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HOUSTON MATERIAL
HANDLING SOCIETY
MEETING
NOVEMBER 18, 2008
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I hope I can stay awake through
this guys presentation.
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They overfeed us then put on this
right after dinner to talk about things
I already know.
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Whats in this for me?
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Come away with a betterunderstanding of the key elements
driving capital projects
Hopefully you will
D
evelop ideas that improve themarketability of your services andthe netback of your projects andproducts
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WE
An equipment manufacturer andgeneral construction organization
Specializing in thedesign andconstruction ofdry bulk material
handling andstorage systems
Design
Agrico Sales
Fabricate
Erect Electrify
And help start upthe projects we
build
Engineer
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Agrico Sales
Provides a confidential budget
quote to modify a facility
This saves time and moneydetermining if a project meets
guidelines for investment
We do this at no cost to you
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We Build
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Agricos recent customers include:
Exxon
Jacobs Engineering
Marathon
Ashland Petroleum
Petro-Canada/Bantrel
Great Lakes Carbon/Aimcor (now Oxbow)
Ferrominera Orinoco
CIICarbon (multiple projects) Bunge Grain
Ansac
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Whats in this for Bob?
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We hope this presentation causes
you to remember Agrico Sales
as you develop dry bulk projects
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Key elements in handling dry bulk
Safety
Environmental Soundness
Reliability and ease ofmaintenance
Efficient product movement
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Safety
In addition to all of the usual safety concerns ina process i.e. refinery, dry bulk handling can addthe dimension of mobile equipment such asfront-end loaders and trucks
In addition to trucks and front end loaders theremay be belt conveyors, reclaimers, etc. whichrequire guards and possibly restricted areas
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Environmental
Like safety, environmental has severallevels of governmental and corporateregulations to govern its handling and
storage every step of the way
In addition to this, dry bulk operationsare often considered an eyesore even if
all environmental considerations are met
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Water sprays at transfers or load points and stockpiles
Chemical additives to water sprays
Scrapers, drip pans & totally enclosed belt conveyors
Wash down systems
Dust collectors
Covered storage
Settling ponds
Environmental equipment:
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Reliability and ease of maintenance
Handling systems often need to operate everyday. The basics of good preventive maintenanceapply to this equipment involved just as it doeson other operating units
When building new or revising an existinghandling facility, build in as much flexibility aspossible because
Things Change!
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Efficient delivery to the market place
There are many ways to move dry bulk and several of theseare often employed between you and the end user
Mobile equipment
Pneumatics
Belt conveyors
Trucks
Railcars
Barges
Ocean going ships
Handling methods:
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THE TRANSPORTATIONCOST OFA PRODUCTCAN BE A LARGE PORTION OF THE TOTALCOST.
WHILE PRODUCT/PROCESS CHANGES CAN BEVERY EXPENSIVE TO MAKE, THE COST OFDELIVERING IT TO THE MARKEPLACE CAN BERELATIVELY EASY (INEXPENSIVE) TO CHANGE
THE ABOVE TWO BULLETS CAN GREATLYIMPACT PROFITABILITY
Basic principles of dry bulk movement:
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Old delivery system
Ship railcars 90 miles (includes cost to ship heel back to refinery) 13.00
Contractor dig coke from Cars with backhoe 1.65
Truck 1/4 mile to a grizzly over a hopper 1.25
Contractor breaks lumps through the grizzly to load barges 1.80
Railcar demurrage 4.00
Barge movement to Gulf coast 4.75
Store coke in barges until 1 day before it is needed 4.50
Contractor dig coke from barges & load rail cars 2.45
Rail coke 3 miles to production facility 3.50
Unload railcars 2.00
Total $38.90
$/ST
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Improved delivery system
Ship railcars 90 miles 10.00
Terminal unload cars with Backhoe and remove heels through the bottom & load barges 4.05
Barge movement 3.65
Pay contractor to unload Barges to plant storage 2.40
Total $20.10
$/ST
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A Difference of$18.80/st
Or 50%Which is 27% of delivered
cost of the product
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General rules of thumb for dry
bulk movements:Deliver product to the primary method
of conveyance as soon as possible
If water movements are involved,move your product to water as early aspossible
Eliminate handling steps wheneverpossible
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General rules of thumb for dry
bulk movements:
Use the lowest cost method ofconveyance for the distance involved
Move shipments in the largest lotspossible
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General rules of thumb for dry
bulk movements:
Explore methods of improving thetotal logistic chain with the end user
There is strength in multiple modes ofshipping or multiple carriers
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Summary
Optimizing logistics will have apositive financial impact no matterwhat the market conditions
A few extra dollars per ton can helpwhen struggling to improve profitsor stay in the black
This can often be the justificationneeded for capital projects
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QUESTIONS ?
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Agrico Sales, IncPhone: (504) 436-9400
Fax: (504) 254-6458
E-Mail: [email protected]
Website: agricosales.com
Address: 14900 Intracoastal Dr.
New Orleans, LA 70129
USA