WAPAKONETA, Ohio (June 30, 2009)—A growing shortage of post-industrial scrap rubber in the industry has created a quandary for companies like Midwest Elastomers Inc.
The 30-year-old rubber recycler has been negatively impacted by the poor economy and part of its business is down.
“We grind rubber that goes into tires,” said Sales Manager Evan Piland, “and that part of the business is off.”
On the other hand, the company's auto aftermarket segment is thriving. But it's difficult to get enough post industrial scrap rubber to meet customer demand, he said. “It's feast or famine at the moment.”
In addition, the company needs EPDM and SBR, used in the construction of running track and playground safety surfaces, which are good businesses for MEI.
Piland said the company has customers in other segments—including brakes, paint and plastics—that continue to have a need for nitrile, which MEI converts to a high-quality rubber powder.
Running tracks may use 270,000 pounds of rubber, he said, so the scrap rubber needs to be thick enough to make uniform particles. The company won't know how strong the running track and safety surface market will be for about a month.
“Availability of rubber feedstock scrap trickles down from the automotive and industrial rubber markets and they are soft right now,” Piland said. “We are having difficulty getting qualified EPDM, natural, nitrile and neoprene rubber to service markets that are doing OK.”
The company started feeling the pinch in September and October. By January and February, the Wapakoneta-based recycler was having great difficulty finding the post-industrial scrap rubber it needed to produce a variety of offerings, such as tracks and playground safety surfaces.
MEI works with post industrial rubber scrap from rubber manufacturers, Piland said, but doesn't use post-consumer scrap rubber.
“In a good year, MEI will process 30 million to 40 million pounds of rubber for a wide range of applications,” he said.
“As we all know, automotive and industrial markets are soft this year. That means there are a lot of rubber molders and extruders not making products and generating a waste stream of rubber scrap.”
He anticipates the firm will process between 20 million and 25 million pounds this year.
MEI also toll grinds rubber for companies looking to save money by recycling their rubber scrap back into their products, Piland said.
Years ago, toll grinding of recycled rubber was done for tire makers because they could justify truck load quantities, according to Piland.
“Now, many companies send their rubber to us to toll grind for them. It's the best match for their products to be used as low-cost filler.”
While MEI primarily has worked with truck loads of ground rubber, it has expanded that segment to include half truck loads and smaller quantities, according to Piland.
“It's always been a strong part of our business,” he said. “Now we're trying to set up for the smaller companies. We can handle 5,000 to 10,000 pounds at a time for small molded rubber companies.”