July 21, 2014 Issue
The Most Powerful Name In Corporate News and Information
Solvent-Free Devulcanization Technology for Scrap Tire Reuse
Tyromer Inc. (www.tyromer.com)
is a University of Waterloo startup created for the commercialization of a
chemical solvent-free rubber devulcanization technology. While the
technology can be used in the devulcanization of a wide variety of rubber,
Tyromer focuses on the devulcanization of rubber from scrap tires because
scrap tires pose a global problem desperately needing an environmentally
sustainable and financially viable solution. To provide a perspective, we
generate about 350 million scrap tires every year in North America alone,
and about half of them are burned for their energy content.
295 Hagey Blvd, 1st Fl.
Waterloo, Ontario, Canada
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – July 21, 2014
CEOCFO: Dr. Visaisouk, what is the concept at Tyromer?
Dr. Visaisouk: It is very simple. There is a lot of rubber in the billion scrap tires generated globally every year, and to date that has not been an economical way to recycle this rubber. Managing scrap tires is still a major problem for the US, Canada, the EU, and it will be for China and India in the future. You can see archived pictures of mountains and mountains of scrap tires. Governments have used grants, subsides and incentives to reduce scrap tire stockpiles. Just to prevent further stockpiling to reoccur, we burn 50 percent of all scrap tires, which is half a billion tires globally. Tyromer has a patented and industrially validated technology that devulcanizes rubber, without using chemical solvents. Our focus is to apply this technology as a solution to the global scrap tire problem. Tyromer is not a scrap tire recycler. It is a material manufacturer which uses rubber crumb from scrap tires as a feedstock to produce a rubber in an elastomeric form that can be reused as rubber for the manufacturing of tires or other rubber goods.
CEOCFO: How does it work?
Dr. Visaisouk: Rubber, in its natural state, is soft, squishy and sticky. It is no good for making tires. Mr. Goodyear invented a way to make rubber that is rigid, tough and durable so it can be used to make tires. Imagine rubber molecules as wet noodles. They slip and slide against each other, so they have no rigid form. What Goodyear did was to use sulfur to bridge those rubber molecules, so those noodles are fixed in a rigid framework that makes them rigid and strong. Unfortunately, Goodyear did not invent a way to reverse his process. Reverting rubber to its usable state is called devulcanization. The Tyromer devulcanization technology uses supercritical carbon dioxide in combination with shear force to preferentially break the sulfur bridges, thereby freeing most of the noodles from the rigid framework so they can slip and slide against each other again.
Mr. Visaisouk: Professor Costas Tzoganakis at the University of Waterloo uses supercritical carbon dioxide to swell the rubber. In swelling, the bridges between the noodles are stretched extensively so they can be preferentially broken by the shear force inside the extruder environment. In practice, you feed rubber crumb into an extruder in the presence of supercritical carbon dioxide, and in one minute, the devulcanized rubber comes out. The process is continuous and converts 99% of the feed into product. While the product is not totally devulcanized like virgin rubber, it is good enough to be used in whole or in part, depending on the application.
CEOCFO: Have you licensed the technology or do you own the technology?
Mr. Visaisouk: We licensed the technology exclusively from the University of Waterloo. The university took the initiative of starting Tyromer for the commercialization of the technology.
CEOCFO: Where is Tyromer today in the process?
Mr. Visaisouk: We are just about to build a production plant. We have a customer now that will buy everything this plant produces. We will use this production plant as a template for setting up future plants. Scrap tires and rubber crumb from the scrap tires are widely distributed. It does not make financial sense to ship them to a central place for devulcanization. Devulcanization plants can be set up close to the feedstock. Our business model is to operate joint ventures in North America, which is close enough for us to service and support. In the rest of the world, we will license the technology.
CEOCFO: What is involved in setting up a plant?
Mr. Visaisouk: There are very few considerations because we do not use chemical solvents. Any rubber crumb producer or rubber compounder would be an ideal partner. We can place our manufacturing system, which is essentially an industrial extrusion line, at the end of a rubber crumb production line or inside a rubber compounding facility. How much space do we need? About 50 feet long, 20 feet wide and 25 feet high. This production line, if run on a 24-hour basis, will produce about six million pound a year. It can also be a stand-alone operation.
CEOCFO: When will the first test be ready?
Mr. Visaisouk: We have done all the scale up with an equipment manufacturer in a pilot plant, and right now we are beginning to build a production plant in Waterloo. However, we already have a licensee in the EU, and they are building their production facilities.
CEOCFO: Do you find a greater interest in one part of the world over the other?
Mr. Visaisouk: Our experience is that there is more serious interest from the EU. But then we really have not promoted our technology aggressively in North America because the problem we solve is an old problem that had many failed attempts at a solution. Senior management and veterans in the rubber industry have a lot of skepticism about devulcanization. Until we cross all the T’s and dot the I’s, it is very dangerous for us to go out and promote our technology. Luckily, we work with a large rubber compounder that is very well known in the industry.
CEOCFO: How were you able to get them to believe?
Mr. Visaisouk: I was lucky. This company is within five miles of our campus, and I engaged them from the beginning. I went to them and said we needed help and that it was potentially a very important innovation for their business. The technical people believed me, and they helped us develop the product. When you have a technology, you can go in any direction. It is important that you have an industry expert lead you into the market. This is the critical collaboration that I spoke of earlier. Through collaboration, we defined what the industry needed and developed the product to address that need. That is what we did the past three years. Again, it demonstrates that strategic collaboration is critical for introducing innovation.
CEOCFO: It sounds like this is not your first time around the track. What have you learned from previous ventures that has been most helpful for you with Tyromer?
Mr. Visaisouk: I think timing is really important. In my earlier life, I was very proud of being ahead of the curve and paid for it every single time. I had to spend too much time convincing people. The Tyromer concept is not ahead of the curve. The problem is too well known and the legacy of unmet promises in devulcanization has created negativity that first had to be overcome. I knew that a strategic collaboration with a major industry partner was vital. Because the scrap tire problem is so big, and our technology, if validated and implemented, can make such a big impact in the world we live in, I was able to create a compelling story that many people believed in and they wanted to help. It is easier to sell innovation that impacts society as a whole because people feel good about it. So far we have received tremendous help from major corporations and tech players just because everybody feels that we are doing the right thing. That makes my job very easy this time. Beyond being a good business, we feel good about it and other people feel good about it. Tyromer is one of those technologies.
CEOCFO: Were you looking for this type of technology or did it just come up as an opportunity?
Mr. Visaisouk: I work for the University of Waterloo as its Entrepreneur in Residence, and my job is to look at inventions we have within the university and decide which one could support a business. I was lucky this one was there. It is good technology with patent protection in North America, and it solves a big problem. I am confident what we do will be appreciated by governments, industry and the general public.
CEOCFO: Why not? It sounds like everybody wins.
Mr. Visaisouk: That is why we took a chance and we started this company. As I said, there is a lot of skepticism in the rubber industry, so we had to be very quiet the last three years making sure we had a product that we could bring out and people would say wow, I believe it now. It works.
CEOCFO: Tyromer was a TiE50 winner. Would you tell us about that?
Mr. Visaisouk: The TiE organization was started in Silicon Valley by successful Indian entrepreneurs, and it hosts a big conference every year called TiEcon. They promote new technology, entrepreneurship, and investment and venture capital. A major event at TiEcon is a competition for top startups in the world. This year, about 3,000 companies applied and they were narrowed down to 100 finalists in five industry sectors. Tyromer was one of those in the clean tech sector. After we gave our presentation at TiEcon, we were selected as a TiE50 winner. That means the TiE leadership considers us one of the top 10 clean tech startups in the world. The TiE organization is global and has tremendous influence in cutting edge technology and venture financing, and their recognition is very reassuring to us that we are doing the right thing. This is important because pushing innovation can be a lonely business.
CEOCFO: Why does Tyromer standout?
Mr. Visaisouk: Tyromer addresses the global scrap tire problem in a fundamental way. Our method to devulcanize scrap tire rubber is socially responsible, environmentally sustainable and financially viable. We offer a “Best Practice” for global scrap tire management and will work with scrap tire management agencies to implement our technology. For the first time, massive quantities of rubber from scrap tires can be recovered without resorting to government subsidies and incentives or environmental compromise. We offer the rubber industry an opportunity to meet sustainability mandates while getting access to a lower-price feedstock that is renewable. The bottom line is we offer a painless way to deal with a major societal problem that will only get bigger as more tires hit the road in developing countries.
To make a global impact, Tyromer must become global and we need money to do that. We have young PhD chemical engineers but management is really the professor inventor and myself. We need to bring in people who are better and more experienced. It is a great opportunity for an investor to come in now to help us grow. We will be able to grow rapidly because we will have all the information to replicate our production system anywhere. We are just about building our first production plant, and in nine months we will know almost everything about it. In 12 months, we will have firm financial data to drive adoption.
license our production system, or operate joint ventures. Our processing
system can be implemented wherever there are scrap tires. That means
globally. Operating a Tyromer processing system is highly profitable, even
at today`s historically low rubber price. Most retired or downsized managers
and executives have the experience and the know how to run such an
operation. Tyromer offers them a great opportunity to build a very
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