I am very pleased with today’s transaction, another milestone achieved, and a token of Enviro’s ability to attract several high-quality institutional investors supporting our investment case. We now have the financial flexibility allowing us to accelerate the pan-European expansion of tire recycling plants, together with our joint venture partners, while focusing on our core competencies, and continue our journey towards making the tire industry circular.
This is truly a game changer in the industry. I think this will be paving the way for pyrolysis and the possibilities for sustainable materials and the circular economy – both for the carbon black materials and the tire pyrolysis oil. The three different parties [Enviro, Antin Infrastructure Partners, Michelin] all contribute with significant and critical experience.
The breakthrough with Antin was not accidental but the result of a deliberate strategy where we identified and implemented step by step the actions needed to succeed.
I am very proud and pleased with today’s announcement which represents a significant recognition of Enviro’s technological and market leadership in recycling of tires. With Antin’s successful track record in scaling infrastructure platforms and its strong industrial understanding, and Michelin’s world-leading position in sustainable tires, we have found excellent partners to jointly accelerate our pan-European plant expansion and contribute to making the tire industry circular. We will now be able to focus on our core business and competencies such as technology and material development, optimization and quality control.
How the impact of the sanctions affect Enviros business cannot be assessed at this time, but many companies are reviewing their long-term risks related to the supply of materials from different countries. It is important that the market is informed that we are monitoring developments now that companies in the EU are potentially experiencing a limited supply of carbon black.
This order is yet another example of the growing interest in the oil we can recover and deliver to the market. Increasing volume requirements among our customers also confirm the need for expanded recycling capacity that we have identified and based our expansion plans on.
The industry is beginning to realize that increased circularity is a must, and that the technology Enviro has developed will be crucial for the transition. Michelin’s and Bridgestone’s assessment of future needs for recovered carbon black is clear evidence of this.
This order is very important for us since it is yet more confirmation of the commercial potential of our oil and our recycling technology. A large player in the oil industry in our own home market taking this step provides important support for our expansion in both Sweden and internationally.
Owing to our unique recycling technology, we can help the tyre industry meet the demands from both vehicle manufacturers and customers as regards reducing carbon emissions and achieving more circular management of valuable raw materials. Our ISCC-certified carbon black and oil will facilitate this transition in several industries, and we are now implementing our expansion plan to meet the drastic increase in demand that we expect.
This is a particularly strategic recruitment since we have found in Fredrik Alpner someone who has exactly the experience and expertise that are critical to this very phase that Enviro is now experiencing. Fredrik Alpner will play a key role in our continued development and the recruitment marks a new and important step in our important work to industrialise our technology and carry out our expansion plan.
Incredibly exciting developments have taken place in the company in the past few years, and many decisive steps towards increased commercialisation and industrialisation have been taken. Enviro was early to realise the opportunities of more efficient recycling technology and more circular methods. It is, of course, very gratifying that the world is finally beginning to catch up with the company in this regard
Converting the loan to a grant is clearly financially beneficial, but most importantly, it provides further tangible evidence of how we are gradually executing and realising our commercialisation and expansion
The past autumn served as a clear reminder to the world of the acute need to reduce climate impact and increase the circular use of valuable raw materials. This really motivates us, our suppliers and our customers.
Our oil can thus strongly improve the producers’ ability to meet the reduction demands that are based on taxation in relation to the proportion of fossil raw material.
We are incredibly happy that our work is once again receiving international attention. The industry and the tyre industry are making great strides towards a more sustainable future and Enviro's technology is an important component to achieve circular flows.
Thanks to our technology, several players in the tyre and rubber industry have already increased their sustainability. As we expand our industrial footprint, we’ll be able to contribute even more to this transition that we’re seeing all industries striving for.
The certification is a milestone in the company’s development as it means that it will be easier for our customers to achieve their sustainability targets using our oil and carbon black. As a result, the customer benefit and commercial value of our technology and products will become even clearer.
There are few tyre manufacturers in the UK, so the local demand for carbon black is small. However, it is easy to export recovered carbon black and since the global demand is strong, we see no problem whatsoever in also selling the carbon black. In conclusion, this means that we also foresee favourable fundamental conditions for establishing plants based on our recycling technology in the UK.
Once again, Michelin has shown that there is no contradiction between increased sustainability and high performance in the tyre industry. This confirms the potential for recovered carbon black and also gives significant credibility to Michelin’s long-term ambition that all tyres will eventually be completely made from sustainable material.
Naturally, the exact number will depend on the size of the plant and the volumes that we recover, but there is no doubt that this type of facility generates new jobs.
Naturally, it is fantastic that only a few months after we entered our strategic partnership, Michelin has already introduced a racing tyre that is not only more sustainable due to our technology, but has also proved to increase performance. It is just further confirmation that there is no contradiction between increased sustainability and high quality, which bodes very well for the continued development of products based on our recovered materials.
Innovation is the core of the circular economy and a necessity for a sustainable future, which is the very foundation of Enviro's operations. Attention like this is an important part of spreading global knowledge of developments in our industry and of Enviro. It also reinforces our position as the leading actor, which strengthens the foundation of our expansion. We are honoured by the award.
Through the partnership with Michelin, we will achieve our first full-scale recycling plant, which is decisive for our ability to scale up and commercialise our technology. The partnership with a leading tyre manufacturer also gives us unsurpassed opportunities to improve our recovered carbon black and pyrolysis oil, which will naturally further strengthen our position on the market.
There are many pieces that must fall into place before everything is ready, and it has unfortunately taken more time to complete our negotiations than we previously estimated. However, both parties remain equally convinced of the major advantages of our planned strategic partnership and are thus equally as determined to get the agreements into place.
Despite the pandemic and the ensuing delays, we have now been able to finalize our agreement regarding a strategic partnership with Michelin. This is obviously a very important milestone for Scandinavian Enviro Systems and also a very significant validation of our technology given Michelins position in the global tyre market. The protracted negotiations were never part of the plan but on the up-side both Michelin and other international manufacturers were given more time to test our recovered carbon black with great results. This and the now reached agreement bode well for the future.
A transition to recovered carbon black gives the rubber mixture the same or better performance than when virgin carbon black is used, this is in line with Trelleborg's established goals of reducing emissions of CO2 (GWP) from both the company's processes and products.
Based on the market response and our own calculations, we judge that the oil recovered from end-of-life tyres could contribute to a strong increase of revenues from recycling plants that use our technology.
Our negotiations are continuing with undiminished strength, but factors including the ongoing pandemic, with the accompanying travel restrictions, have meant that we have been unable to proceed as quickly as we had hoped. Therefore, we have jointly decided to prolong our letter of intent until the end of October this year and our joint assessment is that we will be able to provide new information at the end of October this year at the latest.
My role will be to ensure smooth collaboration between customers and partners, ensure that we follow budget, live up to set conditions and ensure quality assurance of Enviro's deliveries. I believe my experience in the energy and industry sectors will contribute to a favourable development.
Michelin is one of the world’s leading tyre manufacturers and this collaboration means that we can become established globally in a way that we would never have managed alone.
Enviro’s technology is becoming increasingly relevant as more industries are becoming environmentally aware. Five years ago, few companies were interested in CO2 negative production, but today there’s widespread talk of CO2 reduction.
Interest in recycling in general and recycled carbon black in particular has increased sharply this year, which has strengthened the market position of Enviro and our technology.
Enviro’s patented technology follows European legislation regarding waste combustion and is very competitive in India. One of the driving forces for our technology in India is connected to producer responsibility, something that was confirmed during meetings with tyre manufactures, among others. We have already had a meeting with an Indian tyre manufacturer back home.
Our production has been running in accordance with both certifications for a long time, being certified formally is important in our customer dialogues, as it’s often required.
EnviroCB C550 has the capacity to replace virgin carbon black in a new infrastructure application area by up to 100 per cent. It’s highly significant that an international rubber producer is stepping forward in this way to approve the material and is conducting production tests. This also benefits our future plant customers.
In recent years, the general materials recycling market has quite clearly shifted. More than ever, political and fundamental market forces are pushing the world to focus more clearly on reducing resource consumption and demand that incineration be replaced with materials recycling.
The main driver for Enviro is that most of the major players in the tyre industry sets goals to increase the proportion of recycled materials in newly manufactured tyres.
Supplying materials to Volvo Cars for two years is a real quality anniversary and a weighty argument for players who are looking to invest in our plants.
This proves the strong position of our technology in the international tyre-recycling market. Vanlead is one of China’s largest, and one of the world’s most progressive tyre producers, and has chosen Enviro’s technology to integrate tyre recycling with their own tyre production
We definitely have the capacity for new customers, and considering that the annual global market for carbon black is anticipated to exceed USD 25 billion by 2020, we see great potential for our material. Every time a new customer sees the quality and environmental benefits, we get one step closer to closed cycle rubber production.
The tyre and automotive markets are primary segments for Enviro, but it is important to show that the recycled materials meet quality requirements in for example the construction industry and in general merchandise, where large amounts of standard rubber products are used.
China is the world’s biggest tyre market and new solutions for processing end-of-service tyres more circularly are necessary from both environmental and resource-related perspectives. Vanlead wants to take the initiative in the industry.
The fact that a world-leading vehicle manufacturing company such as Volvo Cars has chosen to use Enviro's recycled materials is very important in negotiations with all our interested parties. Interest is increasing in both the carbon black product and the recycling technology.
Both Enviro and Vanlead see the great potential for Enviro's environmental technology with respect to materials recovery from end-of-service tyres in China. A joint venture with one of China’s biggest tyre manufacturers enables both parties to capitalise more rapidly and successfully on the world's biggest carbon black market.
Lately, we’ve received positive feedback from several international tyre producers that have performed tests on our reclaimed carbon black material. China is the world's largest market for tyres, rubber, and carbon black; there is great awareness that raw materials are limited; and state-owned Vanlead is the first to exhibit this high level of ambition. These are all positive indicators.
Each new application that is approved by the industry opens up new opportunities for customers of both facilities and Enviro’s reclaimed materials worldwide.
We have gone through a detailed recruitment process in order to find the right profile, experience and motivation, and I am confident that we have achieved just that. With a new Sales Manager, we will double our sales efforts and focus on both existing and potential clients. Enviro is in an ideal position to strengthen its market focus.
The deal with AnVa Polytech, which delivers components containing recycled carbon black to Volvo Cars, has been an important step on the path to future deals. Each application approved by the industry means increased opportunities for Enviro’s plant sales.
The EU trademark increases market awareness of the product and will be a good tool selling our recycled carbon black on larger scale and on new markets. It also makes it easier to see how valuable it can be to invest in tire waste.
A modern web also allows for more ways to market the business online, a segment where we will invest more in the future. Visitors will also be able to take part of detailed information regarding the materials Enviro’s patent makes it possible to recover for commercial use.