Is there a rationale for investing in cryogenic tanks or other capital equipment when funds for wages are tight? Yes, absolutely. The key word in here is “investing” which, in a classical sense, means to put money into something expecting at some point to extract more out than went in. There is also investment leverage where the money put into one thing reaps added savings for another.
As for direct investment- one of the most common in cryogenics is the purchase of tanks which are rented to end users or distributors for storing liquid oxygen, nitrogen or argon molecules. Ideally, the rent is calculated at a rate that produces income above the cost of money for the acquisition. At some point, rental income pays for the cryogenic tank while rental fees continue. A most interesting aspect of cryogenic tanks is that they usually enjoy a long service life with minimal upkeep. And, there has been the potential for a 20 year old vessel to sell for more than its original purchase price due to increases in raw material and labor.
Leveraging provides the icing on the cake for investors. In many cases, the availability of vessels for rent has been the difference in getting or losing business. Often, the cryogenic tank, liquid cylinder, vaporizer or other equipment is just the tip of the iceberg where the most significant returns are tied to sales of gases and supplies.
The distributor, dealer or contractor who shows up with equipment ideally suited to an application often has an advantage equal to having a gun at a knife fight. The “right” equipment can make all the difference in the profitability of a project by greatly reducing direct labor, cycle times and other wastes. Examples range from faster cutting results achieved with enhanced vaporization to reducing set up and reconnect times by equipping welders or cutters with liquid sources that will see them through a full day of work. And, for contractors, the ability to get in and get the job done expeditiously means both the opportunity to jump onto another job more quickly and greater favor with a now happy client. It can also mean completion of a project with 12 people where 15 were projected.
As for direct investment- one of the most common in cryogenics is the purchase of tanks which are rented to end users or distributors for storing liquid oxygen, nitrogen or argon molecules. Ideally, the rent is calculated at a rate that produces income above the cost of money for the acquisition. At some point, rental income pays for the cryogenic tank while rental fees continue. A most interesting aspect of cryogenic tanks is that they usually enjoy a long service life with minimal upkeep. And, there has been the potential for a 20 year old vessel to sell for more than its original purchase price due to increases in raw material and labor.
Leveraging provides the icing on the cake for investors. In many cases, the availability of vessels for rent has been the difference in getting or losing business. Often, the cryogenic tank, liquid cylinder, vaporizer or other equipment is just the tip of the iceberg where the most significant returns are tied to sales of gases and supplies.
The distributor, dealer or contractor who shows up with equipment ideally suited to an application often has an advantage equal to having a gun at a knife fight. The “right” equipment can make all the difference in the profitability of a project by greatly reducing direct labor, cycle times and other wastes. Examples range from faster cutting results achieved with enhanced vaporization to reducing set up and reconnect times by equipping welders or cutters with liquid sources that will see them through a full day of work. And, for contractors, the ability to get in and get the job done expeditiously means both the opportunity to jump onto another job more quickly and greater favor with a now happy client. It can also mean completion of a project with 12 people where 15 were projected.
Posts
