The cost of the rubber mulch from Rymar reflects that fact that they do both processing and wholesaling. The elimination of a third party keeps costs lower for consumers. The main sources of cost in Canada is labour, raw material and fuel and equipment. The machines require operators to transport, grind, coat and package the product and materials. Raw material cost is reduced due to the fact they are recycling used tires for the mulch, keeping them out of dumps and landfills, as using new rubber would be much more expensive. There is a small demand for used tires, with some being used for retaining walls or as weights on livestock feed bunk-style silos or recycled into various rubber products. All of the equipment required runs on fuel, and requires maintenance, repairs and replacement due to wear and tear from working with a material that is designed to be durable and long lasting. All of these factors contribute to the main cost of production of the rubber mulch.
There is currently no patent in Canada on rubber mulch (Canadian Intellectual Property Office, 2016). Any company can start producing rubber mulch in Canada without penalty.
Market Opportunity Evaluation
There is a very large market opportunity for the export of rubber mulch to Nepal. Any farmer or gardener in Nepal could use this product in some way. Agriculture provides income for 70% of the population in Nepal (CIA, 2016), so there is a large market opportunity. Nepal has 42, 400 km2 of designated agricultural land, and 22, 200 km2 of that is arable land (CIA, 2016). This is a large amount of land that could be utilizing rubber mulch in various ways. The main target consumer would be farmers with fields and orchards. Secondary target consumers would be livestock producers. Another, separate target consumer could be in the infrastructure industry, as the use of rubber mulch on pathways and roadways could prevent these areas from becoming very muddy and difficult to travel on during the wet season, especially in the rural areas.
Any farm supply company in Nepal could import and distribute the rubber mulch. A possible company to do so is Nepal Drip Irrigation P.Ldt.. This Company is a large farm supply company already established in Nepal (Nepal Drip Irrigation P.Ldt., 2016), and could easily accommodate to selling rubber mulch at its locations. Another option would be for large commercial farms to import the product directly to reduce costs by eliminating the third-party retailer. The Organic Farm Nepal is a large research and production farm that grows a wide variety of crops and livestock (Agriculture In Nepal, n.d.) and has the potential need for use a whole unit of the mulch, or more. A third option would be for groups of farmers to combine together and import a unit of mulch and distribute it among themselves.