As businesses evolve, new technologies are developed, market conditions change and the cost of energy continues to rise. The environment in which we work also changes to meet the needs of the Customer, the needs of the business, the needs of the staff and the needs of the stakeholders. Whether these changes are due to market conditions, safety, maintenance, new technological developments or financial conditions within the heavily industrialised environment (Petrochemical, Major Power Users, Utilities, Chemical, Distilling, etc.) this will often result in the mothballing and/or decommissioning of all or part of the plant and equipment used within the working environment
With this in mind it has never been more important to realise the potential value of the assets we have at our fingertips and this can be achieved through the re-sale of these assets.
Asset realisation is the process of taking a decommissioned or mothballed site, identifying a piece of plant or equipment and realising the residual value of the item by re-selling it rather than simply scrapping it..
In order to get to a stage where scrap can become a valuable asset there are a number of steps that need to be completed:-
- Step 1 – Identification & Verification– For each asset the ownership needs to be confirmed to ensure that it is suitable for sale. Consideration needs to be given to ensure the asset isn’t required for use in the future or across any other part of the site.
- Step 2 – Survey – The asset needs to be surveyed to check it’s condition, whether there is any contamination, what is required to remove and ship the item, etc…
- Step 3 – Estimation – An estimated sale price needs to be established and the costs to remediate items as detailed in the survey needs to be established to ensure there is enough residual value in the asset to cover the costs of the required works to sell and ship the item and still maintain a margin.
- Step 4 – Disconnection and Decontamination – Assuming all the above steps are successfully completed the next step is to fully disconnect the asset, empty any contents that may be held and then begin the process of decontamination. There are a number of processes of decontamination depending on whether this be internal or external and whether the contaminant is petrochemical, asbestos and other hazardous materials, chemicals, etc…. The correct experts need to be brought in to clean and clear the asset for ongoing use. The legalities of shipping items that may contain hazardous materials also needs to be investigated if it is not possible to remediate all contaminants.
- Step 5 – Marketing and Sale – With any item of this nature the asset is worth what a prospective buyer is willing to pay for it so the process of marketing and sale needs to be approached in the correct manner. The asset will generally be photographed and the full details recorded and then marketing material can be produced. Careful consideration at this stage needs to be given to the target markets, for example if you are decommissioning a chemical plant it may be worth giving consideration to marketing the asset to businesses in emerging markets in developing countries as this may be where the most value can be gained for the asset. Once the correct market has been found and a buyer identified they may wish to visit the site to inspect the equipment.
- Step 6 – Contractual Agreements -The terms of the sale need to be agreed, any guarantee’s / warranties and the terms of these must be fully documented and agreed and the contractual agreement should be signed by both parties
- Step 7 – Delivery – The buyer may expect us to ship the item to them or they may wish to arrange shipping themselves. Whichever way round it is important that the asset is packaged correctly for shipping to ensure the asset arrives intact, as sold.
Depending on the nature of the asset additional steps may or may not be required in order to realise the value in the assets.
The process detailed above takes careful consideration and careful planning and a full understanding of the marketplace in which a sale can be made. If exercised correctly a large amount of residual value can be realised in our redundant assets and this can be used to fund growth, new technology or just to provide some much needed capital into our business.