Scrap tire recycling has been around since the 1970s. However, only 20% of scrap tires are ever processed. Approximately 10% are incinerated, generally for power generation, although air quality issues are always a concern as scrap tires, like coal, are dirty fuel. The casings of approximately 4% are sent to other countries, where they are used in the retread plant or sold as is. Only 2% of the scrap tires are used to make crumb rubber, which is used for modified rubberized pavement applications and in other molded products.
Stockpiles containing scrap tires pose serious health risks as they can be a breeding ground for rodents such as snakes, mosquitoes, and rodents. This is a serious problem. In the United States, scrap tires are produced at an average of 250 million per year. Existing piles are estimated at between 2-3 Billion.
ATP-Advanced Technology Pallets a Nevada Corporation, is proud to introduce its unique and patented RST PAL Pallet, a pallet made of recycled scrap tire rubber. The #8220>RST PAL Pallet is strong, durable, and reusable. This pallet can be used as an alternative to wooden ones and saves on the costs of replacing, repairing, or disposing of wooden ones. RST-PAL Pallets might be serial numbered and bar-coded to insure tracking and retrieval so that they can be used over and over again for many years.
Dan Radke the inventor has granted ATP all patents rights (to the USPTO # 08/680.476) to allow ATP to manufacture the RSTPAL pallets and to market them worldwide in perpetuity.
To offer durable, cost-effective pallets to all industries.
THE EXISTING PROBLEM
- The wood and plastic pallet life cycles are very short and expensive.
- Wood pallets break and need repair or replacement every one or two trips.
- Wood absorbs liquids. It gains weight, breaks, and splinters. It’s also very difficult to clean.
- Industries demand more durable and long lasting pallets.
- Environmental hazards can be created by scrap tire stockspiles
- Current wood pallets are currently consuming more than 3 million trees each year.
THE SOLUTION
- RST-PAL pallets can be purchased and maintained for less money.
- RST PAL pallets are more durable, and indestructible.
- The load capacity of RST-PAL pallets is 15 times that of similar wooden pallets.
- RST PAL pallets are stackable, rackable, more durable, and longer lasting.
- RST-PAL pallets make unique use of recycled scrap tire rubber.
- RSTPAL pallets are guaranteed for a number of years.
- Worldwide, RST-PAL pallets are unrivaled.
TECHNOLOGY, PROCESS
- The patent that covers the materials process and the manufacture of pallets was issued by USPTO #08/680.476.
- International (PCT Patent Protection) filed.
- Machines for production lines are available and have been sourced.
- You can easily find raw materials.
- Flexible production lines are available to produce different sizes of pallets while maintaining high quality and yield.
- Product is “ready for production”. Qualification and all R&D completed.
- Process that uses modular capacity to allow for rapid manufacturing expansion.
- Factory is environmentally clean without any waste stream.
- Prototypes are now built, tested, qualified, and certified.
THE MARKET
- The U.S. consumes 800 million pallets annually (National Wooden Pallet and Container Association. NWPCA).
- RST PAL pallets have the longest life cycle cost of any material, including wood, aluminum, or plastic.
- Global Pallets-leasing options available.
- Marketing must be focused on both closed- and open-loop distribution.
- International markets and licensing opportunities (Internationally-protected patents).
- U.S. Government Agencies and Contractors.
- The U.S. government mandates product replacement using recycled products first.
MARKET QUOTATIONS
- It is urgent that ‘#8220’ Quality, Reusable Multi-trip Pallets instead of poorly constructed Single User Pallets be made (Reference: NWPCA)
- Contractors that do business with government agencies are required to buy “ and “ environmentally-friendly products.
Products first made from recycled products. (Reference: President Clinton Executive order)
SALES
- Different industries gave prototypes positive feedback, as did government agencies and military.
- Potential sales pending investment and production ramp up.
- Certain markets may be eligible for environmental incentives (sub-contractors to the government).
- All licenses, permits, and governmental agency acquired or in support for project.
PALLET COST COMPARISON – OVER FIVE YEARS
- Significant savings can be made by using RSTPAL pallets. They cost $22 per RSTPAL pallet, compared to $133 for wooden pallets over 5 years. (See topic 4.2.
INVESTMENT REQUIRED and USE OF FUNDS
- $6M investment for 35% ownership estimated to reach profitability within 12-18 months.
- 50% of the net profit before tax will be distributed to shareholders starting in the second fiscal year. This is provided that it does not adversely affect the planned expansion. The other 50% will be dedicated to growth.
- Funds raised will be used for plant setup, operations, equipment, marketing and sales.
First year operation with two production lines is expected to produce 1,137,000 units, with a projected net profit of over $8 million.
INVESTOR DISCUSSION
- Projections reflect the return of the original investment in less than two years.
- Based on five years of net earnings discounted to present value, it is estimated that the valuation was approximately six times.
- Present Value of five years of projected net earnings at a 25% discount (incl. risk factor) is $98 million.
- Reaching less than 1% of the market share with five plants within five years.
- Projectioned revenue of around $402 million
- Projected net profit before taxes of approximately $178million
- Management Team – Strong and professional with highly specialized consultants.
- Exit Strategy alternatives: (a) IPO after two years; (b) Acquisition; (c) Private ownership with a long horizon of profits.
‘#8212’ RST-PAL Pallets MANUFACTURED OUT RECYCLED SCRAP TIRES
ADVICE FOR CLEANING AMERICA’#8217’S STRIP TIRES
1.1 Mission
ATP is a production and marketing company that specializes providing durable and cost-effective pallets from used scrap tires to all industries. The manufacturing process and the product are patent protected worldwide with no existing competition.
Pallet users are both producers of commodities and companies that use pallets as their main distribution means that they require a longer-lasting and stronger pallet to replace wooden pallets which need constant repair, replacement, and disposal. The National Wooden Pallet and Container Association states that a wooden pallet gives service for only one to two trips before having to be repaired or replaced. Pallet users have to buy pallets more often due to the limited life span of wooden (and plastic!) pallets.
Scrap tire stockpiles throughout the United States represent dangerous environmental hazards as they are breeding grounds for mosquitoes, rodents, and snakes, and create potential hazards for fires, which are extremely dangerous and expensive to extinguish.
ATP will reduce hazardous scrap tire stockpiles and help conserve some of the 3.5million trees used each year to make wooden pallets. ATP will locate its manufacturing plant in rural areas that are close to major cities, where it is most needed.
ATP will be able to make profits and return excellent returns to its shareholders while also financing the company’s aggressive growth. ATP will provide a safe, fair, and creative environment for employees that encourages creativity, innovation, and diversity.
1.2 Objectives
- Two production lines to be established at the Stamford, Texas plant. This will allow for the production of 1.2 million pallets annually.
- To increase production annually by opening a new plant with two additional lines of product each year for years 2 through 5.
- Achieve targeted market share of 0.15% in the first production year to 0.75% by the end of year five. The U.S. produces 800 million pallets annually.
- A projected market share of 0.15 percent in the first year is expected to produce net profits of $8,000,000 (before taxes) and 0.
Net profits are expected to reach $66 million for 75% in the fifth year of production. The five-year production period’s cumulative profits, before taxes, are projected at $173 million.
Success keys 1.3
ATP will succeed for the following reasons:
- There is a pallet market in America that has over 800 million pallets being sold each year. It is estimated that about 60% of all pallets in the United States are hardwood. These are ATP’’s most targeted customers.
- RST-PAL pallets are more durable than plastic or wooden pallets and have lower life cycles.
- RST-PAL pallets have a patent protection and are virtually indestructible. They can carry 15 times more weight than wooden pallets.
- RST-PAL pallets are guaranteed for years.
- Pallets, which are well-known, needed and established products, can be introduced to the market without introducing a brand new product. RST PAL pallets don’t represent a new product. However, they are far better, more durable and more long-lasting than other similar products on the market. RST PAL pallets can be introduced to pallet buyers through conventions and trade shows. ATP’’s sales representatives will be located in specific marketing regions. This will ensure that advertising and marketing costs are low. Dallas/Fort Worth (Texas) is the first targeted region. It is located close to Stamford.
- An executive order by the U.S. government established a “buy recyclable first” policy for all government agencies, contractors, and departments, including the Department of Defense, and Department of Transportation. ATP will target state and federal agencies to market RSTPAL palettes.