14 Dec Ghost busting rCB
Dear colleagues & friends of recovered Carbon Black,
What happened?
Today, December 14th 2023 at 10h00 am CST (17h00 CET), will be the auction of equipment from the Delta Energy liquidation.
Delta Energy in Natchez, USA, was one of the pioneers in recovered carbon black. It was the first company globally that received investment from the tire industry. Dave Abdallah, formerly with Bridgestone Americas, was instrumental for this investment.
Jamie McNutt presented promising rCB results in innerliner and carcass applications coming from this R&D collaboration on the ITEC in 2019.
I assisted Paul Ita on a market assessment for Delta Energy in 2019.
Lucky Braimoh joined Delta Energy in 2021, after gaining experience with tire pyrolysis at the Titan Tire Reclamation Project.
In 2022, Delta Energy, along with Enviro, also were key contributors to the “rCB Rubber Project” of Bridgestone and Michelin. I remember a TEAMS call in which Bob Genovese explained us brilliantly how to pelletize rCB.
I enjoyed my contacts around Delta Energy. I am sad that the company went into liquidation and I want to thank everyone at Delta Energy for their contributions to the rCB industry. Please let me know in private if I can help you in any way.
Update: The whole plant equipment was just sold to one bidder, subject to piecemeal (in stages)
Let’s debug recovered carbon black.
How can we learn from this and strengthen the rCB industry?
Collaboration
All business depends on people and their collaborations. From the outside, it looked like the stakeholders of Delta Energy did not harmonise well. Good collaboration between very different partners is difficult to accomplish but ultimately it is the primary success factor in our industry. For me, an ideal stakeholder group would be a consortium of several companies from the tire, carbon black and petrochemical sectors that invest into an rCB company.
Transparency
Even as an industry expert, I thought that Delta Energy used rotary kilns, but images on the auction site suggest that the reactors used are indeed auger kilns. I believe that, without disclosing sensible IP, more transparency on technologies and processes used will help the public and investors better understand the complex business of rCB production. Live streams and video content could help to document the succesful operation of the rCB industry. This is my motivation as rCB industry documentary producer.
Containment
Literally everything on the Delta Energy auction is covered in black carbon dust. There must have been an incident with carbon escape? Containment of carbon powder is key for safety, health and environment. I think that pneumatic suction conveying is the preferred choice for avoiding containment issues.
Equity investment
I believe that an equity investment of a single tire company in an rCB producer, while carrying a strong and positive message for sustainability, also represents a risk for both sides because of the polarisation.
For the rCB producer it could mean that other tire companies might not want to buy rCB from a company with a competitor stake.
For the tire company it could potentially mean negative press if any issue arises from the rCB producer.
How could those risks be avoided? To me it is clear that the tire industry still should invest in rCB companies. I think the way forward could be the formation of a multi-company investor consortium or debt investment instead of equity investment.
Industry health
Delta Energy was not one of the loud voices in the rCB industry, but a well-known and prominent company. It would be wrong to conclude that rCB production does not work, rather rCB production the Delta Energy way did not work for Delta Energy.
However, companies go into liquidation because of cash flow issues and cash flow from operation might not be steady yet in a nascent industry like rCB. What the rCB industry needs right now is easy access to (debt) capital without hand-cuffing operations and management.
I also think that the public’s obsession for industry leaders might be misleading the perception of the rCB industry. Many rCB companies run “under the radar”, so it would be wrong to judge the rCB industry by the handful of prominent companies.
The way forward
recovered Carbon Black undoubtedly has a future, as proven by 350+ participants of the recovered Carbon Black Conference 2023 in Barcelona. The proposed ASTM D36 classification system for recovered carbon black will be instrumental for its market growth. Now buyers and producers of recovered carbon black can talk the same quality language. Debt investment from consortia or single companies will enable to build a stable supply chain for recovered carbon black (and tire pyrolysis oil / TPO). Let’s debug recovered carbon black!
December 19th update
Rumours are that the whole Delta Energy plant equipment was sold for about 1m$ to a single bidder who might be interested in renewing the building rent and in renegotiating supply contracts. Great news and I really hope this bidder will succeed in giving Delta Energy a second life and its employees and partners continuity of business.
Have a question? Want to work with me?
Contact me on the live webchat on the lower righthand corner of this window or by email!
Or, browse the digital products in my webshop here, for example the new Carbon Insider Newsletter, my rCB pricing guide or the popular industry reference report Prospects for recovered Carbon Black !
Thank you for reading!
Happy holidays & best wishes from Berlin,
Martin