Rubber recycling plant coming to Stockton

Nov 11, 2016

By Joe Goldeen

STOCKTON — A national producer of crumb rubber made from recycled tires and used for rubberized asphalt and sports fields is in the process of converting its Stockton warehouse into a full-fledged manufacturing facility that eventually could employ 20 workers or more.

Newport Beach-based CRM Rubber credited a $286,000 sales tax exemption made possible by AB199, authored by Assemblywoman Susan Talamantes Eggman, D-Stockton, and signed by the governor in 2015, in part for its choice to expand its presence at the Port of Stockton.

“Assemblymember Eggman’s bill was extremely helpful in bringing our company to the Stockton area. We had been considering an additional tire recycling plant in Northern California for some time and the promise of a sales tax exemption in AB199 was important in that decision,” said Brian Wong, CRM Rubber’s chief financial officer.

Eggman said creating new jobs in the recycling industry “is the point of the whole bill. This has been and will continue to be one of my legislative focuses.”

She said CRM Rubber had been getting ready to go to Canada before the tax exemption was made possible.

“We feel like this program will be pumping $200 million into the local economy. Everybody who applies (for the exemption) must demonstrate that it will be a net gain for the state of California,” Eggman said. To date this year, more than $16 million in tax exemptions has been granted statewide. By the end of the year, that could rise to between $18 and $20 million.

Wong said CRM Rubber’s current Stockton warehouse at 1404 S. Fresno Ave. — site of the former Hormel Foods processing plant — is currently being used as a transit station with three employees. No manufacturing is going on there yet.

“But we are hoping to acquire some equipment and turn it into a full-functioning crumb rubber manufacturing facility. It’s a lengthy process. It’s not just about buying custom-made granulators coming from Denmark, but we have to upgrade the electricity, do some foundation work and there is a lot of technical work that has to be done,” Wong said.

The nature of his business — recycling old tires into crumb rubber that, in addition to being used in rubberized asphalt, sports fields and track infill, is also used in rubber-molded products and colorized rubber mulch for landscape and playground coverage — relies on high volumes with very low margins.

“We’re talking cents on the dollar in terms of our profit margin,” Wong said. “So any type of incentive is important. Every dollar counts. Every little bit of help we can get goes into our formula in developing this plant.”

He said the San Joaquin Partnership helped pave the way for expanding in Stockton, even as his company was getting offers from numerous redevelopment agencies from outside California.

The state has set 2020 as the year it reaches its goal of 75 percent recycling, composting or source reduction of solid waste to decrease its reliance on landfills.

“We are investing in the future. We believe California is going to be a major recycling capital,” Wong said.

Eggman, whose legislation expanded the existing California Alternative Energy and Advanced Transportation Financing Authority tax exemption to include purchases of equipment used to process recyclable materials for use in other products or make new products from recyclable materials, has been a strong advocate for green policies during her entire political career, including her stint on the Stockton City Council.

“I always thought of myself as a green council member and the benefits of greening things up as it pertains to new jobs. I was a member of the Green Team San Joaquin (of the Greater Stockton Chamber of Commerce) focusing on how do we grow business here and be green. AB199 was one of the ideas that came out of my idea working with the council and Green Team San Joaquin,” Eggman said.

“If we can do it for investing in our recycling economy and investing in manufacturing and jobs, it is a win-win,” she said.

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