Pyrolysis is a
continuous
depolymerization process that heats shredded tires in the
absence of air and converts the shreds into oil, carbon black, steel
and gas as
marketable commodities.
Our research and market analysis cast a new light on tire
recycling. It is now affordable to
buy shreds as raw material from shredding companies if, for some
reason, whole scrap
tires were not available. At the least, the profitable recycling
of scrap tires is not dependent
on tipping fees.
A typical four-reactor plant will employ 39 skilled and professional
full-time people. The tire
recycling equipment operates 24 hours per day, seven days per
week. The pro-forma is
attached. The numbers are conservative and assume 80% uptime for
a plant.
It takes a population of 3,000,000 people within a 300-500 mile radius
of a plant to
supply scrap tires. The basic information is as follows.
Plant capacity is 4 tons/hour
(400 tires/hour). The payroll requirements are 39 people.
The plant equipment cost is $10.6
million. It will have annual net operating profits of $15.7 million.
In addition to the $8.64 million investment in plant processing
equipment, plant facilities
require a 5-10 acre site, fencing, truck scales, office and plant
building, air and waste
disposal permits, utility services to the site, working capital and so
on. A generalized cost
estimate for these additional items is approximately $13.7 million.
For an estimated total investment of $22.4 million, a plant will earn
an internal rate of
return of 60% based on a 12 year life. Cash on cash payout is 20
months.
The SEC PV 10 for a plant is $92.0 million.
FRT guarantees the design and operation of its equipment to meet
quality and quantity
specifications. This coverage
is through a national insurance
company in the
amount of $50,000,000.00 per
plant.
Lead time to build a plant is six months; this normally allows
sufficient time for site specific
improvements, including permits, to be done.
The commodities are easily transported by truck; strong markets exist
throughout the
United States. The world wide demand for rubber products is
growing at the rate of 3.5%
annually.
The payment schedule for the 4 tons/hour capacity plant equipment is
30% with purchase
order, 30% due 30 days after the purchase order date, 30% due 60 days
after purchase
order date, 5% to be paid when plant is tested for production capacity
at manufacturer's
facility. The remaining 5% is paid when plant is accepted at permanent
location.
A suitable performance bond can be provided, to support the engineering
and construction at
the plant site with a turn-key installation. Through two of our
affiliated design/construction
team members, C.H. Guernsey & Company and Scott Guernsey Solutions,
L.L.C., all site
related work can be bonded within their $80,000,000
limit.