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.
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.
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
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.
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:
|Less than 20 mesh
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 $0.04 per
The key markets for crumb
This market is driven by federal legislation which requires a given percentage
To be added to asphalt in roadway construction starting in 1996. Several
states namely, Florida and California, already require the use
of crumb rubber in their roadway construction. The Company's
crumb rubber product has received approval from the Florida Department
of Transportation for use. The annual crumb rubber consumption
for roadways in Florida is 10,000 tons.
Used as a high grade extender for pneumatic tires and solid tires. The market size
is 20,000 tons annually and this market has a good potential for
As a resilient material for running tracks, tennis courts and mats. This market
is growing rapidly.
Used for making soles for sneakers, construction boots, hiking shoes and dress
shoes. This is a mature market.
Used as fuel in cement production, but not a viable market for the Company.
The market value of the
crumb rubber is dependent upon its mesh size. The current market
prices by size are
||$.02 - .15/lb
||$.04 - .13/lb
||$.06 - .17/lb
||$.07 - .20/lb
||$.16 - .25/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
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
Directors and Officer
Nicholas M. Apostol
Chairman of the Board of Directors,
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.
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,