The higher an elevator the more expensive storage of every ton of grain – research by ProAgro

11:39 | ProAgro

Recently, a number of companies began to construct grain silos of different type and capacities in Ukraine. For example, a large Ukrainian agricultural holding Astarta plans to build elevators by 2012 with simultaneous storage capacity totalling 200-250 thousand tons; an agricultural company Nibulon investment project envisages construction of seven elevators and river terminals - the total grain storage volume at the first stage will be 300 thousand tons, and after implementation of the second stage (by July 1, 2010) elevators’ capacity will double.

At the same time, a negative factor effecting elevator construction scale can be its cost, and first of all it depends on its capacity. The price rises if an elevator is equipped with additional systems, for example, with drying units. And a drying system cost may depend on its capacity.

Besides, an elevator cost depends on construction material. The cheapest objects are those constructed using metalwork. The most expensive are made of bricks. Elevators made of thermo-insulating materials are positioned in the middle price class.

Equipment placed at an elevator is of great importance, and the price situation is similar. In its turn, equipment prices and its quality do not always match.

To help the agrarian market participants and beginners to make a right choice of elevator equipment ProAgro prepared a research on Ukrainian grain storage and elevator industry market. The study contains analysis of modern equipment operational parameters and indicators. It should be mentioned that it is difficult to compare different elevator equipment as it can have different galvanization - from 250 to 400 Gy/m2,- ladder systems, trap-doors, etc, different thermometry and aeration systems, screw elevators productivity and the most important, high dependence on the silo size - the higher the elevator is the more expensive ton storage will be.

In their turn, the main suppliers and buyers emerged on the elevator equipment market. According to the ProAgro data, in 2007-2008 CJSC Rise became the key Ukrainian buyer of import equipment for grain and processing industries, and the main foreign equipment supplier was GSI International - 15.1% of the total equipment imports by value. With regard to seasonality of the imported equipment for grain and processing industries supplies, one should say that in 2008 its largest volume was purchased in July-October.

If funds for a new elevator construction are not available, an old elevator can be bought. Considering its low purchase price, modernization inputs often influence its economic efficiency not less positively than construction of an elevator "from zero".

Currently, old elevators offered at the market are mainly estimated at $70-90 per a stored ton during purchase, and they require modernization inputs of nearly $25-50 per a ton. Usually, it is supposed that such elevators will be operated at least for ten years after modernization. Advantages of the purchase of an old elevator are those of lower inputs and shorter payback period.

You can find additional information on Ukrainian elevator services market in the new research by ProAgro that was mentioned above - "Ukraine: Grain Storage System and Silo Industry"

To get additional information about this work, please, contact to ProAgro Information Company: