West Cryogenics Manufactures New Cryogenic Equipment in the U.S.

Yes. West Cryogenics manufactures brand new GOrilla & Ultra Cryogenic Liquid Oxygen, Nitrogen and Argon Tanks and Dragon Vaporizers in their ASME Code plant in Willis, Texas. And- clients are welcome to come and watch the manufacturing work being done. You can see everything from welding nozzles on heads and then welding the heads to shells and performing ASME pressure tests to seeing how super-insulation wrapping is done and vessels are sealed and mass-spec tested to be sure they are leak free. Then you can see the heated and cool vacuum processing, sand blasting, painting, and piping…… not to mention also getting to see cleaning materials for oxygen service and performing tests and analyses.

When you really think about it this ranks with touring the Blue Bell Ice Cream and Dr. Pepper plants except that manufacturing brand new cryogenic vessels in the United States is a lot less common than ice cream or soda pop. I have to say this in a very qualified manner, though, because it is a bit of an understatement to refer to Blue Bell simply as “ice cream” or Dr. Pepper as “soda pop.” It is more likely that they, in fact, are the very real modern personification of “milk and honey.” And well, you know, GOrilla Tanks, Ultra Tanks, and Dragon Vaporizers are mighty fine, too. And- They are all manufactured new in the U.S.

A Case for Capital Equipment Investment

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.

Vacuum Rupture Disk- Blown A

Which cryogenic liquid cylinder in this photo still has a vacuum?

Actually, the only thing we can tell from this photo is that the bottom two do not have any vacuum since their vacuum rupture disks are both blown. The top liquid cylinder might or might not, but this can only be determined through testing.

Vacuum rupture disks are installed on cryogenic liquid cylinders and tanks to protect the outer vessel from rupturing. The inner vessel of a cryogenic tank or liquid cylinder is typically designed as a pressure vessel. Both resetting relief devices and one time rupture disks (head safeties) are usually installed to prevent the inner vessel from over-pressuring and exploding. The outer vessel is only a protective skin and carries no pressure rating. A leak from the inner vessel into the annulus causes pressure to build against the outer vessel. Vacuum rupture disks or vacuum lift plates are installed on outer vessels to allow them the vent almost immediately in the event pressure begins to form in the annulus.

The next things we’d like to know are what might be determined from “how” the disk blew and “who” might should bear the cost of repair.

Reducing Wakeup Costs for Medical Oxygen Delivery A

Yesterday we hit on the costs of “Waiting Time” waste for companies cued up to get medical oxygen delivery trucks filled and associated Process, Transportation and Talent wastes. The first method identified for reducing this cost is the use of larger vessels for liquid oxygen delivery. A number of companies who had been using 160liter liquid cylinders or “119” gallon delivery vessels moved up to 210, 290 or 500 gallon cryogenic tanks. The additional capacity has allowed them to visit many more patients between fills resulting in both increased revenue and cost savings.

The expense of getting to the first medical oxygen delivery each day is substantial and opportunity costs of inadequate supply can be high. It can be both frustrating and costly to get to a cluster of clients 30 minutes or an hour from home base and run out of liquid mid-afternoon. This commonly occurs when it is too late to go refill and return meaning that there was not only waste on the front of the day, but also on the end. For those who must return to meet critical patient needs it means an extra trip back and the likelihood of overtime costs.

A company moving to larger cryogenic tanks might find they can even reduce the number of trucks in service while still growing their client base. Some have been able to move from five 8-hour days to four 10-hour days. If it takes 1 hour to get out each day and you do this for 4 days a week instead of 5 then labor related “wakeup costs” are reduced right away. The return on investment is compounded greatly when cost savings are accompanied by elimination of missed opportunities at the end of the day.

An even higher level of performance is achieved by a few companies that not only fill individual liquid oxygen containers, but also deliver to other medical oxygen providers and fill their cryogenic tanks in the field. This results in a true win-win for both parties who are simultaneously increasing revenues and reducing costs.

One of the most interesting aspects of acquiring larger medical oxygen tanks and trucks is the availability of funds from third party investors. Savvy financial sources understand that a move to larger vessels can improve financial returns and several are receptive to funding value strengthening moves.

Medical Oxygen Wakeup Costs

A bulk medical oxygen provider told me recently about the lines of drivers they have many mornings waiting to get their truck-mounted vessels filled for that day’s delivery runs. Several others confirmed that it is such a trend that a lot of the homecare delivery drivers have purchased personal DVD players to watch movies while they wait in line.

One of the main costs Lean Methods focuses on is “Waiting Time” waste. This situation is amazing if you consider an average work year of about 200 delivery days and the cost not only of waiting, but also getting to the plant, filling and then actually getting out to respiratory oxygen patients. This adds Process, Transportation, and Talent wastes and instantly begs the question of how others might be avoiding or limiting these costs. There were some interesting answers that we’ll explore in greater depth in future posts. They include:

-Use larger cryogenic tanks in trucks to cut down the number of fills required annually;
-Install bulk tanks at depot facilities to avoid going to vendors;
-Acquire larger portable tanks to use for remote depot and field filling;
-Outsource filling services;

Please share other ideas if you have them and we’ll work more on this and a couple of related issues over the next few days.

Used Equipment Scarcity

Purchasing used or reconditioned equipment is one way of helping cash flow for startups and boosting the profits of established operations. Like any tactic, it is great if it works. During the past several years, though, it has gotten harder to find good used cryogenic tanks at any price. Here are just a few of the reasons:

- Rising steel prices and other costs have driven new equipment prices up considerably. This makes it easier for companies to justify rehabbing equipment and continuing to use it. Even if owners have no immediate needs they find it hard to sell off equipment when the cost of repurchasing a similar tank later is so high.

-Industry “Majors” regularly fed used equipment into the market until they realized that the equipment they were selling off was costing them business. Simply put- smaller independents were buying used cryogenic tanks and coming right back to take away clients by offering lower rental rates on cheaply purchased equipment. Many large companies now take the position that the opportunity cost of selling used tanks that end up in the hands of competitors far outweighs the sale price.

-Strong demand has made it easier to place liquid oxygen, nitrogen or argon equipment pulled from one site with another client in short order. In fact, suppliers have typically found that equipment moved to a new client generates higher rentals than at the old clients so upgrades are encouraged.

-Risk calculations also come into play for sellers who have to weigh short term savings against long-term exposure.

There are few clues on what will occur during 2009 related to used cryogenic equipment markets. For now there is nothing that indicates either an increase in availability or lowering of prices.

Dangers of an Improperly Decommissioned Liquid Cylinder

Disasters are rarely caused by a single action or event. More often than not they result from a series of small failures that culminate in a whopping show stopper. You might have already seen the attached presentation. If not- Hit the link below and take a moment to see just how wrong things can go when people “rig” equipment, disable safety devices and use it in ways not intended.

www.cdc.gov/eLCOSH/docs/d0500/d000585/d000585.ppt

Cryogenic News Introduction

Thank you for sharing a moment or more of your time to check out this blog. It is my wish that you will find some of the information shared to be helpful, interesting, enlightening or even occasionally inspiring.

Cryonews is focused on items of interest to cryogenic industry suppliers, users, and students taking into account the wide diversity of people and applications in the field. Liquid Oxygen, Argon, and Nitrogen have an incredible number of uses in areas from Medical Oxygen in Hospitals, Research and Homecare to Manufacturing, Construction, Welding Jobs, Demolition, Food and Beverage Production, Harvesting, Special Effects and more. In turn, new posts will intentionally traverse a pretty wide open course going wherever the light shines that moment. And there will be frequent posts with no seeming relevance delivered guilt-free.

This blog is intended as a source for industry news, tips, and insights. Questions, ideas, and links that might be considered worthy of note will be valuable and appreciated. Inevitably, we’ll find that others are wondering or interested in the same things. I'll endeavour to provide responses that are accurate and avoid “the sin of being booooring.”