Tyre Recycling Business Plan: Your Guide To Starting Today
A profitable tyre recycling business helps protect our environment. People are jumping on this bandwagon.
Just because it offers solid returns, but don’t be fooled! Listen up; there’s a lot that goes into it. This business isn’t just about collecting tyres and making money. There’s:
- Planning
- Investment
- A lot of hard work involved
To get it right, you need a clear business plan. As investment is such a huge amount, you can’t afford one misstep!
We are going to share a solid Tyre recycling business plan with you. We will discuss everything from what you’ll need to start to how much it will cost. So, stick around if you’re thinking of jumping into tyre recycling.
4 Things to Consider While Making a Tyre Recycling Business Plan
There are four important things to focus on while starting a tyre recycling business:
- Business Setup Requirements
- Investment & Costs
- Profit & Revenue Sources
- Challenges & Solutions
We’ll go through each step. It’ll help you figure out everything you need. From the setup to making money. Ready? Let’s discuss each one step by step.
1. Tyre Recycling Business Setup Requirements
To start with your business plan, consider the basic requirements for your recycling business. You must think about these before getting started.
1. Finding the Right Place (Land/Factory)
First and foremost, you need dedicated land for your recycling operation. It will serve as your warehouse and operational space as well. So, it should be big enough for tyre storage and processing.
Your commercial space requirement depends on your business size. For a business with small operations needs, the amount of space needed is between 500 and 1000 square meters. Land between 2000 and 3000 square meters is needed if you are planning a bigger operation.
You have multiple options when it comes to getting the land. If you have your own land, you can use that, but if you have to purchase it, you can think of leasing it as it is advisable. A long-term lease agreement could be an ideal deal.
When leasing the property, look for land near industrial zones. This will make tyre collection easier, and the demand for the end product will also be higher.
2. Raw Materials
The raw material you’ll be working with for your tyre recycling business is scrap tyres. But where will you get them? And what form do you need them in?
You can get the tyre from:
- Scrap Dealers & Workshops: These are your main suppliers. They collect used tyres and can supply you in bulk.
- Tyre Shops & Car Garages: Local tyre shops often have piles of old tires. You can partner with them for regular supply.
- Landfills & Dump Sites: Some tyres end up in landfills. You can buy them for recycling.
- Public Collection Drives: You can even run your collection drives to gather tyres from the public.
Ideally, you want tyres to be in whole form. Especially when collecting from workshops or tyre dealers. Some dealers might offer pre-shredded tyres, but these might cost a bit more.
Make sure you build solid partnerships with these sources. Always inspect the tyres before purchasing to ensure they’re not too damaged or mixed with other waste materials.
3. Legal Procedures (Licenses and Permits)
Next, you need to settle the legal procedures for your business. This includes obtaining permits and licenses. These requirements vary by location. So, make sure to check the rules in your area before proceeding.
Here’s what you’ll typically need:
Register Your Business
First, register your business legally. Decide on your business structure (LLC, corporation, etc.). You’ll also need to pick a business name.
Environmental Permits
Since you’re in recycling, you’ll need environmental permits. These cover waste management and your impact on the environment.
Operating License
You’ll need a general operating license to run your business. Check with local authorities to know the specifics.
Health and Safety Permits
Your facility must meet safety regulations. Health and safety permits ensure your business complies with these rules.
Zoning Permits
Make sure your land is zoned for industrial use. Zoning permits are essential if you’re dealing with waste processing.
License and permit regulations differ from one place to another. You should consult a local consultant for the correct procedures. They can help you identify and comply with all license and permit rules in your area.
4. Machinery You’ll Need
Let’s discuss which machinery turns scrap tires into useful materials. Your machinery selection for tyre recycling depends on what end product you want to make.
Shredders
You need a shredder to break tyres into smaller pieces. If you’re starting small, a basic shredder works. It can handle a few tons a day. But if you’re scaling up, go for a bigger shredder to process more.
Pyrolysis Plant
Get a pyrolysis plant if you want to turn tyres into oil or gas. It’s a bigger investment, but it brings good returns. This plant heats tyres in a special way to produce fuel oil, gas, and carbon black.
Rubber Processing Machines
Want rubber powder or granules? You’ll need a rubber processing machine. These machines grind tyres into powder. The powder can be used in construction, cars, and other industries.
Steel Wire Extractor
Tires often have steel wires inside. If you plan to recycle the steel, you need a wire extractor. This machine pulls the steel out, leaving you with both rubber and metal to recycle.
2. Investment & Costs
Your investment costs depend on which size of recycling plant you plan to establish. So, decide the scale carefully!
If you want a smaller setup, $50,000 to $100,000 should cover your:
- Land
- Machinery
- Permits
You can expect costs between $100,000 to $500,000 for medium-sized operations. You’ll need:
- More land
- Larger machines
- Some extra expenses
For a larger operation, $500,000 and beyond. More machines, more staff, and a bigger facility are necessary.
This investment will include land, machinery, licenses, and working capital. Never forget that you will need extra money to cover the initial operational costs.
The upfront cost is high, but the long-term benefits outweigh it. Choose reliable, energy-efficient machines.
Costs to Keep in Mind:
Here are some other costs you should also have in mind while proceeding:
1. Machinery Costs:
Machinery is expensive. But obviously, it’s a crucial investment. You’ll need:
- Shredders
- Pyrolysis Plant
- Processing Machines
While the upfront cost is high, the long-term benefits will be worth it. Go for machines that are reliable and energy-efficient.
2. Electricity Costs:
Your machines will run on electricity 24/7. It means a high monthly bill. Be ready for ongoing energy costs. Make sure to plan for it in your budget.
3. Labor Costs:
Skilled workers are a must to operate the machines and manage the technical tasks. You’ll have to pay them well to attract the right talent. A skilled team will make your business run smoothly and efficiently.
4. Marketing Costs:
You should also have marketing price in your mind. You would spend money on offline and online marketing campaigns to get most of our recycling business. So it’s better to think about it beforehand. Invest in digital marketing, including:
- Online ads
- Social media outreach
- Branding
Without proper customer awareness about your products, they will not make purchases. Your goal should be to establish maximum visibility of your brand across the market segments you want to reach.
3. Profit & Revenue Sources
Here are the three main ways you can generate profit from the tyre recycling business:
1. Rubber Powder
The production of rubber powder results from shredding and grinding discarded tyres into tiny granules. This product is in high demand, especially in:
- Construction: Used in road paving, rubberized asphalt, and waterproofing materials.
- Sports & fitness industry: Essential for playground surfaces, running tracks, and artificial turf.
- Manufacturing: Incorporated into many products. Such as shoe soles, rubber mats, and other consumer products.
Many industries need rubber powder, making it one of the most profitable products in tyre recycling.
2. Fuel Oil
The technique of pyrolysis transforms tyres into fuel oil through a production process. This fuel oil serves as a cost-effective diesel substitute, which various sectors currently adopt.
- Factories & industries: For power generation and machinery operations.
- Oil refineries: These are where it is further processed into usable fuel.
- Brick kilns & cement plants: These serve as an economical energy source.
With the rising demand for alternative fuel sources, selling tire-derived oil can be highly lucrative.
3. Steel Wires
Tyres are reinforced with steel wires for strength. So, you can extract the steel from tyres as well. You can sell that to:
- Metal recycling companies: They melt them down for reuse.
- Automotive & construction industries: Where they are repurposed into new products.
Steel prices remain fairly stable. Selling scrap metal is a great way to increase your revenue.
How Much Can You Earn?
The profit margin depends on how many tyres you process. The selling of the products depends on the waste you have collected.
A well-run tyre recycling business can be highly profitable because of its strong growth potential.
4. Challenges & Solutions
Every business has challenges. Tire recycling is no different. You need to prepare for problems and find solutions as part of the whole plan.
Here are some challenges and how to handle them.
Tire recycling must be eco-friendly. If done wrong, it causes pollution. Poor waste disposal and pyrolysis plant emissions harm the environment. So, to avoid this. You can:
- Install air filters and emission-reduction technology.
- Use modern pyrolysis plants to lower harmful emissions.
- Dispose of fibre residue and waste properly.
- Follow environmental laws and get necessary permits.
Another issue that you encounter is competition. Tyres are already being recycled by many businesses. If your products are not competitive, customers will leave. To tackle with the competition:
- Produce high-quality rubber powder, fuel oil, and steel scrap.
- Keep prices competitive without compromising quality.
- Market your business as reliable and eco-friendly.
- Offer different product sizes and custom solutions.
Get Help From Experts
Need help making a winning tyre recycling business plan? Our team of experts at Reliable Startup can guide you.
Contact us now to get started!
FAQs
1. How do I open a tyre recycling company?
Get land, buy machinery, and get licenses. Build contracts for tyre collection. Set up shredding and processing units. Market your recycled products.
2. Is rubber recycling profitable?
Yes. You earn from rubber powder, fuel oil, and steel scrap. Demand is high in construction, automotive, and industrial sectors.
3. How much is tyre recycling?
Costs vary. Small-scale starts at $50,000. Medium-scale needs $100,000–$500,000. Large-scale requires $500,000 or more.
4. How big is the tyre recycling market?
The market is growing fast. Rising demand for recycled rubber and eco-friendly solutions makes it a strong industry.