About 1 billion tires are discarded each year, creating a major need for additional uses for recycled rubber. Softstone, Inc., an Oklahoma-based company that recycles automobile tires, has invested in Levgum, Inc., an Israeli startup that Softstone says has developed a new technology to de-vulcanize rubber.
Rubber is vulcanized by fusing natural or synthetic rubber with sulfur in order to create strong molecular bonds for the creation of tires and other high-end products that must retain their rigidity under extremes of temperature.
The vulcanizing process, invented by Charles Goodyear in 1839, is almost too effective since it is extremely difficult to break down the polymer bonds in order to make new tires out of old tire carcasses. More than 17 million tons of rubber is discarded annually worldwide, including one billion tires, but only 6 percent of discarded rubber products, including tires, are recycled into new rubber materials.
Softstone now grinds up used tires into small bits of “crumb rubber” which it sells to manufacturers of such low-end products as doormats, jogging paths and playground equipment. In the future, the company plans to mix a patented chemical agent manufactured by Levgum into the crumb rubber to de-vulcanize it, by freeing the bonds created from the sulfur.
Softstone President Keith Boyd said the company thinks the rolled and treated rubber can then be blended with virgin rubber in a 15-85 percent mix and then re-vulcanized to create new tires. The recycled rubber will also lower the cost of producing tires, since it will be significantly cheaper than virgin rubber, Boyd said.
“The objective is to create higher-value products than we have in the past in addition to taking the tires out of the waste stream,” he said. “This technology has much more potential that anything we’ve been involved with before.”
Until now, rubber recycling was done by incineration, which releases harmful gases into the atmosphere; Levgum’s chemical agent is a white powder that doesn’t emit any hazardous emissions or waste by-products.
In March, Softstone paid $250,000 to Levgum for 10 percent ownership in the company and a seat on the startup’s board of directors. It also has the licensing and sublicensing rights to the Western Hemisphere for the de-vulcanization technology.
The deal was brokered by the executive director of the America-Israel Chamber of Commerce – Florida, Chuck Ruddy, who met with both sides on separate occasions in the United States and Israel.
When Levgum, based in Kiryat Alba, Israel, approached the Chamber for help in finding U.S. investors, Ruddy stepped in and connected the startup with investment banker Art Beroff, who in turn linked up Levgum with Softstone. Softstone tested the Levgum agent at the Akron Rubber Development Laboratory in Ohio. After the tests were successful, the company immediately wired its investment to Israel.
“(Boyd) took it to Akron and (Levgum) did phenomenally well,” Beroff said. “He had a core to cut a deal. Not only would we invest, but it was important that we took the rights to the Western Hemisphere.”
Levgum is led by Russian immigrant Dr. Lev Beirakh, who is recognized worldwide as an authority on rubber recycling, and Yinon Elroy, who served as deputy director-general of GreenTech, the environmental division of Israel’s Mofet B’Yehuda business incubator.
Having communicated with Levgum via the Internet and over the telephone throughout the spring, Boyd said he’s looking forward to meeting with his new partners, possibly in Israel.
Boyd said he hopes to capture 5 to 10 percent of the tire recycling market in the Western Hemisphere and hopes manufacturers will incorporate up to 15 percent of recycled material into the production of new tires. He said he’s now negotiating deals to sublicense the technology to operators in Canada, Mexico and South America.
According to Ruddy, Softstone’s connection with Levgum and the benefits it has received point to the continued value of doing business with Israeli companies.
“Israel is the source of unique technologies which can tip the competitive balance in many industries,” Ruddy said.