Tire Shredding Business Overview
A tire shredding business processes used tires into recycled rubber materials through mechanical shredding and size reduction. The process involves using heavy machinery to cut and grind tires into smaller pieces.
The rubber materials produced through shredding can range from large 2-inch chips down to fine powder, depending on customer requirements.
The most common business models in this industry include:
- Processing Center Model: A facility that receives whole tires and processes them into various sized rubber products for resale
- Mobile Shredding Model: Operators travel to tire collection sites with portable shredding equipment to process tires on location
- Collection and Processing Model: Businesses that both collect tires from automotive shops and process them at their facility
Related: Checklist To Start A Business
How Do Tire Shredders Make Money?
Tire shredding businesses generate income by processing waste tires into marketable recycled rubber products while charging disposal fees to tire suppliers. The transformation of whole tires into various rubber materials creates multiple revenue streams.
The main ways tire shredding operations bring in revenue can include:
- Processing Fees: This represents the largest income source because tire retailers and auto shops must pay for proper tire disposal based on environmental regulations. Most processors charge $2-5 per passenger tire.
- Crumb Rubber Sales: Finely ground rubber particles sold to manufacturers for use in new products like playground surfaces, athletic fields, and asphalt
- Tire-Derived Fuel: Shredded tire chips sold as fuel supplements to cement kilns, paper mills, and industrial boilers
- Steel Recovery: Metal wire extracted during the shredding process and sold to scrap metal recyclers
- Landscaping Materials: Larger rubber mulch pieces marketed for landscaping and playground cushioning
- Construction Materials: Shredded tire products used in civil engineering applications like road base and septic drain fields
- Tire-Derived Aggregate: Processed rubber pieces sold for use in construction projects as lightweight fill material
Industry Statistics
The tire shredding industry provides mechanical processing services to convert waste tires into reusable rubber materials. This industry operates under NAICS code 326299: All Other Rubber Product Manufacturing. Here are some statistics that show the current state of the tire shredding industry.
Tire Shredding Industry Size & Growth: The tire shredding market generated $2.12 billion in revenue last year. The industry has shown consistent expansion with a projected annual growth rate of 5.7% through 2032. This growth stems from increasing environmental regulations on tire disposal and rising demand for recycled rubber products in construction, landscaping, and manufacturing applications (Market Research Future).
Tire Shredding Profit Margins: Processing centers typically achieve gross profit margins between 25-35% when combining disposal fees and material sales. Net profit margins average 8-12% after accounting for equipment maintenance, labor, and operating costs.
Startup Stories
Costs To Start a Tire Shredding Business
Opening a tire shredding facility generally costs between $500,000 and $2.5 million, depending on the scale of operations and equipment capabilities. The investment amount changes based on facility size, machinery quality, and processing capacity.
Here are some of the main costs to consider when starting a tire shredding business:
Equipment and Machinery: Primary shredding machines, conveyor systems, and screening equipment range from $250,000 to $1.2 million. The basic setup includes a primary shredder, secondary granulator, and material separation system. Depending on the end products produced, additional equipment like magnetic separators and bagging systems may be needed.
Facility Setup: Commercial space requirements start at 5,000 square feet and can require upfront costs of $75,000 to $200,000, including first and last month’s rent, security deposit, and necessary building modifications. The space needs proper ventilation, loading docks, and storage areas for both whole tires and processed materials.
Transportation: Vehicles for tire collection and product delivery cost $50,000 to $150,000. This includes forklifts for material handling and at least one truck for tire pickup services.
Environmental Permits: Operating permits and environmental compliance documentation cost $15,000 to $40,000. These permits cover air quality, waste handling, and stormwater management requirements.
These figures represent general estimates and actual startup costs will vary.
Resources:
US Tire Manufacturer’s Association (previously called the Rubber Manufacturer’s Association)