Scrap Tires | Scrap Tire News | Archived Article

KTI Inc., a Guttenberg, NJ-based waste and recycling firm announced two deals in late 1998 that move the company into the tire recycling arena and will expand the firm's overall recycling capabilities.

In November, KTI signed a letter of intent to form a joint venture with the majority bond holders of a Ford Heights, IL tires-to-energy project. Under the plan, KTI will assume 50 percent ownership of the 20 megawatt power plant.

Also, in November KTI acquired the assets of Recovery Technologies, Inc. (RTI), a Cambridge, Ontario, Canada tire recycling equipment and technology firm for $3.6 million, including $1.1 million in cash and $2.5 million in assumed debt. Recovery Technologies manufactures and markets turnkey cryogenic tire recycling systems and operates a crumb rubber processing facility in Cambridge. KTI plans to continue operation of the Cambridge facility, which currently processes 1.2 million tires per year into crumb rubber for various markets and serves as a showroom and demonstration site for RTI's cryogenic processing technology.

KTI also announced it will begin its expansion of Recovery Technologies' crumb rubber processing system with an installation at the newly-acquired Ford Heights site.

The reorganized entity will be named New Heights Recovery & Power LLC. In addition to the crumb rubber processing operation, KTI is planning to bring its other recycling businesses to the site including paper recycling, and processing post-consumer and post-industrial plastics. The facility when fully developed will employ up to 350 people.

Located in the Chicago suburbs, the plant was built in 1996 for an estimated $110 million to burn tire-derived-fuel and produce electricity. During the facility's start-up testing, the state passed an amendment to the Illinois Retail Rate Act which repealed certain rate incentives to the facility forcing the owners and investors to seek protection under federal bankruptcy laws.

The bond holders plan to convert $80 million in bonds and other claims into equity. KTI will invest up to $17 million in equity for working capital, retrofitting and upgrading the facility. According to KTI, the three phase project is designed to turn the New Heights site into an "environmental campus" encompassing KTI's recycling operations and its other environmental business activities.

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