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.
This article appears in February 2 • 1996 and February 2 • 1996 (Cover).