Waste Tire Situations and Markets in California

1. Waste Tire Situations and Markets in California Denise Kennedy, DK Enterprises CIWMB Waste Tire Forum Sacramento, California – March 9, 2006

2. Tire and Rubber Recycling Advisory Council (TRRAC) andthe Tire Industry Association (TIA) • Working group of recycling professionals • marketing, processing, collection, crumb rubber and manufacturing • one government liaison and advisor to TRRAC/TIA • Represent 5000 members in the Tire Industry Association • tire dealers and retreaders • commercial and retail markets • recyclers and suppliers • TIA’s history of services include government representation; training, education and certification; educational seminars and workshops

3. Tire and Rubber Recycling Advisory Council (TRRAC) • Mission: Ensure long term viability of tire and rubber recycling worldwide, while pursuing economic and environmental benefits • Goals: To address the unique needs of the rubber recycling segment of the international tire industry and • Promote the reuse and recovery of tires and tire derived materials • Increase marketability of rubber products and applications • Promote industry’s legislative, judicial and regulatory issues • Provide educational, training, and networking opportunities

4. Tire and Rubber Recycling Advisory Council – Representatives • Charles Astafan Columbus McKinnon Florida • Doug Barr Barr Formulated Products Pennsylvania • David Forrester Tires Inc. of Florida Florida • Dick Gust Lakin Environmental Industries Illinois • Denise Kennedy DK Enterprises Sacramento • Allan Lassiter Virginia DEQ Virginia • Monte Niemi First State Tire Disposal Minnesota • Tom Secor Durable Corporate Ohio • Mary Sikora Recycling Research Virginia

5. Marketplace – March 2006 RB Rubber Products NW Rubber (Canada) TD&R WRW WTP Utah Tire Recyclers WTP TRI-C WRW Golden Scrap Tire Shamrock West Coast Rubber Socal/NorCal Break GreenMan BAS USMX Lakin McClanahan TDF CRM CB Tyres CRM

6. California Statistics US Census Bureau No. of Generators Haulers 2004 Population Counties W/ TPID’s W/Permits Southern 21,378,000 10 5,950 799 Northern 14,425,800 46 6,250 387 Total CA 35,803,800 56 12,200 1,186

7. Waste Tire Uses

8. Canvassing Barriers in California 1 • Different dynamics between northern and southern California • Geographic proximity does not mean tire and product availability • Shortage of facilities in southern California that have equipment and capacity to handle the quantity of tires that currently go to the landfills

9. Canvassing Barriers in California 2 • Tire processors compete with facilities and landfills that charge low tipping fees • Technology and markets must be supported by supply of tires • Subsidies by other states and countries influence collection, product and disposal

10. Canvassing Barriers in California 3 • Generators, facilities, and registered and unregistered haulers of scrap and used tires that bypass the regulated system impact pricing and market share • Overregulation penalizes the businesses that abide by regulation • Enforcement activity of the unregulated players is limited

11. Canvassing Barriers in California 4 • Difficult for many of the businesses to balance tire flow, seasonality, markets, and money • Insufficient and sustainable markets require overcoming market barriers

12. Canvassing Barriers in California 5 • Research and development may be cost prohibitive • Education, advertising and marketing campaigns may not be cost effective • The cost of processing, manufacturing, equipment, land, and facility expansion capabilities impact decision to build business

13. Canvassing Barriers in California 6 • Lack of industry standardizations impacts ability to expand technology and market development • Definitions and language • Industry weights and measurements (being prepared by the RMA & RCC) • Material Survey Data Sheet (MSDS) • Testing Certification

14. 7 Canvassing Barriers in California • Interstate transport is market driven and cannot be controlled or regulated by state or local government • Impact of tires and feedstock being imported and exported can effect the balance of markets • Industry wants confirmation of authenticity of origination using California tires in CIWMB grant process

15. Canvassing Barriers in California 8 • Rubberized Asphalt Concrete growth is limited by understanding, education, and dollars • Board to review the importance TDF plays in diverting 20% of the tire flow in California and impact if divert tires away from facilities • Storage requirements for long term civil engineering applications projects using TDA are not always feasible

16. Canvassing Barriers in California 9 • Business Issues: • Workman’s compensation • Other insurance costs • High energy costs • Low-cost overseas rivals • RCC and EPA – will these programs help or hinder growth in tire recycling • Air quality • Transportation costs

17. California Waste Tire Activity 1 • Grants will influence amount of income to processor, manufacturer and/or supplier • Focus on expanding existing ground rubber markets • Focus on developing civil engineering projects • Support TDF markets as they will continue to grow on their own

18. California Waste Tire Activity 2 • Place more emphasis on research and development • Grant selection options in Five Year Plan • Utilize government programs to promote recycled materials including updating web pages

19. California Waste Tire Activity 3 • Companies buying other businesses • Jump start businesses with BAP • Provide business development, technical assistance, marketing assistance and product testing and certification

20. California Waste Tire Activity 4 • Utilize resources of the RMDZ • Provide technical assistance • Assist with marketing to state agencies • Promote recycled content • Assist with site location • Link businesses with public agencies • Utilize expertise of the RCC

21. Contact Information Denise Kennedy DK Enterprises 3323 Watt Avenue, Suite 298 Sacramento, CA 95821 PH: (916) 480-0443 FX: (916) 480-0386 MB: (916) 804-0931 denise@dkebusinesses.com www.DKEbusinesses.com