If you’re in the food and beverage industry, you’ll know better than anyone just how critical timing can be. Freshness is everything. And so when harvest time comes around, it’s all hands on deck and – quite literally – full steam ahead! But what about the rest of the year when the steam generators, boilers, feed and blowdown tanks, etc. you use for sterilization and/or blanching are just sitting around quietly depreciating? Chances are, when your usage is seasonal, you’re better off renting than owning.
Calculating the tipping point to rent or own
Cost vs. Rate of utilization
Every setup is different and every operation has its own specific constraints. In our experience, if you’re only using your equipment 40% to 50% of the time, renting will often have clear financial benefits over owning. But even in those cut-off cases when the monthly rental may work out slightly more expensive, the additional flexibility, efficiency, agility and control you get with renting are often well worth the difference.
Beyond the financials
Naturally, everyone is looking to lower their operational costs and optimize their capital expenditure. But operational costs are just the tip of the iceberg. When you consider the very tangible and quantifiable value of flexibility, cash flow, speed, and efficiency, you end up with a very different picture:
5 key drivers
Flexibility: harvests are not just seasonal but also prone to annual fluctuation. Thanks to the flexibility of renting, you can precisely dimension your utilities to take those fluctuations into account. For greater efficiency and control.
Speed: rental solutions offer rapid response times not just in setting up but also shutting down. Ensuring a solution fully tailored to the specific needs of the moment. Rental contracts are also typically faster to validate internally, compared with purchasing decisions that require capital expenditure. For even bigger time savings!
Cash flow: while it’s impossible to spread the harvest workload out over an extended period, renting your equipment does let you spread out the cost. Freeing up more of your working capital.
Not sure if renting is the way to go?
Let’s take a look together! Whether you are experiencing demand fluctuations due to seasonal harvesting or due to another cause, this example shows the importance of optimizing the agility of your business. We can go over the specifics of your operation and quantify the impact of various scenarios . So you can base your decision on the most complete picture.
Our prospect, an industrial-scale brewery, had a big decision to make. Option 1: wait 3 years for upgrades to the local electricity grid so its newly completed glass plant could commence operations. Option 2: buy the four 1MW generators it needed to get the plant online ASAP. Option 3: rent the power generators instead. Option 1 simply wasn’t an option at all! And an initial feasibility study favoured buying over renting. But while that study took all kinds of factors into account from the capital expenditure and service contract to overhead, depreciation and administration costs, it was based on one blatant assumption: a rate of utilization of 100%. The reality, however, turned out to be a very different story!
Major back-up compressed air solution secures continuity for Singapore refinery. The ethylene cracker complex located on Singapore’s Bukom Island is not only an important part of our customer’s operations but also a critical link in the entire petrochemicals cluster. Which is why guaranteeing uptime during a major turnaround of their plant and instrument air systems was absolutely essential. Our fully customized and integrated solution demonstrated once again that no project is too large or too complex for Atlas Copco Rental!
Protecting airport fuel lines from corrosion and contamination. Even the slightest contamination of an aircraft’s fuel system can spell mid-air disaster. So it’s not hard to see why quality and reliability were so important for our customer’s fuel pipeline maintenance project at one of the largest airports in the Philippines. Having passed the initial test with “flying colors”, Atlas Copco Rental was asked to support the comprehensive maintenance of the airport’s entire fuel pipeline system over the course of 12 months. A project where performance but also flexibility was key.
At Atlas Copco, we have been turning industrial ideas into business-critical benefits since 1873. By listening to our customers and knowing their needs, we deliver value and innovate with the future in mind.
Great ideas reinforce sustainable development. At Atlas Copco Specialty Rental, we team up with our customers to set up state-of-the-art temporary air, flow, steam and nitrogen solutions. Our passionate experts have extensive application and equipment knowledge. We understand our customers' needs and can provide a total solution for any industry, no matter if it is for emergencies or planned projects. We are a division of the Power Technique business area, headquartered in Boom, Belgium and offer specialty rental solutions under several brands around the globe.