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
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 language | English |
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Title of host publication | 21st International Scientific Conference "Economic Science for Rural Development" : 12-15 May 2020, Jelgava, Latvia |
Subtitle of host publication | proceedings |
Place of Publication | Jelgava |
Pages | 237-245 |
ISBN (Electronic) | 978-9984-48-345-0 |
DOIs | |
Publication status | Published - 2020 |
Externally published | Yes |
Event | 21st International Conference "Economic Science for Rural Development" - Jelgava, Latvia Duration: 12 May 2020 → 15 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
Name | Economic Science for Rural Development |
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Volume | 54 |
ISSN (Print) | 2255-9930 |
Conference
Conference | 21st International Conference "Economic Science for Rural Development" |
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Country/Territory | Latvia |
City | Jelgava |
Period | 12/05/20 → 15/05/20 |
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