Consider Total Lowest Cost of Ownership
Why should I pay more for your equipment?
Well, choosing a vendor for a capital equipment purchase can be a challenging assignment. One must consider the price, ongoing maintenance costs, end-product output quality and quantity, and lifespan of the equipment. All too often when discussing a capital purchase a customer tells me they have been offered a lower cost extrusion plant. When this happens, I remind the customer that they are not comparing apples to apples, and they must consider the total life of the plant.
We implement a Lowest Total Cost of Ownership (TLCO) tool that allows us to show our customers how much a piece of equipment will really cost in the production of Full-Fat soy. Here are a few considerations when calculating the TLCO of a soybean extruder:
- Purchase price
- Capacity of extruder
- Operational costs and margin per ton
- Quality of Full-Fat Soy (moisture level, digestibility)
- Cost of replacement wear parts per ton
- Downtime for replacing parts in hours.
- Estimated life of equipment
With this information, we can compare the Insta-Pro Soybean extruder against any competitor. What we see in almost every scenario is after the end of the first year, the Insta-Pro extruder costs less due to the competitor extruder having increased spare parts and maintenance costs and lost revenue due to the extruder not running. Furthermore, there is a potential loss due to quality. If your full fat soy has high moisture and high levels of urease activity, you will not fetch the market price. As an example, if you choose an inferior extruder and are required to sell your full fat soy for 2% under value, that comes out to be $46,200 dollars at the end of year one.
I challenge you to look at the whole picture, to look 10 years down the road and ask yourself if you are happy with your extruder purchase decision. In the situation where a customer chose an inferior extruder, we often hear from them 2-3 years later expressing their regret for attempting to save a few dollars.
Insta-Pro would love to help you make an informed decision regarding your extruder purchase. We can help you look at the numbers and compare based on the considerations above. Please reach out to your Insta-Pro sales representative for more information.
