This is only the surface as this is just the beginning with the rubber nuggets and buffers. When Magnum gets into producing powders, tpe, and elastomers the stock could be trading over 4 or 5 dollars. That market is unbelievably monstrous.
Magnum’s global market = home and garden & playgrounds
This market is a multi-billion $$$ industry. According to a recent Freedonia market study (appendix #4), rubber mulch (which includes buffings and nuggets) is among a good growing market. The baby boom generation, which is primed for the peak gardening years and residence in more affluent areas with larger yards, will hike demand going forward, especially for products used in landscaping and gardening applications. At the same time, because of a renewed emphasis on family, the population is electing to spend more time and energy in and around their homes, as well as the homes of family members and friends. So they buy more and more garden products.
PLAYGROUNDS
Ground rubber is recognized as the safest play surface on the market. At a depth of 6 inches ground rubber provides the most shock absorption in playgrounds available on the market today - twice as safe as those with tan-bark, sand, pebbles and most other surfaces. Rubber has the unique ability to reduce injuries due to falls from a critical height of over 12 feet! You can actually take an egg and drop it from a height of 12 feet and watch it bounce. While the upfront cost may be a little more than other surfaces, ground rubber only needs to be installed once. No annual upgrading or replacement is required so the cost over time is much less than the alternatives. Also, ground rubber only requires a maximum of 6 inches in depth, versus 12 inches for the wood mulch - so less material and preparation is required.
The target market Magnum targets the consumer products market especially the exterior landscaping market which includes homes, schools, daycare centres, townships, etc. The home and garden market is in expansion in North America Rubber mulch is a strong market and putting major competitive pressure on TDF (Tire Derived Fuel) because mulch has more than twice the market value of TDF. TDF are mostly used in cement kilns as an alternative source of energy. Five years ago, people said wouldn’t pay 15 times more for rubber mulch than for bark. Well, they are, and it’s still selling. Rubber mulch is now being sold at Wal-Mart and other worldwide chains, Lowe’s, etc. Note that garden rubber mulch isn’t suitable for playgrounds: It may contain small pieces of steel or nylon Playgrounds are 98-99 % free of metal and textile.
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