1. TBAP Business Assistance Industry Trends TBAP Industry-Wide Projects CIWMB Tire-Derived Business Assistance Program ANNUAL REPORT

2. CIWMB Tire-Derived Product Business Assistance Program The TBAP Program  Goal: Strengthen Scrap Tire Recycling Infrastructure and Expand Market  Business Assistance  Industry-Wide Assistance Projects  The Team  Managed by Board Staff + Prime Contractor  DK Enterprises, Tinney Associates Key Partners  30 Additional Subcontractors  TBAP Contract #1 (R.W. Beck - Prime)  March 2006 – April 2009  29 Businesses Assisted  7 Industry-Wide Projects  TBAP Contract #2 (Manex - Prime)  August 2008 – May 2011  One Business Assistance Cycle – Tentative Due Date: April 16, 2009  7 Industry-Wide Projects

3. CIWMB Tire-Derived Product Business Assistance Program Location of the 29 TBAP “Grantees” Blue = 7 Processors Red = 22 TDP Firms

4. CIWMB Tire-Derived Product Business Assistance Program Range of Products Graphic Courtesy DK Enterprises

5. CIWMB Tire-Derived Product Business Assistance Program Individual Business Assessment Synopsis  Dynamic, Driven & Diversified Small Businesses  Classic Small Biz Challenges  Drive for Rapid Growth  Cash Flow Crunch  Opportunistic vs. Strategic Decisions  Developing Operational and Financial Systems  Added Twists  Green Marketing Orientation  Role of Government Programs & Policies  Wide Range of Assistance Needs (and Competing Priorities)

6. CIWMB Tire-Derived Product Business Assistance Program TBAP Business Assistance Delivery ($3.14 million, 29 Firms)

7. CIWMB Tire-Derived Product Business Assistance Program Case Study - Modular Rubber Drains

8. CIWMB Tire-Derived Product Business Assistance Program Modular Rubber Drains  Objective  Product Development and Spin-Off Venture  Assistance  Feedstock Sources and Partnerships  Product Testing  Specification Development and Govt Sales Assistance  Website and Marketing Materials  Results  Thriving and Growing Firm

9. CIWMB Tire-Derived Product Business Assistance Program Case Study - Rubber Trails & Surfaces

10. CIWMB Tire-Derived Product Business Assistance Program Rubber Trails & Surfaces  Objective  Expand CA Operations and Product Line & Increase Sales  Assistance  Feedstock and Partnership Strategies  Product Testing  Green Building Marketing Plan  Production Equipment  Results  In Progress; Thriving Company with Growing CA Presence

11. CIWMB Tire-Derived Product Business Assistance Program Case Study: Holz Rubber

12. CIWMB Tire-Derived Product Business Assistance Program Holz Rubber  Objective  Incorporate Recycled Rubber in Long-Standing Product Line  Assistance  Feedstock Sourcing  Production Efficiency  Market Analysis and Assistance  Results  Incorporation of Recycled Tire Rubber in Range of Products

13. CIWMB Tire-Derived Product Business Assistance Program Case Study: Closed Loop Networking Showcase for Walmart and Sam’s Club Buyers

14. CIWMB Tire-Derived Product Business Assistance Program Closed Loop Networking Showcase for Walmart and Sam’s Club Buyers  Objective  Provide Access to Big Box Retailer Sales Opportunities  TBAP Assistance Connection  11 CA TDP Firms Participated (7 TBAP Grantees)  Funding for 2 TBAP Firms Provided  DK Enterprises Developed and Organized (80 Exhibitors)  Results  Experience Showcasing Products to Worlds Largest Retailer  Contacts / Sales Leads with Buyers, Merchants, and Suppliers

15. CIWMB Tire-Derived Product Business Assistance Program Business Assistance Accomplishments  Tangible, Targeted Services Delivered  Partnerships Facilitated  Cohesive Team Approach  Continual Program Improvement  Strong Demand Expected for Next Assistance Cycle in April 2009

16. CIWMB Tire-Derived Product Business Assistance Program CA Scrap Tire Industry Overview

17. CIWMB Tire-Derived Product Business Assistance Program CA Scrap Tire Uses (2006) Total = 44.4 million PTE Source: CIWMB

18. CIWMB Tire-Derived Product Business Assistance Program Tire-Derived Product Trends  Reuse and Retread  Holding Steady  Ground/Crumb Rubber  Growth Since 2006, Holding Strong  RAC, Turf/Athletic Fields, Mulch/Bark Driving Demand  Very Active Sector  Civil Engineering  Landfill Applications Steady  State Supported Projects Growing

19. CIWMB Tire-Derived Product Business Assistance Program TDP Trends (Continued)  TDF  Increases likely since 2006, recent short-term slow down  Landfill and ADC  Sustained Use with Some Market-Driven Variability  Export  Exports to China surged since 2006, recent abrupt halt

20. CIWMB Tire-Derived Product Business Assistance Program Broad Market Trends  Dynamic, Changing Industry  Demand-Driven  Partnerships and Processor Capacity Adjustments  Items to Watch  Public Perception of Health Concerns  State and Local Government Budgets  National Expansion of 40+ Fine Grind (Not Yet in CA)  Increasing Focus on Mainstream Manufacturing Markets & Big Box Retail  Global Economic and Financial Impacts & Uncertainties  Scrap Tire Generation  Product Demand  Export Demand  Oil and Commodities Prices

21. CIWMB Tire-Derived Product Business Assistance Program Scrap Tire Recycling Barriers  Need for a Strong Supply Infrastructure  Business-Specific Barriers  Access to Quality Supplies at an Acceptable Price  Lack of 40+ Fine Grind Capacity in CA  Permitting/Storage Concerns

22. CIWMB Tire-Derived Product Business Assistance Program Barriers (Con’t.)  Need to Facilitate TDP Sales in Some Areas  Low Customer Awareness and Understanding of Product Advantages  Challenges Leveraging Government and Green Initiatives  Need to Expand and Diversify TDP Markets  Need for Market Information

23. CIWMB Tire-Derived Product Business Assistance Program TBAP Industry-Wide Projects  Co-Organized International Tire Conference (May 2008)  Facilitate TDP Sales  Address TDP Barriers and Myths (Literature Review Complete; Analysis Begins 2009)  Govt and Green Building Sales Training (Held May 2008 & TBA)  Quality Control Training (Held May 2008 & TBA)  Cooperative Marketing (Begins 2009)

24. CIWMB Tire-Derived Product Business Assistance Program TBAP Industry-Wide Projects (Con’t.)  Expand and Diversify TDP Markets  Feedstock Conversion – Target Mainstream CA Rubber and Plastics Manufacturers (Ends April ’09)  Construction Product Database Pilot Project (Ends April ’09)  Retailer and Manufacturer Supply Chain Outreach (Begins 2009)  Improve Market Inefficiencies (Begins Now)  Provide Up-to-Date Market Information  Supply-Demand Inventory (Nov 2008)  TDP Market Analysis (March 2009)  TDP Market Analysis Update/Program and Strategy Review (Oct 2010)

25. CIWMB Tire-Derived Product Business Assistance Program Questions? Ed Boisson RW Beck (415) 499-0919 eboisson@rwbeck.com www.rwbeck.com Denise Kennedy DK Enterprises (916) 480-0443 denise@dkenterprises.us www.dkenterprises.us