Tire and Rubber Recycling in the US Industry Market Research Report Now Available from IBISWorld

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Revenue for tire and rubber recycling firms has been volatile over the past five years due to falling construction markets and slashed school budgets. Nevertheless, the industry has expanded over the period, with small-scale, regional firms taking hold. The industry will continue to grow over the next five years as the construction and industrial sectors recover and the price of rubber rises. For these reasons, industry research firm IBISWorld has added a report on the Tire and Rubber Recycling industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Despite recession-induced declines, revenue has risen and the industry continues to expand

The Tire and Rubber Recycling industry has grown an average of 1.7% annually over the five years to 2012. However, year-to-year growth has been much more volatile: the 2009 recession led to a 25.0% drop in revenue, which was followed by a rebound of 26.9% in 2010. Revenue primarily comes through sales of scrap rubber to the industrial sector for use as fuel. With the continued steady recovery of the industrial production index (which measures total output of industrial products), revenue is expected to increase 2.4% in 2012 to reach $1.0 billion. The other major uses of scrap rubber are as fill in construction projects and in flooring for athletic facilities and playgrounds. These markets have had a tough time over the past five years, though, because the construction sector has not recovered from its 2007 crash, says IBISWorld industry analyst Dale Schmidt. In addition, school budgets, which pay for most playground and athletic facility uses, have been slashed in response to falling tax receipts due to the high unemployment.
Although downstream markets are shaky, the industry has still expanded. Over the 10 years to 2017, the number of industry firms is expected to grow an average of 3.1% annually. Most of the industry comprises small-scale firms that operate only in a small geographic area due to high haulage costs. However, the industry's only major player, Liberty Tire Services, operates across many regional markets, says Schmidt. It has been on an acquisition spree in the five years to 2012, primarily to gain entrance to new regional markets and new product lines. The Tire and Rubber Recycling industry is estimated to have a low level of concentration overall. Market share concentration has increased over the past five years as competitors, especially Liberty Tire Services LLC, consolidated to increase profit margins amid the recession. Although industry concentration is classified as low, the concentration in localized areas is often very high. This difference is because there are usually few tire and rubber recycling facilities within localized areas (e.g. in a municipality), and it is often uneconomic to use facilities that are located outside a particular area due to haulage costs. The industry has undergone cycles of consolidation, and further consolidation is expected due to facility regulations and strategic relocating. Rising costs, regulatory complexities, heightened sensitivity to environmental conditions in many communities and increased capital requirements have facilitated consolidation. As a result, many municipalities have elected to privatize their municipal waste disposal facilities
The industry is expected to grow at a steady pace over the five years to 2017. This growth will come primarily from increasing demand from the industrial and construction sectors. In addition, a small part of the industry's output is used in the manufacture of new tires; as the price of rubber continues to increase over the next five years, income from this revenue stream will increase. Also, increased automation of the recycling process will help improve profit margins by decreasing operating costs. As a result, the average profit margin is expected to increase. For more information, visit IBISWorld’s Tire and Rubber Recycling in the US industry report page.

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IBISWorld industry Report Key Topics

This industry operates facilities for separating, sorting and recycling used tires, rubber and rubber scrap. Because of the large volume of tires and rubber waste produced and the durability of the material, rubber is one of the most reused waste materials.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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