Turning Old Tires Into Cash

Lehigh Technologies, which recycles tire scraps, brings in a new CEO to crank up production.

BURLINGAME, Calif.--Taking garbage and turning it into something useful is certainly an appealing concept as the whole world becomes more conservation minded.

Lehigh Technologies sees opportunity in millions of old tires. The 5-year-old company, which is based in Naples, Fla., and has a factory outside Atlanta, has a proprietary technology that freezes and grinds tire scraps into fine powders. Right now, the main customers for Lehigh's product are tire companies (who wish to remain unnamed), which use the powder to replace some of the virgin rubber in new tires. But Lehigh's factory, capable of producing 100 million pounds per year of the powder, isn't yet operating at capacity.

To boost growth, Lehigh is announcing Wednesday that it is bringing in Alan Barton, a chemicals industry veteran, as its new chief executive. Barton, who earned a doctorate in chemistry at Harvard and worked for 23 years at Rohm and Haas (nyse: ROH - news - people ), says there is great potential for Lehigh's rubber powders to be used in both the plastics and the coatings markets. One big attraction: The powder is priced at a discount to the cost of virgin materials.

"Producing powder particles in the size and quality that can be used in highly technical end uses is not an easy thing to do," Barton says. "Few, if any, other companies in the world can do this."

John Doerr, the esteemed green tech guru at Lehigh investor Kleiner Perkins Caufield & Byers, said in an e-mail: "We're in 30 million tires on the road today and see vast potential in expanding in the tire market to help with cost pressures, and in specialty plastics and coatings where we can provide cost benefits and better capabilities and qualities for materials." Kleiner invested in Lehigh alongside Index Ventures in a $34.5 million round last May. So far, Lehigh has raised a total of $60 million. The company didn't disclose sales figures but said revenues have doubled since last summer.

The company buys tire scraps that are one-quarter to one-inch chips and freezes them using liquid nitrogen, then puts them through special milling machines that can operate at extremely low temperatures to produce the right size powder particles. The process was invented by a German engineer for use in pharmaceutical production.

Lehigh is treading a familiar path--one that hasn't always ended happily. Back in the 1990s, Michelin (other-otc: MGDDF.PK - news - people ) began making tires with partially recycled content for use on Ford (nyse: F - news - people ) trucks. But Michelin couldn't obtain a consistent supply of recycled material, so Ford stopped buying the tires, says Andy Acho, a former Ford executive who oversaw use of recycled materials.