November/December 2011
Perseverance and flexibility have allowed the Daughtrey brothers to recover from a catastrophic setback and rebuild Four D Corp. as an innovative processor of scrap tires.
By Diana Mota
Many ancient cultures have the myth of the phoenix, a bird that periodically gets consumed by fire and rises from its own ashes, reborn and renewed. Brothers Max and Tommy Daughtrey of Four D Corp. in Duncan, Okla., can identify with that mythical creature: Their tire recycling facility burned to the ground 11 years ago. They rebuilt it better than ever, but the event has left its mark.
Max vividly recalls the day of the fire, Sept. 9, 2000. He was at a football game at his alma mater, the University of Oklahoma (Norman, Okla.), sitting in the same stadium seats he’s had for nearly 40 years. “My plant manager called and told me not to hurry, but there was a little fire outside the building,” he says. By the time he exited the stadium, the plant manager had called again. “This time he told me to hurry up because the fire was getting worse.” Halfway into the two-hour drive back to the plant, he received a third call telling him to take his time: “Everything was gone.” He watched the plant burn all night long, he says. Three days later, the Daughtreys learned that a paper filter that collected tire fiber off a rotor caught fire and spread the fire to the rubber underneath it. Although they don’t know what caused the spark, they no longer use paper filters.
After the fire, the brothers briefly thought about leaving the tire recycling business, they say. “But it was economically feasible to rebuild because the insurance company replaced what we had lost,” Max says. “Thank God for good insurance and the fact that nobody got hurt.” His only regret, he says, is that the company didn’t have lost-income insurance. “For six to eight months, everybody got laid off.” They salvaged what they could from the plant, which wasn’t much, they say. Even one-third of the concrete slab the plant sat on had to be chipped away and replaced.
The fire gave the Daughtreys an opportunity to learn from their mistakes, and from their experiences in the industry over the seven years they operated before the fire, and create a processing plant that’s safer and more efficient. That kind of perseverance despite several setbacks has been essential to their success.
Starting Over
Starting with a clean slate gave the Daughtreys the opportunity to redesign and re-engineer the entire plant. When they built the first facility, they explain, they completely enclosed it, even soundproofing the walls with paper-backed insulation because they were worried about noise from the equipment bothering their neighbors. “The insulation was supposed to be fireproof,” Max says, but tire fiber collected on it, and that burned. When they set out to design the new facility, they concluded noise was not a concern. The plant sits on 10 acres of land in an industrial park, away from other businesses. Thus, “we decided one side of the building would be completely open,” Max says. The new design gives easier access to the fire department, which they consulted during the building process, and it makes it easier to replace and maintain the equipment, he says. Despite the open side, he’s not worried about theft. “What are [people] going to steal, tires?” he asks. The plant has cameras and a digital recorder, which he can access off site, and the control area and offices are secured.
The open side does present some challenges with the weather. “We tell everybody the plant is climate controlled: When it’s hot outside, it’s hot in the plant; when it’s cold outside, it’s cold in the plant,” Max says. Because they buried the electrical wires underground, “we hardly have to heat the area,” Max says. For cold months, “we buy all the employees insulated coveralls,” and he closes the plant if the weather gets too bad. Heat also is a concern. “It can get up to 140 degrees [F] inside the plant,” he says. “You’ve got to watch your people and keep them hydrated. We’ve had to have people go home during the day” during extreme heat conditions.
Instead of replicating their old square building, with machinery and material that zigzagged throughout it, the Daughtreys added 19,000 square feet of space and built a rectangular structure so they could lay out the equipment in a straight line. “It takes up more space this way, but it’s more efficient,” Max says. The equipment is almost entirely computer-controlled, he points out. He needs one worker to place tires on the conveyor belt that leads to the shredder and another one at the end of the processing line to place and remove the bags filled with crumb rubber. “The plant could run with [a total work force of ] four or five people, but you’d wear your people out,” he says, because of the physical demands of the work and heat.
The new design moved the plant manager’s office and the equipment control room outside of the processing area, separating it from the equipment with a wall with a large picture window. It blocks the noise but still allows the plant manager to see the work area while he operates the computerized control system, Max explains. One other change was a direct result of lessons learned from the fire, which destroyed all of the company records: The new administrative offices are in a separate building. At the time of the fire, “we saved nothing,” Max says. “Now we have two or three different backups.”
Despite the many measures the company has taken to design the facility with fire prevention in mind, fire is still a concern. It’s a tire recycler’s worst fear, Max says. “It’s not if you’re going to have a fire, it’s when.” As a further protective measure, the Daughtreys installed a fire-suppression system from Flamex (Greensboro, N.C.) inside every tube that carries tire fiber. The system has an infrared sensor that responds to sparks by releasing water inside the tube. “That system has stopped the plant from burning down many more times,” Max says. “It’s been a great help to the industry.” The insurance company also paid for the installation of an overhead sprinkler system to bring the facility up to code. Further, the Daughtreys have developed a relationship with the local fire department. Many first responders don’t know how to fight a rubber fire, so it’s important to work with them, Max says. The local firefighters now have a complete set of plans for the plant, he says, and every 12 to 18 months they tour the facility.
Processing Pioneers
Max is proud of Four D’s relationship with processing equipment manufacturer Granutech-Saturn Systems Corp. (Grand Prairie, Texas). Together the two companies designed the facility’s first processing system, which resulted in the creation of equipment that now benefits the entire tire recycling industry, he says. In the current setup, the tires first enter the shredder, which slices them into 4- to 6-inch pieces. A conveyor carries those pieces to the Granutech Grizzly, which chips the material into ¾-inch pieces and liberates about 99 percent of the steel tire wire from the rubber. The material then passes under a cross-belt magnet, which picks up the steel and conveys it to a wire-separation system from Action Equipment (Newberg, Ore.). The rubber continues up a different conveyor to a holding tank. From the holding tank, it goes through the Granutech G-3 granulator, which reduces the material to either 1/2-inch or 1/4-inch crumb rubber. The rubber moves past two rare earth drum magnets that collect any remaining wire before the company sells the crumb rubber or processes it further for specific products. The company bags and sells the 1/2-inch crumb rubber for applications such as playground mulch. It could sell the 1/4-inch material for use in other applications, such as artificial turf, but it typically goes into a holding tank before it’s processed further with a Granutech Powderizer into a fine powder, which can range from 1/8-inch to 20 or 30 mesh, depending on the size the customer wants for its molded-rubber applications, Max says. The rubber passes through a fiber-cleaning system from Forsbergs (Thief River Falls, Minn.) before it’s sized and bagged. Fiber-separation towers from Camfil (Stockholm) suck the fiber out and empty it into a compactor box. From the granulator through the Forsbergs system, fans as well as conveyors move the crumb rubber, helping to cool it after processing.
The Grizzly came out of Four D’s collaboration with Granutech. About 18 months after Four D first opened, Max explains, the Daughtreys learned that pieces of rubber larger than 2 inches would circulate back into the shredder about eight to 10 times before it reduced them to 2-inch pieces. With the tough material and repeated shredding, they were changing shredder blades every 60 to 90 days, and “it cost $12,000 to $15,000 to replace those blades.” After some joint research, Granutech designed and built a machine that could reduce a tire from a 4- to 6-inch chip to a 3/4-inch chip in one pass—the Grizzly. “It saved me thousands of dollars,” Max says. After Granutech installed the prototype at Four D, it began using the company as a showcase for prospective customers worldwide. Tire recyclers could get “a whole turnkey operation with that machine from Granutech,” Max says, whereas previously they had to assemble a processing line piecemeal: “You bought one piece [of equipment] here, another piece there, and then had some engineer put it all together.”
The Daughtreys point out how this change in processing equipment created new and unexpected safety hazards, though. One Friday, soon after they installed the Grizzly, they decided to get a head start on the next week by running what they estimate were 2,000 to 3,000 tires through the equipment and storing the tire chips in the chip bin. When Max stopped at the plant to pick up the mail the next day, he smelled something peculiar as he approached the gate. “When I got into the plant, there was smoke everywhere.” In the summer, when the ¾-inch pieces come out of the processing equipment, they can be nearly 160 degrees F, he says. “That’s the first time we figured out [tire chips at] 160 degrees in a confined space will start a fire. Consequently, we had to change our practices. We don’t leave anything in the chip bin.” This and the other fire-protection measures have significantly reduced the incidence of fire at the facility, Max says.
Four D still tests out new pieces of equipment for Granutech and other companies. It was the first tire processor to use the wire separation system from Action Equipment, which produces steel up to 96 percent free of rubber, he says, turning the tire wire into a higher-value product. Before the installation of that equipment, Four D could get just $5 a ton for tire wire from a single buyer, Max says. “It had a lot of rubber on it. I was just getting rid of it.” Today, the clean wire sells for $100 a ton, he notes.
Finding a Niche
Though the plant-destroying fire in 2000 was undoubtedly the company’s biggest setback, the brothers note the company has hit several other bumps in the road since its founding. They started the venture with their father, Everett Daughtrey (who died in 1996), using money from the 1989 sale of the family’s welding supply business. Tire processing seemed like a promising venture: Max had learned that used tire piles were an issue while he was taking a few short courses from the U.S. Environmental Protection Agency, and Congress had recently passed the Intermodal Surface Transportation Efficiency Act of 1991, which required federal highway asphalt to contain at least 20 percent crumb rubber. “The stampede was on,” Max says. “Everyone started putting in tire recycling plants”—themselves included, when they launched the company in 1994.
They named the company for its four principal owners at the time: Tommy, Max, their father, and their sister. A trust fund formed from their father’s stock shares for the benefit of their and their sister’s children now holds majority ownership of the company, though no other family members are actively involved in the business. “I don’t blame them,” Max says. Tommy agrees. “It’s a very hard business.” Max, who has an engineering degree, oversees the day-to-day operations from his office on site; Tommy, who has a business degree, handles the fiscal responsibilities from his office on the other side of town. They make major decisions jointly, however, often during the meeting they have each morning in Max’s office.
The Daughtreys didn’t know anything about tire recycling when they opened the plant, “but we started learning real quick,” Max says. The conditions that drew so many into the business soon changed: Subsequent federal highway legislation eliminated the asphalt rubber requirement just a few years after it became law. “By then we already had the plant on the ground,” Max says. “We had to find some products for this stuff, because it wasn’t going into asphalt.” They began scrambling for new end markets, a task that keeps them busy to this day.
For two years, the company produced and bagged ¼-inch tire chips with no idea of what they were going to do with them. “Two million pounds sat in sacks in a warehouse,” Max says. In 1997, North Brook Farms (Auburn, N.Y.) provided the answer: cow mattresses. The firm gave 4D the supplies and equipment to sew the mattresses; 4D supplied the 1/4-inch rubber and labor to fill the mattress cells. “For two years, we did nothing but ship cow mattresses all over the world,” Max says. At five cents a pound for the crumb rubber and $5 for filling a mattress, “we weren’t making money; we were just paying our bills.” The quest for markets led them to sell crumb rubber as a potting medium for orchids for a short time. Later they launched a joint venture with Granutech-Saturn Systems to turn the recycled tires into a mulch-like painted playground cover. “We were one of the first companies to come up with playground material,” Max says. “We had it fall-tested; we had it toxicity tested; it’s totally inert.” After the fire, the Daughtreys didn’t repurchase the equipment necessary to run the playground business, however, and they dissolved that company.
After the fire, it was like starting over, Tommy says. “We didn’t know where our markets were. We didn’t even know if we could get tires.” Both tires and markets turned up, however, with the most notable of the latter being a large asphalt rubber order that lasted 18 months. “We got lucky,” Tommy says. The company also sold crumb rubber for use under artificial turf for a while, working with a Canadian company that installed the turf, Max says. “That kept us busy for several years. We shipped hundreds of thousands of bags.” Since the 2008 recession, however, that market has dried up for them. “Schools don’t have the money” to install artificial turf, Max says. “In 2007 and 2008, we were doing 20 to 30 artificial [turf] installations a year. Last year, we did two; this year, none.” Though the loss of the artificial turf business has hurt the company, “right now we’re doing all right. Our sales are about the same as last year,” he says. Today the company is working with two firms that are combining powdered rubber and plastic in molded products such as expansion joints for highways or mats for horse trailers.
Supply-Chain Issues
Getting tires this summer was challenging, the Daughtreys say, not because of a lack of supply, but because of competition for haulers. The extreme heat and drought the state experienced were “hard on people, hard on equipment, [and] hard on animals,” Max says. The heat and drought killed the grass ranchers rely on to feed their cattle, so they were selling off their herds. This meant the four or five independent trucking contractors Four D uses were busy hauling cattle in their 40-foot stock trailers instead of tires. “It’s been a nightmare,” Max says. “Now they’re getting back to hauling tires.”
The firm receives 1,000 to 5,000 tires a day. It accepts all types of rimless tires, including agricultural tires, which it cuts into smaller pieces so they fit in the shredder.
Initially, Four D received its tires primarily from three tire manufacturers in Oklahoma. “We took their rejects,” Max says. In 1996, the company obtained a permit from the state to participate in its tire recycling program and accept tires from state tire dealers, who now provide most of the supply. (Annually, at least 3 percent of the tires must come from state-certified illegal tire dumps.) “I didn’t want a permit,” Max says. At the time, “we had all the tires we needed. The state came to me [and asked the company to participate] because there were lots of tires out there” that needed to be recycled.
Oklahoma collects a disposal fee from the dealers on the sale of new tires of $2.50 per passenger tire and $3.50 per truck tire. To claim its portion of that fee, Four D submits a bill to the state at the end of each month based on the number of tons it has accepted that month. “It sounds like a good deal,” Max says. “We’re paid to take the tires, and then we sell them as product. This worked out real well for 10 years.” The problem, he says, is that a change in the law allows the state to use the fund for other purposes—and it does. “If there’s not enough money in the fund to pay all the bills, we’re prorated,” Max says. “So if I send in [a bill for] 400 tons and XYZ [Company] sends in [one for] 600 tons, he gets 60 percent of the money and I get 40 percent.” Further, cement kilns in the state that burn tires as fuel also are taking a piece of the funding pie. “There are very few months we get the full amount,” Max says. “We charged off several tens of thousands of dollars last year.” Over the past six years, he estimates, the company has lost about $2 million in revenue it would have received if the program had retained its dedicated funding.
Four D has a few other sources of tires as well. An annual community drive brought in nearly 10,000 tires last year, and the company places trailers in “strategically located” collection sites in Oklahoma City and Duncan.
Human Resources
Four D employs up to 10 people at any one time. Administrative Assistant Melissa Moore, who processes paperwork for incoming tires and answers the phones, among other duties, has worked for the company the longest, about 12 years. Jared Cammeron, the plant manager, has worked there about six years. “Jared runs the plant with my blessing,” Max says. “He knows what he’s doing. I probably couldn’t even turn the [equipment] on. It’s changed so much.” A driver delivers the company’s crumb rubber within a 200- to 300-mile radius of the facility, a range that includes Arkansas, Oklahoma, and parts of Texas. “We use a freight company for anything farther out,” Max says. The company has a semi truck and several trailers. The brothers are considering hiring a couple more drivers to collect the scrap tires. “Some days we have to shut down because there are not enough tires to run the equipment,” Max says. “It’s too expensive to run for [just] a few hours.”
The company experiences high turnover among its general laborers, who work a 12-hour shift. Max says he hires a new worker about every three to four months. Fortunately, most of the work is automated, he says, so it requires little training. He likes to hire parolees, he says, because they are drug-tested regularly and must work to maintain their parole. “I don’t hire anyone unless they’re drug-tested,” he says. “I don’t want anyone high because they can get hurt.” About six years ago, the company ran three eight-hour shifts, but it was difficult to keep them staffed, Max says, and the Daughtreys realized that most problems occurred at night, when there was less supervision. “If you’re going to have problems with equipment or people, it’s going to be the night shift,” he says. They eliminated the night shift but soon found they could do more with one 12-hour shift than two eight-hour shifts.
Future Endeavors
Tommy and Max aren’t sure what’s in store for Four D. They still hope asphalt rubber will resurface as a market for them, and they would like to find a use for the tire fiber—“selling it as a product or as raw material for a product,” Tommy says. “Right now we don’t produce enough fluff to make it marketable [or] for someone to come and take it.” It’s the only material they send to the landfill, they say. “It’s one of our biggest expenses,” Max says.
Their involvement with ReMA keeps them busy and hopeful. (The firm joined in 2003, when it began using the RecycleGuard® insurance program. Tommy currently sits on ISRI’s board of directors, and Max has served on the board of the Scrap Tire Processors Chapter.) The association is an integral part of doing business, Max says. “There’s a lot of politics” involved in the uses of scrap tire rubber, he says. “We’re working hard on getting asphalt [rubber] legislation” on the federal level. In the meantime, the Daughtreys continue exploring potential new markets for crumb rubber, such as kitty litter. “When you get into this business, nobody tells you how tough it is,” Max says. Tommy agrees. “The future of this industry is little bit cloudy.”
Diana Mota is associate editor of Scrap.
Perseverance and flexibility have allowed the Daughtrey brothers to recover from a catastrophic setback and rebuild Four D Corp. as an innovative processor of scrap tires.