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1) Synopsis of First Cycle Assessments 2) Overall Industry Status

Get insights from the first cycle assessment including industry status, identified needs, financial performance concerns, and recommended assistance packages. Discover challenges faced and approved assistance. Learn about the dynamic small businesses, operations, marketing strategies, and financial performances.

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1) Synopsis of First Cycle Assessments 2) Overall Industry Status

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  1. CIWMB Tire-Derived Business Assistance Program 1) Synopsis of First Cycle Assessments 2) Overall Industry Status

  2. I. Synopsis of First Cycle Assessments • Goals and Process • Evaluation Results • Conclusions

  3. Assessment Goals • Evaluate Assistance Requests & Needs • Independent, Objective Feedback • Consensus on Assistance Package

  4. Cycle 1 Assessment Process

  5. Cycle 1 Assessment Process (Con’t)

  6. Assessment Report Contents • Business Overview • Assessment Results • Management Team • Strategy • Operations • Marketing and Sales • Financial Performance • Conclusions • Identified Business Needs • Recommended Assistance Package

  7. Location of Cycle 1 Applicants Blue = Processors Red = TDP Firms

  8. Cycle 1 Applicant Overview –Types of Firms * Preliminary based on CIWMB Web Site and Other Sources.

  9. Processors Reused Tires Ground Rubber Raw Material Supplier for RAC, Molded Products, Turf, etc. Colorized Bark Equestrian Applications Molded Products TDA – Landfill Apps ADC TDP Firms Molded Products Commercial Flooring Products Retail Mats Traffic Safety Products ADA Compliant Transitions Rubber Drains Rubber Sidewalks Pour-in-Place Surfaces Spray Applied Surfaces Dock Bumpers, Wheel Chocks Cycle 1 Applicant Overview – Examples of Products

  10. Cycle 1 Applicant Overview –Size of Firms

  11. Overview of Cycle 1 Applicants (Con’t) * Based on a sample of 13 applicant firms analyzed.

  12. Assessment Synopsis • Dynamic, Driven & Diversified Small Businesses • Classic Small Biz Challenges are Common: • Pervasive Cash Flow Challenges/Drive to Grow Quick • Moving from Opportunistic to Strategic Decision Making • Establishing Information and Management Systems • Added Twists: • Reliance on Tip Fee Revenues • Significant Role of Government Programs & Policies • Distinct Dynamics for Processors and TDP Firms • Some Critical Financial Performance Concerns • Range of Clear Business Assistance Needs (and Competing Priorities)

  13. Management Teams • Tenacity, Drive, Passion (All) • Well-Defined Roles, Decision Making Authority (Most) • Core Management Competencies Covered (Many) • Strategic Approach vs. Bootstrapping (Some) • Sufficient Information Systems to Guide Management Decisions (Some)

  14. Business Strategy • Articulation of Measurable Short and Long-term Strategic Goals (Some) • Sustained Adherence to a Documented Strategy Across Company Operations (Few) • Strategy Explicitly Based on Documented Market and Business Information (Few)

  15. Operations • Use of Well-Established Equipment and Technologies (Most) • Use of Highly Specialized or Proprietary Processes (Some) • Advanced Equipment Development & Maintenance Capacities (Some) • Closely Monitored, Optimized Production System (Few)

  16. Marketing • Marketing Efforts Driven by a Documented Strategy (Some) or Verbal Strategy (Many) • Effective Marketing Materials Well-Suited to Customer Needs (Some) • Effective, Well-Developed Sales Channels Sufficient to Achieve Goals (Some) • Well Developed, Compelling Articulation of Firm and Product Identity Relative To Competition (Few)

  17. Financial Performance • Steady or Increasing Sales (Many – Overall trend positive) • Profitability (Mixed – 40% show negative income before taxes*) • Favorable Financial Performance Statistics (Some but many warning signs – 30% theoretically tenuous vitality based on z-score*) • Adequate Financial Accounting Systems and Consistent Reporting (Few) * Based on a sample of 10 applicant firms analyzed.

  18. Conclusions – Barriers to Addressing Identified Needs • Time • Money • Competing Priorities & Opportunity Costs • Lack of Internal Consensus on Priorities • Gaps in Available Expertise and Experience

  19. Conclusions – BAP Cycle 1 Approved Assistance ($1.8 million)

  20. Conclusions – Accomplishments • Cohesive Consultant-CIWMB Team Approach • Efficient Assessment Process • Administrative and Mgt Procedures In Place • Assistance Deployment Just Beginning • Refining An Innovative New Approach: Verified Need; Tackling Implementation Challenges

  21. Conclusions – Challenges and Adjustments for Cycle 2 • Reduce Time to “Notice to Proceed,” and Set Achievable Expectations • Separate Assessment and Assistance Assignments to Address Perceived Consultant Conflict of Interest • Refine Assessment Process • Bottom Line: Foundation of Program is Trust

  22. II. Overall Industry Status • Supply Trends • Demand Trends • Conclusions

  23. Approx. CA Scrap Tire Uses (CIWMB) Note: Based on CIWMB Data. Incorporates imports of 1.5 million PTE.

  24. Supply Trends • Increasing Competition For Scrap Tires – “Zero Sum Game” • Reuse Holding Steady • Tires Moving to GR, TDA (Landfill Apps) and ADC As Demand Dictates • TDA (Non-Landfill) Impact on Supply Infrastructure Viewed as Uncertain

  25. Supply Trends (Con’t) • Increasing Competition For Ground Rubber Supply (Seasonal Tightening) • Increasing GR Capacity Utilization & Planned Expansions • Ground Rubber Supply Growth Driven by: • RAC • Turf • Bark/Mulch • Pour-in-Place Surfacing Products

  26. Demand Trends – Molded Products • Mostly Small Firms, Some With Large market Opportunities • Ever-Diversifying Range of Products • Demand Drivers Vary: • Clear Price, Performance and/or Other Advantages • Government Grants, Purchase Preferences, Regulations • “Green Marketing” Niche • Barriers: • Market Acceptance and Awareness • In Some Cases, Comparative High Initial Cost • Unpredictable Government Policies and Implementation • Access to Ground Rubber Supply • Business Barriers

  27. Demand Trends – Rubberized Asphalt Concrete (RAC) • Sustained, Significant Caltrans Use Expected • Expected Flat Caltrans Demand Next Year • Apparent Growth in Local Gov’t and Private Demand, Uncertain Projected Demand • Drivers: Product Performance, Noise Reduction, State Legislation, CIWMB Grants, Technical Assistance & Promotion • Barriers: Customer Acceptance and Familiarity; Initial Cost Gap, Supply Challenges;

  28. Demand Trends – Synthetic Turf • Strong Demand Sustained Nationally • Large Network of Installers, Small Number of Dominant Players • Drivers: Performance, Price • Barriers: Uncertain Long-Term Demand Projections

  29. Demand Trends – Pour-In-Place Surfacing Products • Strong Demand Sustained Nationally • Large Network of Marketers, Installers • Drivers: Performance, CIWMB Grants • Barriers: Customer Awareness and Acceptance; Ability to Document Product Advantages

  30. Demand Trends – Bark/Mulch Products • Steady Demand, Increasing Number of Producers • Wide Range of Sales Channels: • Direct to Landscapers, Schools, Etc. • Broker/Dealers • Retail • Drivers: Performance, CIWMB Grants • Barriers: Customer Awareness and Acceptance; Ability to Document Product Advantages; Competing Products/Critics

  31. Conclusions – Key Issues Is there a GR supply shortage? Processors: “No.” TDP Firms: “Yes.” Terms tightening. How are supply challenges being addressed? Producer and customer storage. Adjusted ordering and delivery practices. Planned increases in capacity.

  32. Conclusions – Key Issues Are there enough scrap tires to feed GR expansion? Most Stakeholders: “Yes.” Will strong TDP demand be sustained over the long-term? Most stakeholders: “Not worried now.”

  33. Conclusions – Market Needs • Sustained Long-Term Growth in GR Demand • Enhanced Customer Awareness and Acceptance of TDP Benefits • Reliable, Comprehensive Market Data, Including Trends, Barriers and Projections • Predictable State Policies • Bottom Line: Dynamic, Entrepreneurial Market Place Will Continue to Evolve

  34. What is the BAP Niche? • Complement Other Board Efforts • Address Documented Industry Needs • Active Support by Key Participants & Beneficiaries • Clear Potential for Success

  35. Proposed Industry-Wide Activities

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