Choosing Used vs. New Process Equipment, Part 1
What, if any, is the real benefit of buying used equipment for your project? Many people believe that they can save money by buying used equipment for their capital projects, and depending on the age and condition of the equipment they can save between 50% and 75% of the original cost.
However, sometimes used equipment can cost the same or even more than new after repairs, modifications, etc. are made to have the equipment function properly. And there are often a lot of hidden costs.
The following table contains real information from a project in which used equipment was bought to save money on a project.
|
|
USED 1,000 gal.
Tank w/ Mixer 316L SS (30 to 50 psig) jacketed |
USED 2,000 gal.
Tank w/ Mixer 316L SS (30 to 50 psig) jacketed |
NEW 1,500 gallon
Tank w/ Mixer 304L SS (50 psig/FV) jacketed |
Comments
|
|
Base Cost
|
$ 8,500.00
|
$ 32,500.00
|
$ 52,379.00
|
|
|
Agitator
Repair/Mods |
$ 14,802.00
|
$ 9,515.00
|
|
Replace motor (XP), replace seal,
refurbish drive, replace housing on 1 (Both 15 HP) |
|
Vessel
Repair/Mods |
$ 13,080.00
|
$ 12,450.00
|
|
New nozzles to suit process, fix
previous repairs not ASME certified, recertify, modify supports for load cells/platform |
|
Other
|
$ 4,200.00
|
|
|
1,000 gal. jacket filled with debris
(bees nests and dirt). Cost to hire professional cleaning company. Does not include time spent by Site and Mechanical Contractors |
|
Totals
|
$ 40,582.00
|
$ 54,465.00
|
$ 52,379.00
|
|
As you can see, the 1,000 gallon vessel with mixer was purchased at a low cost of only $8,500 but the additional costs at the end of the project added up to over $32,000, for a total cost of approximately $40,000. More importantly, the used 2,000 gallon vessel with mixer, after repairs and modifications, actually cost more than the new 1,500 gallon vessel with mixer. The key when considering used equipment is to make sure you understand the extent of the repairs and modifications that will need to be made, as well as the possibility of other unforeseen, additional costs that could significantly impact your budget.
