 Industry-Wide Projects

3. Location of the 29 TBAP “Grantees” Blue = 7 Processors Red = 22 TDP Firms

4. Range of Products Graphic Courtesy DK Enterprises

5. Individual Business Assessment Synopsis • Dynamic, Driven & Diversified Small Businesses • Classic Small Biz Challenges • Drive for Rapid Growth • Cash Flow Crunch • Opportunistic vs. Strategic Decisions • Developing Operational and Financial Systems • Added Twists • Green Marketing Orientation • Role of Government Programs & Policies • Wide Range of Assistance Needs (and Competing Priorities)

6. TBAP Business Assistance Delivery($3.14 million, 29 Firms)

7. Case Study - Modular Rubber Drains

8. Modular Rubber Drains • Objective • Product Development and Spin-Off Venture • Assistance • Feedstock Sources and Partnerships • Product Testing • Specification Development and Govt Sales Assistance • Website and Marketing Materials • Results • Thriving and Growing Firm

9. Case Study - Rubber Trails & Surfaces

10. Rubber Trails & Surfaces • Objective • Expand CA Operations and Product Line & Increase Sales • Assistance • Feedstock and Partnership Strategies • Product Testing • Green Building Marketing Plan • Production Equipment • Results • In Progress; Thriving Company with Growing CA Presence

11. Case Study: Holz Rubber

12. Holz Rubber • Objective • Incorporate Recycled Rubber in Long-Standing Product Line • Assistance • Feedstock Sourcing • Production Efficiency • Market Analysis and Assistance • Results • Incorporation of Recycled Tire Rubber in Range of Products

13. Case Study: Closed Loop Networking Showcase for Walmart and Sam’s Club Buyers

14. Closed Loop Networking Showcase for Walmart and Sam’s Club Buyers Objective Provide Access to Big Box Retailer Sales Opportunities TBAP Assistance Connection 11 CA TDP Firms Participated (7 TBAP Grantees) Funding for 2 TBAP Firms Provided DK Enterprises Developed and Organized (80 Exhibitors) Results Experience Showcasing Products to Worlds Largest Retailer Contacts / Sales Leads with Buyers, Merchants, and Suppliers

15. Business Assistance Accomplishments • Tangible, Targeted Services Delivered • Partnerships Facilitated • Cohesive Team Approach • Continual Program Improvement • Strong Demand Expected for Next Assistance Cycle in April 2009

16. CA Scrap Tire Industry Overview

17. CA Scrap Tire Uses (2006)Total = 44.4 million PTE Source: CIWMB

18. Tire-Derived Product Trends • Reuse and Retread • Holding Steady • Ground/Crumb Rubber • Growth Since 2006, Holding Strong • RAC, Turf/Athletic Fields, Mulch/Bark Driving Demand • Very Active Sector • Civil Engineering • Landfill Applications Steady • State Supported Projects Growing

19. TDP Trends (Continued) • TDF • Increases likely since 2006, recent short-term slow down • Landfill and ADC • Sustained Use with Some Market-Driven Variability • Export • Exports to China surged since 2006, recent abrupt halt

20. Broad Market Trends • Dynamic, Changing Industry • Demand-Driven • Partnerships and Processor Capacity Adjustments • Items to Watch • Public Perception of Health Concerns • State and Local Government Budgets • National Expansion of 40+ Fine Grind (Not Yet in CA) • Increasing Focus on Mainstream Manufacturing Markets & Big Box Retail • Global Economic and Financial Impacts & Uncertainties • Scrap Tire Generation • Product Demand • Export Demand • Oil and Commodities Prices

21. Scrap Tire Recycling Barriers • Need for a Strong Supply Infrastructure • Business-Specific Barriers • Access to Quality Supplies at an Acceptable Price • Lack of 40+ Fine Grind Capacity in CA • Permitting/Storage Concerns

22. Barriers (Con’t.) • Need to Facilitate TDP Sales in Some Areas • Low Customer Awareness and Understanding of Product Advantages • Challenges Leveraging Government and Green Initiatives • Need to Expand and Diversify TDP Markets • Need for Market Information

23. TBAP Industry-Wide Projects • Co-Organized International Tire Conference (May 2008) • Facilitate TDP Sales • Address TDP Barriers and Myths (Literature Review Complete; Analysis Begins 2009) • Govt and Green Building Sales Training (Held May 2008 & TBA) • Quality Control Training (Held May 2008 & TBA) • Cooperative Marketing (Begins 2009)

24. TBAP Industry-Wide Projects (Con’t.) • Expand and Diversify TDP Markets • Feedstock Conversion – Target Mainstream CA Rubber and Plastics Manufacturers (Ends April ’09) • Construction Product Database Pilot Project (Ends April ’09) • Retailer and Manufacturer Supply Chain Outreach (Begins 2009) • Improve Market Inefficiencies (Begins Now) • Provide Up-to-Date Market Information • Supply-Demand Inventory (Nov 2008) • TDP Market Analysis (March 2009) • TDP Market Analysis Update/Program and Strategy Review (Oct 2010)

25. Ed Boisson RW Beck (415) 499-0919 eboisson@rwbeck.com www.rwbeck.com Denise Kennedy DK Enterprises (916) 480-0443 denise@dkenterprises.us www.dkenterprises.us Questions?