SMB Machinery Systems LLC 2563 Airport Industrial Dr
SMB Machinery Systems LLC 2563 Airport Industrial Dr. Ball Ground, GA 30107 770 -704 -2000 www. smbsales. com
Beverage Manufacturers in USA (Non-Alcoholic) § Consolidation From 5, 000 to 300 major CSD facilities –driven by Coke, Pepsi & DPSG buying small franchisees, rolling them up into “anchor” bottlers and spinning off the anchor bottler and then finally in 2010 -11, buying back the anchor bottlers § Approximately 430 still beverage facilities including major water facilities (Coke, Pepsi, Nestle, Niagara, Ice River Springs, Crystal Geyser, Premium Waters, juice/tea facilities (Coke (Minute Maid, Powerade, Vitamin Water, Fuse, Honest Tea, Odwalla), Pepsi (Gatorade, Tropicana, Lipton, Naked Juice), DPSG (Snapple, Motts, Orangina), various Co-packed items
Beverage Manufacturers in USA (Alcoholic) § 150 major breweries (where production is greater than 6 mm barrels per year (31 gallons per barrel) – ABInbev, SABMiller, Molson. Coors, Yuengling, Sam Adams Etc. § 1, 200 microbreweries and growing (where production is less than 6 mm barrels per year and no more than 25% ownership is from a non-craft brewer) § 300 wineries with production capacity of 50, 000 or more cases per year § 200 distilleries with production capacity of 52, 000 or more cases per year
Machinery Overview What is a high speed line? § Slow speed line – up to 300 bpm on single serve packages – typically a small co-packer or old line in a major manufacturer – new cost $1 mm to $2 mm § Medium speed line - up to 500 bpm – typically a larger co-packer or 15 year old line in a major manufacturer – new cost $3 mm to $5 mm § High speed line – above 500 bpm – typically a new or up to 15 year old line in a major manufacturer – new cost $4 mm to $20 mm
Various US manufacturers Many in business for >50 years q Crown, Meyer were the majors – now out of business but supported by aftermarket OEM remanufacturers/parts manufacturers q Most equipment installed prior to 2000 was from various suppliers • Some made the best fillers, process equipment, packaging, palletizing, etc. but in general, nobody did everything really well q In the USA, equipment installed since 2000 still mostly from various USbased suppliers but now more and more are from one of the “big 3” European manufacturers • Krones & KHS (German), Sidel (France/Italy) • German equipment maintains value better • Italian equipment more often updated & changed – spare parts and service support fair to poor and differs from year to year more often q Some inroads from Chinese manufacturers but not in major facilities yet • Price much less until electricals & other items made comparable to US • • machines Chinese have very little US-based service and spare parts capability Quality and innovation suspect – mostly R&D (Rob & Disguise)
Equipment specific to the beverage industry § § Fillers Cappers Mix Processors/Thermal Processors Warmers Equipment useful in various industries § § § Blowmolders Depalletizers Conveying systems (usually as component) Seamers Labelers Case & tray packers Case & tray erectors Shrinkwrappers Palletizers Stretchwrappers Support Equipment • Air compressors • Refrigeration • CO 2 • Water treatment (RO) • Boilers • SS tanks
Ruggedness of Machinery § Many machines 30+ years old (some 50 years old now) § Much of it designed for harsh (washdown & chemical) environment § 3 -shift operation with 20+ hours/day of use, up to 7 days/week
Market Size § >$100 Million total in used beverage machinery sales per year § >$60 Milllion in non-alcoholic beverages § >$40 Million in alcoholic beverages Growth § Non-alcoholic – juices, teas, still and sparkling waters § Alcoholic – microbreweries, micro distilleries
Value Drivers § Size of machine –Values at small and middle end of speed range higher due to recent microbrewery demand few customers at ultra high speed range § Package material (glass, can, plastic) § Age (series) of machine § Controls (PLC vs. relay, Allen-Bradley vs. Seimens) § Condition
Trends in Industry § Lightweighting of packaging - water bottles from 20 grams to 9 grams § Caps from 28 mm 1810 to 26. 7 short cap. 43 mm to 38 mm to 33 mm to 28 mm closures § Self-manufacturing of packaging materials § Bottles being made in plant to reduce freight costs and working capital § Caps being self-made in order to reduce costs (water caps only) § Continued consolidation § Coke & Pepsi to close another 30+ facilities in the next 5 to 7 years – driven by parent company ownership & drive toward more flexible & varied (water, carbonated, juice) manufacturing within fewer facilities (brewery model) § Beverage processes being developed to reduce energy & manufacturing complexity. § Some older US filling equipment is still preferred and being remanufactured instead of new machines being built § Much shorter product life cycles § Old is new again – natural sugars, glass bottles, aluminum and steel closures
Value Trends § CSDs becoming less popular in mass market but are currently trendy for small “handcrafted” type drinks § Many plant closures could drive beverage-specific machinery values lower § Package proliferation § Levels of trade § Ability to sell to other industries § Conveying, packaging and processing to food industry § Tanks last indefinitely and sell for more (50%) than several years ago before runup in stainless prices § Customers demanding operational equipment § International opportunities for most shippable items § Refrigeration & air compressors to various non-food or packaging industries
Example - Big Springs Huntsville, AL § Products produced – carbonated soft drinks (CSDs) in plastic and glass bottles and cans § Lines • (2) 1, 000 cpm 12 and 16 oz can lines • (1) 250 bpm 2. 0 and 3. 0 L PET line • (1) 600 bpm 20 oz PET line • (1) 500 bpm 120 z glass line § Age – facility approximately 40 years old, much equipment replaced in 2007 § Reason for closure – decision made to purchase product from Coca-Cola instead of self-manufacturing § Facility size – approximately 200, 000 sq ft (production & warehouse) § OLV value – approximately $4. 0 mm § OLV period – 9 to 12 months
SMB Machinery Systems LLC § SMB is a Premier Provider of Used Packaging Machinery, Processing Equipment and Technical Services § Has been Serving the Industry for Over 20 Years § Superior One Stop Service § § § Appraisal Plant Closure & Removal Rebuild, Paint and Machine Shop Parts Department Controls and Automation UL Panel Shop
The Most Reliable And Capable Single-source Solution For All Your Manufacturing Equipment Needs “Under Commit, Over Deliver” SMB Machinery Systems LLC 2563 Airport Industrial Dr. Ball Ground, GA 30107 770 -704 -2000 www. smbsales. com
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