FCS3

Section 3 Scenarios

complicate, slow or change the original plans. Every effort will be made to minimize such setbacks, if possible, and to keep CalRecycle up to date on the status of Activity Plans and any issues as they arise. 6. Gathering information for the final report. We will explicitly include in the Activity Plans the expectations for participating firms to sign the Activity Plan and document 1) their commitment to accept the assistance of technical and testing service providers in place of being paid money directly to produce a commercial product; 2) provide information on crumb rubber use; 3) provide ongoing status updates on the development of the product; and 4) furnish potential sales of commercial product. How Implement Activity Plan and TimeLine: As described above under #4, we view the key to Activity Plan implementation as sustained, tenacious and enthusiastic communication with all parties involved – including manufacturer staff, assistance team service/testing providers and CalRecycle Staff. We will strive to establish reasonable, achievable timeframes that are acceptable to CalRecycle. We expect that over the course of the approximately 18-month timeframe for technical assistance and testing activities, a reasonable goal in most cases will be to complete prototypes that meet performance and other requirements and define the final crumb rubber specification. This will allow the manufacturers to begin production towards the end of the FCS project period. Where possible, we will strive to establish faster schedules that achieve commercial production and ongoing crumb rubber use as soon as possible. It is an established fact that it takes an estimated 24 – 36 months on average to develop a commercial product before it goes to market and that timeline depends on the testing, technical and certifications that may be required for the product. DK Enterprises’ proposal assumes that manufacturers will be responsible for covering the cost of shipping samples/prototypes to testing labs. Also, DK Enterprises will not be responsible for the costs associated with re-testing products due to unsatisfactory test results. Describe Three Benefits to Assist Manufacturers in their decision to use crumb rubber: In our experience, there are three broad drivers or benefits related to crumb rubber feedstock conversion. All are intimately tied to perceived value by the licensed owner of the product and its customer, the designated manufacturer which may be the licensed owner and the interest of crumb rubber suppliers to meet the needs of the owner of the product’s customer. First, using crumb rubber may enhance certain performance attributes, including durability, softness, flexibility, acoustical properties, waterproofing and others. Second, using recycled materials in place of other raw materials may provide cost advantages based on the current cost of the other raw materials, leading to increased profitability. And third, using recycled feedstock may provide marketing advantages in certain situations where “green” or “sustainable” products are desired. Using recycled feedstock reduces waste and can reduce overall use of natural resources, energy and emissions, including greenhouse gas emissions. Finally, and closely associated with green marketing, using recycled tire rubber feedstock can be driven by decisions by the manufacturer or their customers to integrate sustainability into their business practices. Questions to Consider When Qualifying a FCS Manufacturer: • Does the manufacturer have a customer for the product? • Is the owner and management team of the company to the workers committed to investing in redesigning their current products to utilize crumb rubber for a portion of the virgin rubber?

P a g e 16 | 54