Global tire manufacturer Michelin and Scandinavian tire recycler Enviro have signed a letter of intent that will see Michelin acquire 20% of Enviro’s shares in what the two have termed as the start to a long-term partnership.
The effort is part of Michelin’s move to expand its sustainability portfolio. In 2018, the company acquired US-based Lehigh Technologies and has continuously invested to see the latter’s efforts of turning scrap tires to micronized rubber powder (MRP) come to fruition in Europe.
The recent agreement between Michelin and Enviro marks the second major investment in recycling. The tire manufacturer will invest approximately $3.25 million, becoming Enviro’s largest shareholder. It will then acquire 116.2 million shares, which is equal to a 20% stake.
Last September, Enviro put up a holding company in the United States to foresee the establishment of recycling plants that it will co-own in the region. The move was part of the company’s implementation process of its “co-ownership” strategy. Enviro is currently pursuing partnership projects with EE-TDF Cleveland L.L.C. in Texas and Treadcraft Ltd in New York.
The deal with Michelin will see the company scale up its pyrolysis technology through a co-owned tire recycling plant. Michelin will use its “industrial know-how” to contribute to the expansion of the plant as well as contribute to the research, development, and production.
Enviro will bring its proprietary technology to produce high-quality materials. The technology can be effectively used to recover carbon black, pyrolysis oil, gas products and steel from old tires. According to Michelin, the tire industry faces a lot of recycling issues. Up to 1 billion tires reach end of life every year. This initiative fits well in its long-term goal of achieving an 80% sustainable content in its Michelin tires by 2048.
The two partners will also work towards increasing the application of materials recovered through pyrolysis. By developing the technology further, Enviro can recycle other strategic and finite materials and expand the application of recovered carbon black. The company acknowledged that the partnership would provide improved conditions for putting up more recycling plants globally.
The partnership is yet to be completed. According to Enviro, the two may finalize it by April 29, 2020. The agreement allows Enviro to collaborate and work with other tire manufacturers and suppliers until July 21. The company will then arrive at a final partnership agreement with Michelin mid-year.