Friday 10 May 2013

Why buying and selling used equipment makes sense for surface finishing companies


Running a modern surface finishing plant requires a complex and diverse range of machinery, equipment and consumables, combined with human metal finishing expertise and experience. The products and processes are frequently changing, either due to new products and finishes being introduced or to comply with legislation. So there needs to be constant changes to plant configurations, process stages, control systems, transportation systems and ancillary equipment.

This means that metal finishing plant owners, managers and engineers face a multitude of tasks and challenges in order to implement the necessary changes. For instance, changing from an electrolytic plating process to electroless nickel requires modifications to pre-treatments, power supplies, chemical feeds, water treatment and extraction systems.

The introduction of new products to an established plant can often have implications due to product size; for instance, a manufacturer of bathroom and plumbing accessories introducing a new range of shower enclosures. This would increase the work envelope size and require a switch from decorative chrome plating to anodising or powder coating, entirely different processes with radically altered plant requirements.

Ancillary processes

A complete surface finishing or plating facility usually consists of a central, multi-stage wet treatment plant, with ancillary stages either inserted into the production line or operating as stand-alone processes. Products are invariably subjected to pre-treatments, such as ultrasonic cleaning, de-ionised rinsing and phosphating to prepare the surface for plating, anodising or powder coating.

In addition, there may be requirements for polishing, deburring, de-flashing, heat treatments, shot blasting, peening and the complex and diverse area of mass finishing. All of these processes have their own individual technologies and pieces of machinery, including manual and automatic variations. They also require different levels of expertise in terms of sourcing, commissioning and operating the equipment required.

Environmental considerations

No surface finishing plant arrives without a plethora of environmental and health & safety directives that companies are obliged to adhere to. These include the use of prohibited or restricted chemicals, wastewater disposal procedures, fume and dust controls, safety apparel and many more factors to take into consideration.

Asset realisation and procurement

When a company undertakes changes to surface finishing plant and machinery, either in a specialist electroplating plant or as part of a manufacturing facility, it is faced with a number of asset realisation and purchasing options.

Firstly, there are the options available for the safe disposal of the redundant machinery, taking into account the value to be recovered and the procedures to be undertaken.

With the globalisation of manufacturing and product finishing processes, it is quite possible that the potential buyer for the redundant equipment resides thousands of miles away on another continent. Specialist expertise is required to achieve the sale in terms of international marketing, finding and evaluating the prospective customer and completing all legal documentation.

With the speed of change in a modern, globalised industry, the adaptation of an existing plant can often be a quicker and more desirable option than commissioning a brand new plant from a process plant manufacturer. Environmental considerations are also in favour of the recycling and remanufacturing of used plant and machinery wherever possible.

De-commissioning and relocation

Next, there is the safe de-commissioning of the plant, the disposal of all hazardous substances and complying with national and international legislation. In the UK, this can include the surrender of the PPC licence to the Environment Agency. The plant then has to be moved and re-commissioned in its new location, with all the logistical hurdles to be negotiated. Once again, there is a duty to comply with local environmental and safety regulations.

New v used, the pros and cons

Companies face a number of choices when purchasing new or replacement surface finishing plant and machinery. The taboo surrounding used machinery is mainly something of the past, when there were few reliable and trustworthy suppliers of such products. Many of today’s industrial machinery merchants are world-class companies that are well-capitalised, employ knowledgeable staff and harness the power of the internet to achieve a global marketing reach.

You only need to see the thousands of serious buyers flocking to the USETEC exhibition in Germany every year to realise that the used machinery industry has moved on considerably from its rust-bucket reputation.

The used machinery dealers, auctioneers and strategic industrial asset management consultants of the 21st century employ sophisticated online marketing services in order to achieve their clients’ asset realisation objectives. Many are working on behalf of blue chip companies, for whom only bona fide suppliers with the appropriate credentials will suffice. It is essential to understand fully the client’s business plan and technical aspirations in order to put a successful marketing plan in place.

Our company, Riley Surface World, operates through three distinct sales and marketing channels for the benefit of both sellers and buyers.

Retail machinery

Firstly, there is the retail channel. We carry large, physical stocks of individual machines for which there is a regular market demand. These include cleaning systems, ovens, polishing & linishing, shot blast machines, dust extractors, chillers and much more. In most categories, the buyer has a choice of brand new products, nearly new machines that require minimal updating or older machines that can be made roadworthy with some refurbishment. In most cases, the level of budget available determines the choice of purchase. Older used machines will often be heavily discounted, and can be acquired ‘run & checked’ or refurbished if appropriate.

Direct from Site Clearance

There are also cases where it is not feasible to take equipment into stock. This often applies to complete electroplating or powder coating plants. It can also be appropriate for very large or specialised items of infrastructure that can best be marketed ‘in situ’. These events are known as Direct from Site Clearances, with a time limit on the sale depending on when a factory has to be vacated or converted to new production processes.

Riley Surface World works on a commission of the selling price in return for photographic, technical and marketing services. The company will also charge a fee if there is de-commissioning and dismantling work involved. There is no buyer’s premium charged for this kind of sales event.

Online Auction

Finally, there are online auctions. This channel applies both to complete plants and factory contents, as well as stock clearances of individual pieces of surface finishing machinery from the retail channel. The great advantage of online machinery auctions is that the bidding process tests the true commitment of buyers. It also serves to realise the true market value of the machines being sold at any one day or time in the used machinery calendar, adding credibility to the adage: ‘The market doesn’t lie’.

Online auctions are normally subject to a buyer’s premium, although this does not always apply to individual stock items being auctioned.

Conclusion

The surface finishing industry operates with a mixture of traditional and modern technologies. The principles of electroplating have not changed a great deal from their 19th century origins. However, modern plants incorporate a great deal of digital technology, robotics and new developments in chemistry, power supplies and fume abatement to name but a few. The constant evolution of this technology has created a marketplace within the industry for good quality plant & machinery that is surplus to requirements in one company, but is needed by another company. Often these requirements cross national boundaries.

Companies such as Riley Surface World, along with other specialist machinery merchants and auctioneers, exist in order to serve the needs of the industry and provide a point of contact for all companies that have plant to sell, or who are in the market to purchase new surface finishing machinery. We provide a vital service, not just to the surface finishing industry, but to the economy as a whole.