Entyr partners with commodities giant Trafigura in landmark tyre recycling agreements

Go to Colin Hay author's page
By Colin Hay - 
Entyr ASX ETR Trafigura offtake deal industrials carbon management

Environmental technology specialist Entyr (ASX: ETR) has achieved a key strategic milestone with the signing of offtake and collaborative agreements with commodities industry giant Trafigura.

Entyr is a global leader in the development of solutions to deal with the global tyre waste problem.

Under the agreements, the two companies will work together on investigating markets for high-quality products produced from end-of-life tyres.

Trafigura, a Singapore-based global commodities trader, had global earnings of more than $10 billion in 2022 and has networks and offices all over the world.

“This collaboration with Trafigura is an important milestone for Entyr as it completes our strategic framework as a sustainable business recycling a key waste stream (tyres) that will generate profitability and expansion in the foreseeable future,” Entyr chair Mike Barry said.

Offtake agreement terms

Under the offtake agreement, Trafigura will receive 100% of Entyr’s products including tyre pyrolysis oil, carbon char and recovered carbon black production after an initial six-month ramp-up period.

Under the offtake term of 20 years, an initial floor price has been set broadly in line with prices currently achieved for the products and is subject to increases based on market reviews and the consumer price index.

Trafigura has also agreed to subscribe for a minimum of $2,500,000 in Entyr shares at terms to be mutually agreed upon within an initial 2-year period.

Collaboration forged

Entyr and Trafigura have agreed to work together to further develop the Australian company’s technology and plant infrastructure through feedback on product development, including identifying target markets and future expansion opportunities both in Australia and internationally.

The collaboration agreement has a 10-year term and grants Trafigura an option to invest up to 25% of the equity in any subsidiary special purpose vehicle incorporated by Entyr to hold any new plant(s) during this period.

Growth ambitions

Entyr chief executive officer David Wheeley said the strategic collaboration marks a significant milestone in his company’s quest for growth.

Trafigura is a leading global supplier with a reputation for connecting producers and consumers of vital commodities.

“Entyr’s sustainability-oriented products are highly sought after in international markets and this security of offtake provides a strong platform for our business to grow and deliver long-term value for our shareholders,” Mr Wheeley said.

He added that by leveraging Trafigura’s resources, Entyr would be able to shift its focus towards technology development and the execution of its project pipeline to enable sustainable growth.

Refund received

The agreements come just days after Entyr reported it had received $9.34 million in cash for its research and development (R&D) tax incentive for the 2022/2023 financial year.

This government-backed R&D incentive relates to Entyr’s eligible expenditure during the 2022/2023 financial year on the registered core and supporting activities associated with development of its project of “commercial thermal desorption application to rubber waste.”