It’s safe to say that the tyre business isn’t exactly the friendliest to the environment. Almost 380 million tonnes of scrap tyres were generated in 2011 in the US alone, according to the latest figures from the Rubber Manufacturers Association. Not only do tyres take at least 50 years to decompose, they release toxic and carcinogenic gases when burnt.
Against this carbon-filled backdrop, G.S. Sareen is improbably driving the tyre business into the foreign territories of philanthropy, social responsibility and premium branding.
Indeed, since founding Singapore-based tyre maker Omni United in 2003, the Indian-born entrepreneur has made a habit of roiling an industry better known for grime than glamour.
Last November, 49-year-old Sareen unveiled his most ambitious project yet – a line of tyres co-branded with US outdoors-clothing label Timberland. Recycled rubber from old tyres would be used in the soles of the brand’s trademark footwear, which is currently made with less virgin rubber.
The result? Fewer tyres in landfills or burned as fuel. In one fell swoop, this venture rolls fashion, sustainability and financial returns all into one daring gambit. The businessman has not only cemented Omni’s green credentials, but also changed the whole dynamics of buying tyres.
“The tyre industry lacks sizzle. It’s a US$200-billion (S$265-billion) industry but most people don’t even know what brand of tyres they buy. When you buy shoes or buy a drink, you decide what to buy but, for tyres, consumers have no part in the buying decision,” says the president and chief executive, who has sunk in between $10 million and $15 million in this partnership so far.
Timberland Tires will be launched commercially in April in the US first, since it is also Omni’s biggest market at 65 per cent, before being expanded to other countries. Consumers will be incentivised with discounts and other benefits to bring their Omni tyres back to their retailers after exhausting the wheels’ useful lives of around three to four years. These will then be taken to a facility to be processed into rubber sheets, before being sent to Timberland to be repurposed for soles.
How this works
1 When consumers purchase new Timberland Tires to replace their worn-out ones, retailers will send the used tyres for recycling.
2 US-based Liberty Tire Recycling and its network of tyre collection and recycling firms sorts tyres.
3 Used tyres are reduced to granules (crumb rubber) at a North American tyre-recycling facility, which are then turned into sheet rubber before being shipped to Timberland outsole manufacturers.
4 This repurposed rubber will be incorporated into Timberland boots and shoes.
Retiring an old thinking
Omni started as a distributor for other brands in 2003, when Sareen and his wife moved to Singapore from India, and sold its wares under its flagship Radar brand, offering high quality at reasonable prices.
But three years ago, the industrialist started to rethink the business and its DNA. For him, the basis of the DNA was a very simple but outrageously ambitious mission: “To take back every tyre that I sell”.
Sareen, who was in Fortune magazine’s 2012 list of Asia’s 25 Hottest People in Business, says: “We are a young company without a long legacy. So we asked ourselves what we could do differently that could make an impact right away.
The landfills around the world are filled with used tyres. Instead of contributing to the mess, we wanted to help fix the mess.”
Early last year, he approached Timberland and began discussions. Timberland was initially sceptical about the plan. The brand had gone down the same route before and used recycled tyres for its shoes, but discontinued the process, as it could not get a consistent supply of tyres that met its standards. Currently, a majority of its shoe outsoles are made with rubber that is made from 42 per cent recycled post-industrial latex, reported news website Eco-Business.
But Timberland was eventually convinced that Omni’s commitment and philosophy regarding sustainability made it the right fit. There were still technical issues to work out. For one thing, the rubber that Omni would provide contained chemicals that Timberland didn’t want in its shoes, so the material had to be designed such that it could be stripped of these unwanted elements.
It soon became obvious that the commercial and social benefits of the arrangement far outweighed any initial misgivings. Sareen expects the Timberland business to rake in $200 million in its second year, adding to what is already a half-a-billion-dollar business.
Run the world
“It’s such a catchy concept – shoes that already have 50,000 miles (80,500km) on them. People associate recycled products with being inferior, but it does not mean we have to compromise on quality. I am convinced that this will change the way tyres are sold.
“We want to put the power of the buying decision back into the hands of the consumers. Why not do it by doing good as well? Why shouldn’t we create a system where we are responsible for the business we do?” says Sareen.
Timberland is only the first of several branding tie-ups Sareen is working on. His long-term vision is for Omni tyres to be the driving force behind a host of co-ventures with other lifestyle brands. To fuel this strategy, the company is already researching a host of alternative applications for recycled rubber aimed at encouraging more car owners to return their worn-out Omni tyres to be reprocessed.
“It is going to be very exciting for us with the co-branding,” says Sareen. He expects new tie-ups to be announced in a year’s time, although it is too early for him to reveal any further details.
However, he stresses that any new partnership has to be in line with his company’s philosophy. “We will only do it if it makes sense for us. We can’t make a U-turn from our DNA.”