MDOR.OB Green Company & Saving the planet, one tire at a time?
July 2, 2008 - Exclusive
By Carli Ghelfi, Cleantech Group
Rubber recycler Magnum D'Or Resources gets nice stock bounce on $131M in contracts. Now it needs to start producing.
Fort Lauderdale, Fla.-based Magnum D’Or Resources (OTCBB: MDOR) today announced a contract extension with National Sales and Supply (NSS) for rubber shards made of recycled tires, sending shares of the pennystock company up 32 percent today, to close at 33 cents.
The five year, $40 million contract is an extension of previous $12.5 million deal with NSS, Magnum founder and chairman Chad Curtis told Cleantech Group.
According to Curtis, NSS recently signed a contract with Wal-Mart to distribute rubber nuggets to all its U.S. stores.
“Magnum is looking to be NSS’s key, if not largest distributor [of rubber nuggets],” said Curtis.
Rubber nuggets and rubber buffings, made from recycled tires, are the “green” answer to mulch, the wooded material most commonly found in playgrounds and landscaping.
Two months ago, Curtis said the company signed a separate $91 million mulch contract for rubber buffings with NSS, one of the largest suppliers of mulch in North America.
Yet, interestingly, with $131 million in contracts, the company isn’t exactly producing the nuggets nor the buffings—not yet, anyway.
Earlier this year Magnum received approval for its $19 million production facility in Magog, Canada, and is currently shipping equipment from its German partner, ARTech Recycling Technick.
Michel Boux, general manager and senior engineer with Magnum explained the company expects to begin producing buffings in its Canadian Crumb Rubber Plant within the next month and a half, with nuggets in production within the next three months.
According to Curtis, the Magog-based plant will be its first of many plants the company will have in North America, and noted the next plant location would likely be in Florida.
As the company’s main adviser, Curtis noted that the rubber mulch market was just the beginning for the company that has experienced several transitions since its inception in 1999.
“Magnum will rapidly expand and be the largest [mulch] supplier in North America,” boasted Curtis. “We’ll also be moving into powders.”
According to Curtis, the company plans to make “high quality rubber powder and thermoplastics elastomers (TPE).”
With powders, the company will be able to do thermal plastic replacements, ultimately reducing the cost for plastic by up to 40 percent, explained Boux.
“We’ll be able to mold and produce specific types of products such as replacement parts for your car or laptop,” continued Boux.
“We will grow, but what’s going to make Magnum in the market in the near term are nuggets and buffings,” added Curtis.
According to the two men, there are currently no other public companies producing nuggets, buffings and powders.
Companies like Lakin Tire and PermaLife recycle tires, and the latter offers colored rubber mulch, but apparently not in the quantity that Magnum promises.
In terms of powder, Naples, Fla.-based Lehigh Technologies said it’s currently recycling rubber into powder, and has a recent venture round of $18 million to prove it (see Rubber, water and waste get investor interest).
“Our distinction is after the powder is made,” said Curtis. “It’s what we do with the powders. Nobody will be able to do what we’re doing.”
“We make rubber, but we can make things from injection molding.”
Curtis said he sees Magnum eventually spinning out some of its nugget and buffing business to focus on producing powder.
“We’ll be a key player,” boasted Curtis.
In terms of dollar amount, Curtis and Boux said powder costs $1000-2000 per ton, buffings cost $380-700 per ton and nuggets cost $200-400 per ton.
“Our plant will be able to produce roughly 15,000 tons of powder,” emphasized Curtis.
“Come this time next year, we’ll be producing powders.”
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* Lehigh Technologies|
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* Michel Boux|
* PermaLife|
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