While Kilns Burn, a Recycler Smolders

In 1992, Mike Radovanov thought he was smart to move his company to Austin.

Texas had lots of used tires, he reasoned. And with two decades' worth of experience in manufacturing, Radovanov had the expertise and equipment to take advantage of them. He knew the TNRCC pays shredders 80 cents for each tire they shred, so he would not only have free raw material, he could even get people to pay him to take the materials he needed for his factory.

But now, nearly four years later, Radovanov, the owner and president of Rad-Tec, who moved his company here from Canada, is finding that the tire recycling business is harder than 100 miles of West Texas highway.

An engineer who trained in Belgrade, Yugoslavia, Radovanov has the presses, extruders, and injection-molding equipment needed to turn tire shreds into new products -- including soaker hoses, floor mats, bulletin boards, shoe soles, and other consumer products. But like hundreds of other small businesses, Radovanov is cash poor. "I have people who want me to make shoe soles for them," he says. "But the molds that I need cost $30,000." He adds that a mold to make trash cans on his huge injection molding machine cost $200,000. Radovanov figures he needs $500,000 to buy the molds he needs to have a successful operation.

He won't get much help from the state. The TNRCC has $6.6 million in grant money available to businesses that want to use TDF, but only $2 million is allocated for businesses like Rad-Tec that want to make finished products. But there's a problem with that $2 million: as of Tuesday of this week, Radovanov didn't even know the grant money existed until I told him about it.

Nor has he received much help from the City of Austin. He says the city held up an operating permit for his factory for two years. "I could have located in Manor or somewhere outside of town and been operating right away," he says. And Radovanov says the city agreed to provide a $400,000 loan to help him cover his relocation costs, but later reneged on the deal. In an August 1993, letter to Radovanov, Gregory Smith of the city's Department of Planning and Development said the loan, which was available under the neighborhood commercial management program (NCMP), was turned down because "tire recycling process is an unproven technology and is therefore considered a start-up business. Businesses less than two years old are not eligible for funding under the NCMP program."

Radovanov is still angry about the loan and he points out that Don Limon's restaurant, which recently went out of business, got half a million dollars from the city.

With proper molds, Radovanov believes Rad-Tec could generate revenues of $3-5 million per year. But he's been forced to bide his time and save as much money as he can. In the meantime, he and his son, John, keep Rad-Tec solvent by doing custom machine work and small injection molding orders for clients like General Motors and Ford Motor Company.

Radovanov, who has invested more than $2 mil-lion in special machining and fabricating equipment, hopes to launch his first commercial product this summer. The product: a roof tile nearly one quarter of an inch thick. Radovanov believes the product will find a lucrative market because it is more durable than conventional asphalt shingles. But to make the equipment at Rad-Tec really hum, he needs more capital. He's frustrated, but he won't quit. "It's killing me slowly," he says. "But I need to keep going in it because I'm so close." -- R.B.

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