FINANCIAL VIABILITY OF CIRCULAR BUSINESS MODELS IN TYRE RECYCLING INDUSTRY IN LATVIA

Inga Uvarova, Dzintra Atstāja, Viola Korpa, Miks Erdmanis

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

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Abstract

The end-of-life (EOL) tyre recycling industry in Latvia is encountering economic and sustainability
challenges, which require solutions by various stakeholders. Improvement of tyre waste management and
recycling is important within the context of sustainability and the new streamlining of circular business models.
Its importance is also recognized at the European Union level in relation to the further strategic goals and the
European Green Deal. In addition, the tyre recycling industry in Latvia demonstrates a relatively unfavourable
financial situation, which is one of the most significant factors hindering the introduction of new circular business
models. The aim of this research is to clarify the challenges related to the financial viability of tyre recycling
companies adopting the new circular business models. The main research methods are literature review, semistructured in-depth interviews, case studies and financial analyses. There are large stocks of EOL tyres and on
average just 50 % of them are recycled. The tyre waste management companies are not motivated to supply
EOL tyres to recycling companies. On the other hand, due to various reasons, most of the tyre recycling companies
are not working with their maximum production capacity. The research results reveal that the tyre recycling
companies mostly run traditional and inefficient business models that require large operating costs and ensure
comparatively low profitability. In order to enable more efficient and environmentally friendly tyre recycling
process, the companies should implement new, investment intensive technologies. Yet, they face critical issues
of liquidity and financial returns. Major conclusions are related to the necessity to develop several business models
interlinked within one portfolio thus ensuring the manufacturing of various products with higher added value and
quality. This may maximise the profits and improve the financial viability of tyre recycling business models
Original languageEnglish
Title of host publication21st International Scientific Conference "Economic Science for Rural Development" : 12-15 May 2020, Jelgava, Latvia
Subtitle of host publicationproceedings
Place of PublicationJelgava
Pages237-245
ISBN (Electronic) 978-9984-48-345-0
DOIs
Publication statusPublished - 2020
Externally publishedYes
Event21st International Conference "Economic Science for Rural Development" - Jelgava, Latvia
Duration: 12 May 202015 May 2020
Conference number: 21
https://www.esaf.llu.lv/sites/esaf/files/files/lapas/Krajums_Nr_53_24.08.2020.pdf
https://www.esaf.llu.lv/sites/esaf/files/files/lapas/Krajums_Nr_54_24.08.2020.pdf

Publication series

NameEconomic Science for Rural Development
Volume54
ISSN (Print)2255-9930

Conference

Conference21st International Conference "Economic Science for Rural Development"
Country/TerritoryLatvia
CityJelgava
Period12/05/2015/05/20
Internet address

Keywords*

  • circular business models
  • entrepreneurship
  • financial viability
  • tyre recycling

Field of Science*

  • 5.2 Economy and Business

Publication Type*

  • 3.2. Articles or chapters in other proceedings other than those included in 3.1., with an ISBN or ISSN code

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