Within six months, Ellsin Environmental’s tire-recycling facility could reach commercialization, a culmination of four years of research and development at the Sault Ste. Marie-based plant.
Over the last eight months, the company has been seeking out end users for the carbon black, oil and steel that result from the plant’s reverse polymerization process. Bob MacBean, CEO of Ellsin’s parent company Environmental Waste International (EWS), said the company is very close to reaching that goal.
“It’s tough to tell with big items,” said MacBean, who replaced Daniel Kaute as EWS’ CEO last December. “But I’d be very surprised if we don’t have something signed within the next two to six months.”
EWS set up the Ellsin plant in 2011, and since then has been working to perfect its technology to bring it to market. Reverse polymerization uses high-energy microwaves to break down organic waste — in this case, tires — into its simple elements.
Last April, the company reached a milestone when the plant ran continuously for a week, which MacBean said proved, to EWS and potential customers, that the technology worked.
“It ran continuously, it produced product, and there were no shutdowns,” he said.
EWS has additionally had its end products tested with lab reports available for viewing by prospective customers.
The company’s next big move will be to decide whether the plant will continue on as an R&D facility, or whether it will move into commercial production. MacBean said EWS hasn’t yet decided what the best use of the plant will be.
EWS can take one of two avenues to generate revenue: take orders to process tires at the Sault plant and continue with R&D, or sell the plant and receive royalties once the plant is profitable.
In the most lucrative scenario, EWS would co-locate with a company that makes rubber products, including tires, MacBean said. EWS would process scrap from the partner company, supplement it with used tires, and then sell the carbon black, oil and steel back to the partner company.
“If we had that kind of a long-term contract in place with them, we could afford to build our own plants, because you can finance those through debt,” MacBean said. “So we would then own the plant and we would have long-term contracts in place to sell the resulting products. That’s the most profitable avenue for us, but you need a large manufacturer that has a very good balance sheet in order to do that.”
Until that decision is made, EWS will continue to seek out buyers and secure additional financing. MacBean believes the company is in an excellent position moving forward.
“I know it’s still pre-revenue, but it’s never actually been in a better commercialization position,” MacBean said.
“The technology works very well, we’re making improvements all the time, we have potential customers phoning us now, which is great, our sales pipeline has never looked better, and as long as we keep being able to finance ourselves and we have a number of prospects that look like they’re willing to provide large amounts of capital, I think we’ll do well.”