Sask. company shuts down tire processing operation after contract goes to U.S. firm

In a province that touts it’s “open for business,” Saskatoon’s Shercom Industries Inc., has now closed its tire processing facility.

Shercom’s contract with the Tire Stewardship of Saskatchewan (TSS) ended on April 30. The company was negotiating to extend the contract in good faith, according to Shercom Industries president Shane Olson.

In the meantime, however, Olson said the TSS — which operates under a Ministry of Environment-approved product stewardship program and oversees tire recycling and processing in the province — was canvassing an American company.

Crumb Rubber Manufacturers (CRM) is a California-based company that has been promised 40 to 100 per cent of Saskatchewan tires and will be setting up shop in Moose Jaw.

Shercom will continue its manufacturing operations, but will have to do so by sourcing its crumb rubber from processors in Alberta. The company can no longer accept or process used Saskatchewan tires, which will instead be shipped out of the province.

Crumb created at the Shercom Industries tire processing facility. (Lara Fominoff/650 CKOM)

The company previously took those tires and tore them into pieces, called crumb, and turned that into ground rubber for playgrounds, roofing tiles and driveway rubber.

Olson said the decision is a dangerous one environmentally and a chasm away from the work Shercom was doing. About 45 per cent of tires in California still end up in a landfill — a figure Olson put at 15 million to 20 million tires — compared to Shercom preventing any and all tires from going to the landfill in Saskatchewan.

Over the past several decades, Olson said Shercom has become the largest tire collector in the open market “because we offer the most” — including loyalty points and a community program, through which Shercom has invested thousands of dollars into communities in the form of skating rinks and playgrounds.

“I can promise you that this American company won’t be donating $20,000 to the Pense Area,” Olson said. “People care about this and they care about recycling.”

The company also provides service like a zero-cost tire recycling program, through which consumers can submit their environmental levy invoices from disposing of their tires with a Shercom retailer back to Shercom.

Now, Saskatchewan money will be going to an American company that will be taking away the province’s raw materials.

“Our customers are the real recyclers,” Olson explained.

He said that while Shercom changes tires into shapes that people want and are willing to pay for, it’s their demand for that and use of the products that sees the material repurposed in a productive way.

Perhaps most significantly, Olson said staff have suffered because of the situation.

Last year, Shercom employed 137 employees. Two rounds of layoffs have reduced that number to 75.

“Nobody wants to see a Saskatchewan success story go under,” Olson said.

Marlin Stangeland, Shercom’s CEO, said the provincial government has been very clear that it does not want to “pick winners and losers in business.” However, he and Olson feel the province did just that in this case.

“In this case, it’s doing that through a government agency … and it’s picking an American company over a Saskatchewan-grown company,” Stangeland said.

“Going into the future, what Shercom has is what the industry wants: Value-added manufacturing,” added Olson, noting the company might relocate somewhere else in the future entirely.

“We provided an opportunity for Saskatchewan people … to actually recycle tires — and that opportunity is leaving.”

— With files from 650 CKOM’s Lara Fominoff 

— Editor’s Note: This story has been updated to correct a figure on California’s tire recycling rates.