From the HQ - Newsletter:
April 17, 2001
Dear Shareholders,
Good news and progress continues to develop since my last newsletter,
including the US $ 5,000,000 financing (see press release March 5, 2001) and
last Thursday’s announcement regarding our joint venture with Xerus (see
press release April 12, 2001).
The financing enabled us to get the equipment we need to become commercial
and enter into a joint venture with Xerus, Inc. of Montreal to produce crumb
rubber products using our crumb rubber, Rutextm, starting in May. Needless
to say this is the beginning of what we all have been anxiously
anticipating…a commercial facility that will generate revenue, produce our
unique crumb rubber and its products and showcase our technology.
Xerus was formed to exploit the fast growing industry of plastic and rubber
recycling with the formulation of plastic and rubber composites that will
impact both the plastic and rubber industries with higher value-added
products. Tirex’ collaboration included the co-founders of Xerus, Michel
DeBlois of Technologies (www.mdtechnologie.com), who has a long history of
successful business ventures in this field and has been recognized for his
scientific achievements specializing in industry applied R&D with awards
such as the J. Armand Bombardier ACFAS award in 1966, and André Valois, a
plastics consultant whose expertise has been designing, developing and
marketing innovative plastics and rubber products. Xerus has contractual
obligations to manufacture and sell rubber tiles and rubber mud flaps
beginning in May 2001.
As previously discussed in our newsletters we have been in negotiation with
ETR (European Transformation Resources) to establish our Strategic Market
Development Agreement (SMDA) relationship with our representatives. As a
result, it was decided to name the SMDA Tirex Europe which is incorporated
in Madrid, Spain. Tirex Europe, Simpro (our manufacturing partner in Turin,
Italy), and our European customer have identified facilities, including TCS
technology footprints, in numerous established TCS-1 and TCS-2 sites in
several European countries.
The SMDA with Tirex Europe goes into effect upon the signing of the first
European customer’s TCS purchase agreement. Our European customer is
preparing to initially order multiple TCS-1s and one TCS-2 with potential
for subsequent orders in a variety of European countries. Tirex, Simpro and
Tirex Europe are planning to bring this project to fruition as soon as the
financing is in place.
Representatives from Simpro including a cryogenic expert, mechanical
engineer, computer programmer, project coordinator and Mr. Gallo Rosso, the
chief executive in charge of the project, visited Tirex in March to evaluate
and exchange information on the existing technology and the improvements for
future TCS systems. The visit was a resounding success (see April 3rd
letter to me on our web site) as both teams contributed to preparing for
manufacturing and delivery to our customers. Simpro informed Tirex
management that they plan to build their own TCS-1 in a location outside
Rome and use it as a European showcase.
We were also visited in March by representatives from Puerto Rico with whom
we have communicated with over the years and welcomed their visit which came
about as a result of the change in government in Puerto Rico. The new
government abandoned the old methods of tire disposal and the
representatives signed a Letter of Intent with Tirex to set up a TCS-2
facility and joint venture on a crumb rubber product manufacturing facility
in Puerto Rico. We expect their technicians to return soon to move this
integrated project along.
The Well Express project continues to move forward and it is reported that
their strategic partner in China plans to visit Montreal in May or June.
Planning for such a visit must be scheduled at least one month ahead and
final technical specifications must be determined first. Technical
exchanges are ongoing as the customer continues to learn what their needs
will be and we respond with the correct technology.
Needless to say, shareholders, every customer and every markets needs are
different and suiting the technology varies accordingly. The variety in the
unique specifications for each customer demands extensive development.
Further, Tirex is keenly aware of developing the advantages of the TCS
technology with respect to environmental and ecological permits and
considerations.
As we move forward into production and expanding our business, we have hired
two additional professionals. Mr. Yves Poitras as TCS Plant Manager and Mr.
James T. Conway as our Asian representative.
Mr. Poitras is an expert in the fields of synthetic fiber extrusion, plastic
injection molding and plastic extrusion. He has been in his own business
since 1982 specializing in setting up complete turnkey plastic extrusion and
molding plants. When Lou Muro, the inventor of the Tirex technology, came
to Canada, he worked solely with Mr. Poitras on the development of the
patented cryogenic tire fracturing technology. Mr. Poitras also installed
our air plant in Montreal. Mr. Poitras’ experience is invaluable in helping
Tirex advance into the field of rubber and plastic compounding. Mr. Poitras
graduated from the Textile Institute of Quebec (L’Institut des Textiles du
Quebec) in 1972.
Mr. James T. Conway has been contracted by Tirex as its Asian Representative
to explore manufacturing and sales opportunities. Since 1982 Mr. Conway has
worked as a Consultant in international trading (marketing and metallurgy).
1997 and ’98 were spent in Kuala Lumpur setting up operations for a small
Australian trading company based in Sydney selling to the foundry,
construction and refractory industries. Prior to 1982, Mr. Conway was
Director and Chief Executive of Elders Overseas Trading (Aust) Pty Ltd.,
responsible for offices in Melbourne, Hong Kong, Taipei, Seoul, Los Angeles
and Brussels trading mainly in bulk raw materials. Mr. Conway has travelled
widely in Australia, South East Asia, Far East, US, South America and Europe
and holds a combined diploma of Inorganic Chemistry and Secondary Metallurgy
from the Royal Melbourne Institute of Technology.
My response to your frequently asked questions are as follows:
? Shareholders’ meeting, Directors & Officers
Tirex management is considering a shareholders’ meeting and, if deemed
advisable, will hold one before year-end and we will advise the shareholders
by July. As Tirex becomes more established we will welcome a new member on
the Board of Directors. Furthermore, the Directors and management are fully
aware and prepared to bring in top management that will also develop and
establish the foundation necessary to achieve the next level.
? Ocean Equipment Manufacturing and Sales Co.
OEMSC has a license agreement with Tirex to manufacture and sell the TCS
technology in the United States. President, Louis Sanzaro, is a major
shareholder and has invested substantially in the development of the TCS
technology.
OEMSC has begun their first phase of tire recycling with the purchase of a
primary shredder and some ancillary equipment to size scrap tires for sale
in civil engineering applications and in anticipation of the incorporation
of the TCS-1 into their process.
OEMSC has taken advantage of a New Jersey statewide grant to recycle scrap
tires and has been awarded municipal and county contracts for the disposal
of their tires. These contracts go a long way for OEMSC to establish a
strong customer base providing them with the 4-5 thousand tires per day that
is required to run a successful recycling operation.
Mr. Sanzaro recently visited Tirex to continue his coordination with our
technical staff for the progress of the technology and especially for the
modifications to improve the efficiency and reduction of manufacturing
cost. The pace of continued improvements to the TCS-1 technology over the
past year has caused Mr. Sanzaro to delay production of the first TCS-1 in
New Jersey to ensure that the first TCS-1 built in the US will be
representative of the subsequent units to be built. Mr. Sanzaro has
scheduled customers to visit the Tirex plant in May.
? Public Relations Firm
As stated in our February 7, 2001 newsletter, we have considered a
professional PR firm to handle our investor and public relations once we
have the affordable cash flow and the increased consistent business
activities news worthy of a PR firm.
? Recycletron
Is still a viable TCS customer that will come back ‘to the table’ in May as
the TCS operates continually producing crumb rubber. Recycletron has
represented interest in multiple systems for Canada.
? Crioengineering of Italy
We’ve been informed that the Crioengineering project is ‘tabled’ and Tirex
management has regretfully resigned the possibility of doing business with
them. We have, however, continued with Italian representatives to implement
our TCS technology in Italy and the prospects look promising. Needless to
say, Simpro’s showcase of the TCS technology outside Rome and their
influence will further our prospects.
? Government Programs
Tirex is a company driven by technology and research and development. We
continue to work on many fronts to develop saleable technologies, be they in
the form of new production or processing techniques or in the form of new
uses for recycled materials, such as the creation of new compounds using
rubber crumb or powder for use in the thermoplastics extrusion and injection
industries. This research and development activity, which will shape the
future of our company, is strongly supported by the governments of Canada
and of Quebec, with whom we have a well-established relationship. For
years, these governments have recognized the role of private sector research
and development as a critical engine of economic growth. Tirex will
continue work in partnership with all levels of government and their
respective research and development agencies to bring new technologies to
the forefront and available for commercial distribution.
As stated on October 24th, as we evolve into a fully commercial operation,
not only will our company receive down payments concurrent with the receipt
of purchase orders, several government assistance programs, both
Canadian-based and foreign sources, will become available to the company
directly or to its clients which will facilitate the conclusion of purchase
and sales agreements, technology exchange programs, subsidies for
installation of facilities for environmental protection and remediation, and
developing country industrial assistance programs, just to name a few. Of
particular interest to Tirex directly are the programs offered by the
Canadian Commercial Corporation and Canada’s Export Development Corporation
which both facilitate the conclusion of international contracts and
guarantee payment back to the company for products and services provided.
These guarantees also greatly enhance the level of comfort of financial
institutions in providing short-term financing to the company to support
contracts in progress.
? Insider Selling
As stated in the January 18th shareholder newsletter, we wish to make clear
to all of our shareholders, and to dispel all rumours and innuendo
respecting the intentions of management with respect to Tirex, that while
certain former insiders have reduced their investment positions in Tirex,
the current management has not done so and will not do so in any significant
way in the future without giving equal value to the Company. The cost of
operating the Company has been heavily supported by current management over
the last year, reflecting in very concrete terms, our belief and commitment
to the success of this Company. Also, please remember, Tirex is fully
reporting with the SEC and all filings are available online through
www.freeedgar.com.
Additionally, not all shareholders holding restricted stock are ‘insiders’.
The definition of an insider is a Director and / or Officer of a company. A
Rule 144 filing also does not necessarily mean a sale. It is a filing,
mandatory by the SEC, of a proposed sale in which the shareholder, should he
/ she wish to, sell a portion or all of the shares within each quarter (a
ninety-day period). After that quarter ends, the shares remaining again
become restricted, necessitating the need, should he / she wish, to file
another Rule 144. Most shareholders of restricted stock will do this as a
matter of exercise, allowing themselves the opportunities shared by
shareholders of registered stock, the ability to take advantage of
unexpected movements in the market. Further, if you have, say, one
certificate of 500,000 shares and you may wish to sell 10,000 or 20,000
shares, you still need to file the 500,000 shares as that is what is on the
face of the certificate.
? New Potential Business
Further to the previously mentioned business with Well Express, Tirex
Europe, Recycletron and Puerto Rico, we have and will continue to entertain
representatives from all over the world. For example:
Allied International: Through our representatives in South America we have
developed potential customers in Chile, Argentina and, more urgently, in
Brazil. A recycling agency in Brazil has been formed with substantial
financial investors to recycle tires. Representatives visited Tirex last
August and recently visited Simpro in Italy to further the project. With
Simpro having manufacturing facilities in Brazil, the development of the
project has accelerated to a point where Simpro, Tirex and Allied are
prepared to meet to discuss the magnitude of the project.
Representatives of the Nantong Economic and Trade Development Area (NETDA)
of China will visit Tirex April 20th. The Canada – China Board of Trade and
Industry representative, Mr. James Ma, continues to showcase our technology
to Chinese representatives. The Canadian – China trade exchanges in
technology is developing very rapidly as more and more Chinese visit Canada
looking for new technologies such as ours.
We are becoming involved in a project in Russia through Tirex Europe where
our technology will be used to supply crumb rubber to a major asphalt
manufacturer for a national project to build roads.
Irish and English representatives that visited Tirex last November have
moved their project forward including Parliament consideration and are ready
to come back to the table to discuss financing and production scheduling.
Malaysian representatives including the Director of Environment for Kuala
Lumpur recently visited Tirex with Canadian commercial representatives from
the Canadian High Commission and an international advisor from the Minister
of Industry and Commerce.
Many other countries [Greece, Sweden, Egypt, South Africa, Mexico, Taiwan,
Korea, Ukraine (will visit Tirex this month) to name a few] and / or
companies have been and continue to communicate interest in our technology
including local recyclers and / or entrepreneurs. We will gladly keep you
appraised as they develop.
In addition to our patented fracturing mill, Tirex is applying for a world
process patent on the TCS system.
While we continue to progress and begin to generate revenue and TCS sales,
no one knows more than Tirex management how anxious we all are for our
position in the market to reflect our growing business. Market conditions
and bringing large capital equipment and new technology to a developing
industry in multiple countries has made it difficult at best. We still
believe, however, in our technology and the vertical strategic plan for
downstream production that will give us long-term growth and security.
Tirex well persevere and we hope you will continue to be a part of it.
John L. Threshie Jr.
President / CEO |
