Tyre exports competes with local recyclers in Australia

Australia – Australia’s largest tyre recycler, Reclaim Industries, has gone into administration. Reclaim is the only company in the country that takes in and processes complete waste tyres, and manufactures end products from them, including rubber surfacing material and moulded products. It owns recycling facilities in South Australia, Western Australia and New South Wales, together with manufacturing and distribution operations in those three states,Victoria and Queensland.

The company reported assets of just Au$99,000 at the end of last year, but had announced in December that a Chinese investment group was prepared to pump in Au$2.5 million and give the company access to a further Au$10 million via an equity line of credit.

In its annual report, published in October 2010, Reclaim admitted it had faced ‘tough competition for all of our products’.

The company had been focused on bedding down a recently purchased Sydney factory and upgrading a plant in Adelaide. Australia saw a significant increase in exports of waste tyres from mid-2007, as China looked for new sources of fuel. This diverted the domestic waste stream away from recycling and put a number of companies in difficulty.

This trend accelerated, placing further pressure on Australian recyclers, when the European Union banned the export of tyres to Vietnam in October 2009. Four tyre recyclers in New South Wales went bankrupt that year.

Analysts say tyre exports continue at high levels, thanks in part to extremely low freight rates to Asia. A news report last year claimed that more than half the 22 million tyres discarded by Australians each year are shipped overseas, with more than 1,000 containers containing whole tyres leaving Australian ports each week bound for Vietnam.

It is claimed to be cheaper to ship tyres from Melbourne to Vietnam than to Sydney.