Need investments for expansion of tire recycling business

Sevastopol based small industrial manufacturing company which operates in the fast growing sector, in the tire recycling business, producing liquid and solid fuel, bituminous mastics and a pigment for paint and varnish industry.  In order to implement these growth plans the company requires equity funding in amount of US $ 250 000 for purchasing of new equipment.

During a year of work in the market the company has successfully managed to create the team, to become a profitable business and to win the leading position in the region mainly due to its ambitious and pragmatic owners. 

The current demand in the local regional market allows increasing the company capacity in more, then 2 times from 300 tons/year to 700 tons/year over the next year. In order to implement these growth plans the company requires equity funding in amount of US $ 250 000 for purchasing of new equipment. This project will also significantly increase the operational margin and return the investment within just 1 – 1.5 years.

The new equipment will also help the company to run additional processing
cycle to produce products with higher margin by:
• splitting low quality liquid fuel into fractions, which have higher price and
greater demand on the market;
• producing pyrocarbon for paint and varnish industry;
• extracting hydrogen from gas component.

In a year the founders plan to expand their activities to other regions with
high market capacity in tire recycling sector such as Odessa, Dnepropetrovsk
etc.

Describe Product or Service

Production overview:
• Recycling of polymeric and industrial rubber products (tires, disposable
syringes and other polymers)
• Production of liquid fuel (solvents, diesel, gasoline fractions) – it is used
for the manufacture of bituminous mastics as well as an energy source
and a substitute of black oil in the heating systems. The current production
capacity of the company is 12 tons of liquid fuel per month
• Processing of pyrocarbon (solid fraction, an analogue of carbon black) –
it is planned to use pyrocarbon in paint industry. At present, pyrocarbon
is used as solid fuel, an analog of coal
• Supply of scrap metal for metallurgical enterprises of Ukraine
• Production of bituminous mastics (based on the components of liquid
fuel) – the company sales the bituminous mastics through the network of
building material stores around Sevastopol and Crimea. In May 2011
sales was 800 kg.

Market

Target customers are transport enterprises, tire mounting workshops,
healthcare facilities, metallurgical enterprises and companies that use liquid
and solid fuels. The opening of ferry transportation with Turkey and Bulgaria
will increase the flow of freight transport, resulting to the increased demand
for the recycling of used automobile tires in the region. The company has
already established distribution channels in the region and loyal customers’
base. New production facilities will allow the company to sign long-term
agreements with large consumers.

Market overview. According to company executives and expert estimates, the annual market consumption of car tires in Ukraine was 4 – 5 mln unites during last 5 years. This produces over 180,000 tons of used tires. In 2008 and 2009 only 13,600 tons of used tires per year were disposed that was less than 10% of
real needs. The problem of recycling and processing used tires has a significant
ecological importance in Ukraine.

Competitive Advantage

It is also important to note that the company’s business solves environmental
issues and promotes ecological improvements in the region, fighting against
illegal dumps. The company has all necessary permits.

Next Steps

Press the Contact Now button to send and inquiry about the listing

• Save to Watchlist
• Share this listing: