One promising industry is rubber crumb production. This type of industry today is not particularly developed in the CIS.
Those who are engaged in this activity do not form a clear monopoly, and in some parts of the post-Soviet space there is practically no competition, since the production facilities are located at a great distance from each other. At the same time, with every year the demand for rubber granulate is becoming higher, and the areas where it is used are growing.
Do not forget about such an important component as the marketing of products. The popularity of rubber crumb is becoming higher, and there are not so many competitors in the market. As a result, if you approach the sale of this product correctly, you can easily establish sales channels. This type of industry does not require special qualifications and special knowledge-intensive work skills.
Depending on the amount invested in the production, the time for cost recovery can be from six months to two years. This is a relatively short period, which is another plus in favor of engaging in this type of activity. Thus, the minimization of risks and the above advantages make this business quite attractive from an investment point of view.
Rubber Crumb Production Standards
How to correctly calculate the production rate of this material so as not to be mistaken? To give an exact answer to this question is not so simple. The production of crumb rubber depends on various nuances. But there are two decisive reasons that form the basis for deciding to engage in this business.
Base No. 1: cash
First of all, you need to take into account the amount of financial resources that you have (own savings and possible loans and borrowings). It is noteworthy that this type of industry is possible with any production standards you need:
- with small investments at the initial stage, volumes can be minimal;
- You can engage in large-scale production by building a core business of a large area, for example, several thousand square meters and costing up to fifty million dollars;
- choose something between these options.
However, it is worth considering not only your financial capabilities, but also the general situation with the turnover of this product (see base No. 2).
Base No. 2: Turnover
In the case when you have a sum of one hundred thousand dollars, the question of choice should not worry you. In this case, the main thing will be the search and rental of premises for a warehouse, the area of which should be an average of 60 square meters, several more rooms for warehouses and the purchase of an inexpensive and uncomplicated conveyor. In this case, the production of crumb rubber can begin with the release of 800-2400 kilograms of product per day.
If you decide to engage in this business at a more serious level, then it will be obligatory to conduct a market analysis in the region where you intend to do this. Without the implementation of this work, it is unlikely that it will be possible to establish profitable production.
Is there a need for this product and through which channels can it be implemented? Who else is involved in this industry and is it possible to compete with it in the market?
The answers to these questions need, of course, to be taken into account and, of course, to take into account your own business development opportunities in the next few years. You are unlikely to be able to predict exactly, but rough estimates will at least indicate the direction in which you should move. This is undoubtedly better than acting blindly.
Methods for the production of rubber granulate
For the production of granulate, used tires and tires are used. For obvious reasons, you should not even talk about finding the right raw material for production and its price. Old tires and tires can be found in large volumes. You can purchase them for a minimal fee, and sometimes you only need to pay for their delivery to your company.
The production of rubber crumb from tires and tubes, as already mentioned, is not very expensive. For him, the most varied raw materials are quite suitable - automobile, bus and other tires and tires.
There are such types of consumables:
- used airbags and tires;
- used rubber (including fabric and metal reinforced).
Currently, there are two main methods that can be used to produce crumb rubber from used tires and tires:
- mechanical crushing;
- Shock wave grinding.
Shock wave crushing is a relatively young tire recycling method. Mechanical crushing is by far the most popular.
The installation of equipment for the manufacture of rubber granulate using shock wave grinding requires a special approach. In particular, it is necessary to re-equip the premises where the production will be located, and to install specialized refrigeration chambers, which are quite expensive. You can install such equipment in smaller areas. At the same time, the cost of electricity will be several times less than when installing analog installations.
Such equipment is quite justified in large and medium-sized industries. However, crushing by mechanical means can also be quite demanded from an economic point of view.
Expenses
The production of crumb rubber, reviews of which can be read, in fact, you can start with small volumes and at relatively minimal cost. Only 60 square meters of production space is enough. It will install a simple line for the production of rubber crumb, connected power supply with a capacity of 380 V and 2 employees per shift, controlling the operation of automation.
The best option is non-stop work throughout the week. To do this, organize three work shifts. As a result, the staff will be eight people. In addition, you need to take care of places for storing raw materials and finished products. In this case, the storage room for tires should be four or even five times more. Accordingly, the area of the room for raw materials can be 500 square meters, for rubber crumb - 100 square meters.
Based on this, the cost of producing 100 kilograms of granulate per hour will consist of fixed and variable.
Fixed expenses:
- the price of equipment - from seventy to one hundred fifty thousand US dollars;
- it is also necessary to provide about two thousand dollars for conducting an appraisal examination and writing documentation.
Thus, fixed costs will range from seventy-two to one hundred and fifty-two thousand US dollars.
Variable expenses:
- the cost of renting premises for warehouse needs will be about 3-6 thousand US dollars per month;
- the salary of employees serving the production line will cost 3-7 thousand US dollars per month;
- wages of workers engaged in marketing products - 1.5-2.5 thousand US dollars per month.
The total amount of variable costs will be 8-16 thousand US dollars.
As a result, the total amount of costs in the first month of work will be equal to 80-170 thousand US dollars. Under ideal working conditions, within a month, the amount of revenue should fully cover variable costs.
If the production line has a capacity of, for example, 500 kilograms per hour, then the costs of the necessary crumb rubber manufacturing equipment can reach one and a half million US dollars.With the increase in finished goods volumes, variable costs will also increase in direct proportion. If there are several lines, for example, two or three, then the costs, respectively, become larger, based on production volumes.
Profit
If your production line produces 100 kilograms of granulate per hour, while working non-stop, then per month the volume of finished products will be 72 thousand kilograms of crumbs (100 kilograms * 24 hours * 30 days = 72000).
Given the average cost of granulate at $ 500 per kilogram, we get a monthly profit of $ 36 thousand.
It is also worth paying attention to the fact that in the production of granulate metal remains in the waste. Its volume is about 15-25%:
- 25 kilograms of metal fittings * 24 hours * 30 days = 18 thousand kilograms of metal per month;
- the average price of scrap metal is about $ 200 per ton. As a result, the profit from the sale of metal fittings will be 3600 thousand US dollars.
Total profit:
- 36000 + 3600 - approximately 40 thousand US dollars;
- projected costs average 10%.
This profit margin is many times more than the variable costs arising from engaging in this activity.
Implementation
Rubber crumb is used in the following industries:
- in the manufacture of road surfaces, asphalt and concrete fences on roads with the addition of granulate;
- for the manufacture of coatings for sports facilities;
- production of hydrophobic materials;
- granulate is also used in the construction industry for the production of rubber plates, pallets, roofing materials, etc .;
- granulate is also used in the manufacture of footpaths;
- rubber granules have found their application in filtering various kinds of liquids, creating thermal and noise insulation, as well as waterproofing materials.
If you are interested in the production of rubber crumb, whose business plan has already been written, then at the initial stage it is necessary to find the scope of use of the granulate and look for options for strengthening business contacts.
Rubber crumb in the manufacture of plates
To minimize possible risks, it is possible to expand the scope of the granulate. So, you can do the manufacture of rubber plates or other coatings from this material. The demand for these products does not depend on the demand for rubber granulate. Therefore, you will be able to create two completely different lines of activity in one enterprise.
In addition, it will enable your company to work on an ongoing basis. Moreover, the price of finished products is higher than that of the material for their manufacture. And this means that revenue will grow.
The costs of expanding the scope of use of the granulate will be equal to the amount spent at the initial stage of the organization of production. To save transportation costs, the location of both lines in the same industrial area will be ideal.
If in the future the production turns out to be profitable, it will be possible to increase the capacities and types of manufactured products.
