The Company

On August 10, 1994, Nicholas Apostol founded Environmental Rubber of Puerto Rico, Inc. for the purpose of converting used rubber tires into commercially viable products. Rubber tires are a particularly problematic waste as they do not readily disintegrate and in landfills they tend to float to the surface where they collect water creating insect breeding grounds. Environmental Rubber of Puerto Rico, Inc. was a founding member of the Caribbean Recycling Foundation. The officers of the Company are involved in other recycling ventures.

Raw Material

There are between 4 and 5 million tires disposed of annually in Puerto Rico and there are an estimated 30 million tires in landfills that must be removed. Legislation is pending which would require a disposal fee to be paid on used tires. This fee structure was created to encourage tire recycling industries as most tire recycling technologies are not competitive without such fees. However, people have been reluctant to pay a disposal fee to recycle tires and problems with illegal dumping have risen.

The Company intends to procure used rubber tires through several channels. The primary method will be to offer a "zero cost", if delivered to the Company, incentive. As most competitive sources for used tires, including the landfills, require a tipping fee for disposal,
this program is expected to encourage local entrepreneurs to collect tires from a variety of establishments for a carting fee and to deliver the tires to the Company. A second method aimed at individuals, is to work through the Caribbean Recycling Foundation to collect tires through the municipal blue bag and recycling collection center programs. This option will provide individuals with a convenient, no cost recycling point for their used tires. In a third method, the Company will establish service contracts with prime sources of used tires, namely major tire dealers and government agencies. Lastly, the Company will offer pick-up service of used tires in which case a pickup fee would be charged. The Company currently has verbal commitments from several municipalities and other sources which would fill most of the first year's capacity. The Company's production capacity, of 1.5 million tires, is approximately 25% of the tires disposed of annually.

Production Process

Traditional tire recycling uses large grinders to grind rubber tires into pieces. This process is inefficient and costly to operate as it consumes high levels of energy, involves many mechanical parts and can not thoroughly separate the metal and fluff (fabric fiber) from the rubber. A newly designed tire recycling technology called Crumb Rubber Technology has overcome the major problems associated with the traditional grinding process. A tire recycling facility with the Crumb Rubber technology is operating in Long Island, New York with very favorable results.

The Crumb Rubber process involves four phases. In the first phase, the tire is shredded into 2 by 2 inch rubber chips. These chips are then moved along a conveyor system to a cooling chamber where they are frozen through a natural air pressure system to -130o C. In the third phase, the frozen chips are pulverized in a hammer mill. A second stage of the pulverization process occurs at ambient temperatures, so that the final molecular particles which exit this process are rough edged which provides for better binding of the materials in future products. In the final phase, the three by-products of the process, crumb rubber, steel and fluff are separated.

At production speeds of 175 tires per hour, 24 hours per day the Company's production capacity with one machine would be 1.5 million tires annually. From an average car tire weighing 20 lbs., the by-product yield is 15 lbs. of crumb rubber, 4 lbs. of steel and 1 lb. of fluff. The crumb rubber machine allows for either variable mesh size production or specified mesh size production. The Company forecasts a projected mix as follows:

Size Percentage
Less than 20 mesh 25.6%
40 mesh 34.7%
80 mesh 19.9 %
200 mesh 19.8%
TOTAL 100.0%

The Company's manufacturing cost including depreciation is $0.95 per tire, and the full cost including sales costs is $2.20 per tire. These costs represent 26% and 60% , respectively, of the tires' sales value excluding any potential revenue from tipping fee.


The total annual production capacity of the plant has been sold through a renewable annual contract to a recycling products distributor. The contract prices are based on the crumb rubber commodity prices less $0.04 per pound.

The key markets for crumb rubber are:

This market is driven by federal legislation which requires a given percentage of crumb

To be added to asphalt in roadway construction starting in 1996. Several states namely, Florida and California, already require the use of crumb rubber in their roadway construction. The Company's crumb rubber product has received approval from the Florida Department of Transportation for use. The annual crumb rubber consumption for roadways in Florida is 10,000 tons.

Used as a high grade extender for pneumatic tires and solid tires. The market size is 20,000 tons annually and this market has a good potential for growth.

Athletic Surfaces
As a resilient material for running tracks, tennis courts and mats. This market is growing rapidly.

Used for making soles for sneakers, construction boots, hiking shoes and dress shoes. This is a mature market.

Used as fuel in cement production, but not a viable market for the Company.

The market value of the crumb rubber is dependent upon its mesh size. The current market prices by size are

Size Average Price Range
1/4" $.09/lb $.02 - .15/lb
3/8" $.086/lb $.04 - .13/lb
10 mesh $.12/lb $.06 - .17/lb
20 mesh $.15/lb $.07 - .20/lb
30 mesh $.17/lb $.12 -.21/lb
40 mesh $.23/lb $.16 - .25/lb
80 mesh $.45/lb $.30 - .65/lb

Also, the steel by-product can be sold, the current market is $.03/lb. The fluff is recyclable but has a negligible value.

Additional revenues may be generated through tipping fees depending on the sourcing of the tires. Pending governmental legislation recommends a $2.50 per car tire tipping fee. As discussed in the Raw Material section, the Company is willing to forego the tipping fee when the tires are delivered to the Company, but in other instances a fee would be charge. The financial forecasts included in this package do not reflect potential revenues from tipping fee collections or from the sale of the steel by-product.


The Company has obtained all building and use permits required in the foreseeable future. These include a permit to collect and transport nontoxic solid waste, a permit to receive, store and process nontoxic solid waste, a permit to manufacture and process crumb rubber and rubber products made from recycled rubber tires, and the fire and health department permits.

Government Incentives

The Company is in the process of obtaining the following Government Incentive Benefits:

- An Income Tax Exemption which would exempt 90% of the Company's earnings form income taxes for up to 20 years.

- A Municipal Licenses Exemption which would exempt the Company from 60% of property taxes for up to 20 years.

- An Excise Tax Exemption which would exempt the Company from taxes on spare parts, machinery and raw materials imported from outside the island.


The Company currently rents a portion of the 26,000 square foot facility used by Environmental Plastics of Puerto Rico, Inc. The plant is located on a 5 acre site in Cidra, Puerto Rico which is 20 minutes from the San Juan area.

Directors and Officer

Nicholas M. Apostol
Chairman of the Board of Directors,

Nicholas Mouravieff-Apostol was born in England in 1947, the grandson of the Manx author, Hall-Caine on his mother's side and the great grandson of the Russian "Decembrists" on his father's side. Educated at St. Paul's Prep School in New Hampshire, the University of Nebraska where he majored in Political

Science, Apostol served in the US Air Force during the Vietnam War. He was an early pioneer in the development of the handheld calculator and digital watch. In the late 1970's he was well known for his contributions to the commuter airline industry and came to Puerto Rico after purchasing Dorado Wings. He worked as a Consulting Services Manager for Arthur Young and Company in Central America for several years before returning to his private practice as an international affairs consultant. He spent eight years in El Salvador where he controlled the billion dollar US balance of payments program which was recognized by the GAO for being the best of its kind. As a senior consultant to USAID in El Salvador, he was a key player in the organization of FUSADES, the private sector development agency, and CONARA, the municipal reconstruction agency in El Salvador. Later, at the request of President Duarte, he directed the humanitarian relief effort following the earthquake in 1986 and managed all the funds received from local and international donors. Before returning to Puerto Rico in 1991, he served as executive advisor to President Cristiani during the peak of the Civil War and the peace negotiations which finally ended the twelve year war. He joined Environmental Plastics of Puerto Rico, Inc., in 1992 as a member of the founding group. He is also the Founder and Chairman of the Caribbean Recycling Foundation as well as the founder and Chairman of the Board of Directors of Environmental Rubber of Puerto Rico, Inc. Mr. Apostol resides in Guaynabo, Puerto Rico with his wife, the former Jean Byington, an animal protection activist and licensed veterinary technician. Mr. Apostol is a member of the Plastic Lumber Manufacturers Association, the ASTM Plastic Wood Standards Committee, the Who's Who in Outstanding Business Executives and the Who's Who in Aviation. He is a licensed commercial pilot and speaks four languages.

José Garcia-Pino

Born in Havana, Cuba in 1944, grandson of don Fidel Pino Santos who was president of The chamber of representatives and founding partner of the Bacardi Corporation as well as other leading companies in the fields Of agriculture, hotels and commercial banking, José García Pino Studied at Baldor college and completed a bachelor degree in science. He also completed studies in agricultural engineering At Vedado institute of Cuba. While in Puerto Rico he has completed Various seminars and courses in construction techniques, real Estate, cost controls, mortgage financing, among others. During The last 27 years, his commercial background included being a Partner in various construction firms as well as taking an active Roll in mortgage banking and various real estate development businesses. At present, he is a member of the board of directors of environmental Plastics of Puerto Rico and is also a member - director of the Caribbean recycling foundation. In his spare time, he serves as Vice-president of the automobile federation of P.R. and is an Active member of the American red cross association.

Dr. Matt J. Kessler
Secretary - Treasurer

Dr. Matt J. Kessler, born in White Plains, New York was a founding member of the Corporation and has been a dedicated conservationist since his graduation from Cornell University as a Doctor of Veterinary Medicine. Following four years in the U.S. Air Force and three years with the Naval Aerospace Medical research Laboratory in Pensacola, Florida, Dr. Kessler joined the University of Puerto Rico where since 1986 has served as Director of the Caribbean Primate Research Center. He also owns and operates a private veterinary clinic in San Juan, serves as Adjunct Associate Professor of Clinical Medicine

at Cornell, Associate Professor at the Department of Pathology of the University of Puerto Rico School of Medicine and is the author of numerous articles concerning Primatology. He resides in Bayamon, P.R. with his wife, the former Ava Gaa Ojeda, a bio-medical technician and his son, David.