Austin Rubber Aims to Make Old Industry Innovative Again

For a city like Austin, known for its tech innovations at the forefront of cognitive computing, enterprise software, and the like, the rubber industry seems decidedly old school.

“We see ourselves as a bridge from the way energy and materials-related industries do things now and the way we’d like it to look in the future,” says Greg Merrill, senior vice president of Greensource Holdings in Austin. “The word ‘green’ is in our name.”

Greensource was founded in 2007 by a group of chemical engineers and a couple of “business guys,” as Merrill puts it. One of those engineers had been fiddling around with various solvents and chemicals to try to come up with a cleanser to get paint, gum, and other hard stains off of furniture. The concoction, which was in a bottle with a rubber stopper, overflowed: the chemicals had broken down the rubber.

“We realized it was vaporizing, disintegrating the rubber,” Merrill says. Changing tack, the scientists began to explore how its chemical cocktail might be used for recycling rubber. More than three years ago, Greensource spun out the operation to create Austin Rubber.

What Austin Rubber has created is called APX, a secret sauce of chemicals that allows more recycled rubber to be used in manufacturing new products. Right now, rubber products such as tires are broken down into what’s called crumb rubber—which resembles coffee grounds in its raw state—but current technology can use only up to 2 percent of recycled compound in new products before falling apart, Merrill explains. In comparison, he says, at least 50 percent of the new product can be made from the crumb rubber broken down by APX.

“When you go to make the rubber components to make a tire, you mix the ingredients and bake under high pressure,” Merrill says. “There’s no process other than ours that can effectively unbake the cake [of the rubber product] and break it down so it can be reused.”

Austin Rubber has raised about $25 million from private family offices and friends. It has a pilot manufacturing plant in New Orleans and is building another facility in Pennsylvania. Merrill says their customers are shoemakers and tire makers that “you’ve heard of” but only mentioned one in particular: Bata, the India-based shoemaker which is one of the world’s largest.

“There have been so few innovations in the rubber industry; the current state-of-the-art in rubber is from the 1950s,” Merrill says. “Young students aren’t going to school to study polymer chemistry and rubber technology. We’re hoping to bring sexy back, if you will.”

I found out about Austin Rubber through a social media invitation for the launch party this week of the Austin Footwear Labs, which is selling flip-flops made from recycled rubber. Curious, I asked for details on how “innovative” these shoes were and found out about the backstory of APX and Greensource Holdings.

Merrill says they didn’t intend to get into the retail footwear business. When he would call on Austin Rubber clients, they wanted to see the types of products that rubber, broken down by APX, would look like. “These are product guys, not chemical or materials guys,” he says. “They wanted to see a final product.”

So, he designed the simplest shoe he could think of: a flip-flop. “The rubber outsoles are 50 percent recycled; these are old scrap tires that would have otherwise been burned or landfilled,” he says.

Down the line, Greensource hopes to innovate in other energy-related processes such as coal liquefaction. Still, they are leaving room for serendipity. “Like many inventions, APX was a total accident,” Merrill says.

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