The Challenges of Crumb

By adapting to meet customers’ needs for more refined crumb, Recycling Technologies International has carved a successful niche in the crumb rubber industry.

By Joel Berg

Tim Leighty, cofounder of Recycling Technologies International LLC (Hanover, Pa.), will tell you his company’s success all began with one unhappy customer. 
   It was the early 1990s, and Leighty was working for Baker Rubber Co., based in South Bend, Ind. He and a colleague paid a visit to a new client, Dodge Cork Co. in Lancaster, Pa. The Dodge managers said they were having trouble with contaminants—glass, stones, and wire—in the crumb rubber Baker was shipping to them. The contaminants would nick the blades used to peel thin sheets from compressed rubber logs. The nicked blades would mar the sheets, which they would have to discard.
   Traditionally, a few bits of stone, glass, or wire hadn’t posed much of a problem to end users of crumb rubber. But demand was evolving, and processors would have to change. Baker wasn’t interested in solving the problem, Leighty says, but he was. He resigned, and with a few partners he formed his own venture to meet what he believed would be a growing market for cleaner, “refined” crumb rubber. “It was a recognition of the bar going up a notch,” he says. 
   To meet the new demand, Leighty realized he would have to base production on customer needs rather than the limitations of the equipment that existed at the time. This strategy has guided RTI’s growth into a company with more than $10 million in annual sales, and the strategy continues to guide the firm as it searches for new uses and new markets for crumb rubber. 

The Resilience of Rubber
Manufacturers have been using crumb rubber in a variety of ways since at least the end of World War II, Leighty says. It can go into just about any product that uses rubber: tires, roofing, asphalt, automotive parts, landscaping material, and civil-engineering projects, among other items. 
   Many athletic surfaces, from tennis courts to running tracks to football fields, contain crumb rubber. If you’ve seen players on artificial turf kick up what looks like black dirt, it’s probably crumb, which gives the surface a more natural look and a softer feel, potentially reducing injuries. The layer of crumb also improves drainage, Leighty says.
   Several paper manufacturing companies use rubber sheets derived from crumb to protect their shipments from cuts and scratches. Rubber sheets placed under pallets prevent the pallets from sliding around inside trailers. Playground tile made from crumb has been popular for years. More recently, colored rubber mulch has found a strong market, Leighty says, noting that home-improvement stores “can’t keep it on the shelves.” 
   Times haven’t always been so good for the crumb rubber industry. The sector has had its share of ups and downs, particularly in the late 1980s, when processors anticipated a heavy demand for crumb rubber as an ingredient in crumb rubber-modified asphalt. “People saw it as black gold,” Leighty says. In response, the number of players in the industry probably tripled. But federal legislation that would have mandated the use of asphalt rubber—and paid for it—fell through. That left a glut of material of varying quality, driving down prices through the mid-1990s. This development “really upended the industry,” Leighty says.
   Prices for some types of crumb rubber have recovered, but they haven’t risen as quickly as the cost of making, packaging, and transporting it, he says. RTI has survived by fine-tuning its processes, working closely with its rubber suppliers, knowing its customers’ needs, and identifying new markets for its products. “Everything we do starts first with the customers and exactly what they need,” Leighty says.

Creating Cleaner Crumb
To meet his first challenge in producing a higher-quality crumb, Leighty and his partners incorporated the
company—then named Recycling Technologies Inc.—in July 1993 and established a plant on the outskirts of Hanover, a small industrial town in south central Pennsylvania, in 1994. The young company had five employees, 22,000 square feet of space, and $500,000 in capital equipment. Leighty designed the processing line, and he and the employees installed much of the machinery themselves. “The money had to go into the equipment,” he says, “so we did what we had to do,” including working as consultants for other processors while the facility was coming together.
   RTI’s feedstocks—rubber chips from tires, buffings from the retreading industry, tire peels, and industrial scrap rubber—arrive at the plant in trailers. Skid-steer loaders scoop up the feedstock and unload it into hoppers, which feed into machines that sift the material by size and remove ferrous metals before it begins further processing. The sorting equipment also sifts out any contaminants introduced by previous processors.
   The effort RTI puts into pre-qualifying feedstock as it arrives is rare among the 35 crumb rubber processors in North America. The goal is to separate pieces by size depending on the processing they will require—and to determine whether the company should introduce them into processing at all. Shortly after RTI opened, it began swapping with Baker Rubber feedstock that was too small for its main customer. In return, Baker sent RTI feedstock that was too big for its uses. “We’re still doing it today,” Leighty says, “which speaks volumes about the importance of mutually beneficial relationships.”
   From sorting, the material goes to one of six work centers that screen and grind it to the required size. Some work centers focus more on reducing the size of crumb particles; others focus on removing wire, stones, and other contaminants. (Metal recovered from the crumb is recycled; stones and sand go to landfills.) Leighty declines to give the details of his company’s unique cleaning process. Instead, he simply notes that the firm uses “a variety of physical and electrostatic separation technologies to orient the rubber particles for optimal removal of the nonrubber components.” 
   The material can go through several work centers, depending on the need, Leighty says. “When we start with a 
2-inch chip, it may go through three or four work centers before it is realized as 40-mesh product in the final work center.” The company will clean, sift, and grind the material again and again, depending on the end use. Different users of rubber require different-sized particles. The company offers products ranging from 5/8 inch down to 80 mesh, which is a fine powder. A full truckload can be ready in six hours, or it can spend up to six weeks running through various equipment. 

The First Challenge
Even before forming RTI, Leighty worked with the company that provided his original inspiration to understand its needs and ensure that his processing design could create a product that fit those needs. A few years earlier, Dodge Cork had struck up a joint venture with the German company BerleburgerSchaumstoffwerk (BSW) to produce a veneered rubber sheet sold in the United States as Regupol, and it needed a steady supply of extremely clean and consistent crumb rubber.
   Leighty visited a plant in Germany to observe how it processed materials for BSW’s use. BSW board member Peter Breuer asked him whether he was confident RTI could produce material as clean as what he saw in Germany. Leighty recalls saying, “No, it will be better.” 
   RTI opened its doors in August 1994 with Dodge-Regupol Inc. as its primary customer. Over the next two years, RTI became the company’s sole supplier, driven by Leighty’s customer-focused philosophy and a dedicated workforce. RTI’s cleaner crumb allowed Dodge-Regupol to enter new markets, such as providing rubber mats for bathroom scales. Thanks to RTI’s processes, Leighty says, Dodge-Regupol and its customers could be confident the end user wouldn’t step on a scale or any other flooring product and get poked by a wire or feel a stone underfoot.

Growing Pains
By 1996, RTI was delivering up to 10 million pounds of product per year, with 15 employees operating three shifts. Up to that point, the company’s equipment limited its feedstock primarily to buffings, the rubber generated when truck tires are buffed to receive new treads. The following year, the firm added a reconditioned cracker mill and a new Roto-Shaker screener, which allowed it to begin taking whole-tire-derived feedstock. “It was a difficult move to make financially,” Leighty says, “but we knew we needed to do it.”
   RTI also designed a packing system to offer product in easy-to-handle, 25- to 50-pound bags of crumb to customers unable to handle the 1-ton bags and truckloads it shipped previously. By 1998, with the new equipment and 20 employees in the original space, “we were packed,” Leighty says.
   At the same time, the company was challenged to meet the increasing demands of a fast-growing Dodge-Regupol, which remained its main customer. In particular, RTI had to search far and wide for the right feedstock: relatively clean whole-tire chips less than 1/4 inch in size, in contrast to the 1- to-3-inch chips most processors were using at that time. 
   “Here’s how bad it was,” Leighty says: “We were forced to buy material from a tire processor in Alberta, Canada,” which required costly long-distance transportation. RTI needed to free itself from the limits of its current process to continue meeting the needs of its main customers.
   The solution called for a major investment in space and equipment. Dodge-Regupol worked with the Pennsylvania Department of Community and Economic Development to secure the necessary funding. In 2000, Dodge-Regupol took an equity stake in RTI, which became Recycling Technologies International LLC. The state provided $3.2 million in a low-interest loan with an unusual performance incentive: For each 20-pound equivalent of documented Pennsylvania scrap tires that RTI processed and sold, the state forgave 50 cents of the loan. Nearly half of the loan has been forgiven to date. 

Investing in Equipment
The expansion required a nearly fivefold increase in space, bringing the company’s total area to 99,000 square feet. Equipment was the key to the expansion, however, because it enabled RTI to diversify its feedstock sources.
   The first new machine was an Eldan Heavy Rasper, which can process bigger pieces of rubber laden with steel, clean them up, and break them down. The next two machines, newly designed by RTI and Artisan Machine Inc. of South Bend, Ind., consisted of a primary cracker mill and a finishing cracker mill, with 250-hp dual drives powering each roller. 
   Leighty believes his company’s dual-drive mills, among the first of their kind, can make a cleaner product than the standard single-drive mill. In a single-drive mill, the rollers move at speeds set at a fixed ratio to each other as they grind rubber chips between them. Over time, the rollers tend to overwork the chips, sometimes causing a tire’s cord weave to unravel and turn to fuzz, Leighty says. The fuzz poses both a fire risk and a challenge to liberating and separating fiber and wire to produce a clean product. In addition, a single-drive mill has limited success dislodging contaminants such as wire and stone.
   In contrast, the two mills with independently driven rollers prevent overworking, produce a smaller crumb without compromising particle integrity, and make it easier to remove byproducts downstream. The operator can adjust their speeds and friction ratios based on the feedstock and final product desired. 
   RTI also added several new Roto-Shaker screeners to sort material by size, increasing capacity 150 percent. With the additional plant space, it also added three more dock doors for loading and unloading trailers, reducing the need to move trailers frequently throughout the day.

The People Factor
Equipment aside, RTI’s expansion never would have worked without the all-important people factor. Leighty began recruiting even before he and his partners finalized the joint venture with Dodge-Regupol. For starters, he wanted a maintenance person who could keep the equipment in top shape but also play an instrumental role in installing new machines and fabricating catwalks, supports, and other structures. Hiring such a person allowed RTI to use its capital for equipment, not outside contractors, and it saved the company more than $270,000.
   Like those maintenance technicians, most RTI employees are cross-trained to perform multiple tasks. “There’s no room for any fat,” Leighty says, himself included. Though his responsibilities today are more executive in nature, he still generally dresses in jeans and a sweatshirt, ready to handle any situation the day might require. (He adds, however, that with the capabilities of his staff, these days he rarely has to pitch in.) Even so, “we’re all in this together, and every job is everybody’s job,” he says. 
   That team environment is one reason Jeff Narkis came to work for RTI 10 years ago as a production supervisor. Narkis had worked with Leighty at Baker Rubber, and Leighty’s leadership impressed him. “He always puts the people first, and that really makes a difference,” says Narkis, now plant manager. “I consider him a good team builder, and with a team environment, you get more done.”
  The company’s workforce today includes four semi truck drivers (three full time and one part time), who pick up raw material and deliver finished product. “They’re like our diplomats,” Leighty says, emphasizing the role of good people fostering good relationships within the industry. “It’s how we survive.” He also lauds RTI’s administrative staff and management team, a group of nine employees who have a combined total of 90 years of experience.
   But Leighty, a former U.S. Marine, isn’t all about work. His wood-paneled office is filled with military memorabilia and evidence of his passion for hunting and fishing. 

Pursuing New Markets
By June 2001, the new machines were up and running, and RTI’s team had grown to about 30 employees. A byproduct of the expansion was a greater crumb yield, not all of which was sized appropriately for RTI’s existing customers, so the company started searching for new ones.
   The following year RTI became a supplier to Goodyear Tire & Rubber Co. (Akron, Ohio), and it also began selling crumb rubber for use in a rubber-plastic composite sold as pellets and extruded as sheets. The composite, a replacement for metal or virgin plastic, has a variety of uses in the automotive sector and other industries. 
   Leighty still sometimes works on the side as a consultant, counseling clients to see what customers will buy before they jump into production or helping existing operators make improvements to add value to the crumb rubber they produce. Too many entrepreneurs buy equipment, he says, and then they’re forced to shop around their samples only to find that they aren’t what customers want. 
   New markets and new customers have allowed RTI to continue to grow, adding 40,000 square feet of warehouse space in 2004 and another processing line scheduled for startup in April.

Room for Everybody
Today RTI has more than 40 employees, occupies nearly 134,000 square feet of space, and expects to produce in excess of 65 million pounds of crumb this year. One of the company’s biggest concerns is the availability of reliable, quality raw material. Rising oil prices further complicate the supply problem by boosting transportation costs and diverting raw material to other markets, like tire-derived fuel.
   Leighty compares the situation to that of a camper burning firewood near his campsite: The longer the camper stays, the more firewood he consumes, the farther he has to hike in search of wood to burn. Eventually, the camper has to find a new campsite and start the process over again. 
   Leighty cites advice he received years ago from an old industry hand: It’s better to be close to your raw materials than to your customers, provided you’re selling them a product they want and need. Thus, the company is thinking about opening a second plant within the next two or three years, at a location Leighty is keeping to himself.
   The biggest challenge and opportunity for the crumb-rubber industry, he says, is to demonstrate the value of its product to new customers and to add value to products supplied to existing customers. A few years ago, the auto industry was keenly interested in using recycled rubber products derived from crumb rubber, but it was skeptical that the industry could deliver the necessary quantity and quality. “It hit me and others really hard,” Leighty says, because the quality of crumb rubber has improved a great deal. “We still have a lot of work ahead of us.”
   In the long run, the industry’s work toward better quality will pay off through growth and higher profit margins, Leighty says. “Once that burden of proof is satisfied, we should all be able to expect significant growth in the market and also achieve that revenue enhancement,” he says. “There’s room for everybody in this business.”
   For Leighty, the inspiration from that sales call nearly 18 years ago remains a call to arms: Listen to what the customers want, then find a way to make that product better than they expect it to be. 

Joel Berg is a writer based in York, Pa.