HOUSTON MATERIAL

HANDLING SOCIETY
MEETING

NOVEMBER 18, 2008

“I hope I can stay awake through
this guys presentation.”
 “They overfeed us then put on this

right after dinner to talk about things

I already know.”
“What’s in this for me?”
 Hopefully you will

 Come away with a better

understanding of the key elements
driving capital projects

 Develop ideas that improve the

marketability of your services and
the netback of your projects and
products
 Agrico Sales
 An equipment manufacturer and
general construction organization

 Specializing in the WE
design and  Design
construction of  Engineer
dry bulk material  Fabricate
handling and  Erect
storage systems  Electrify
 And help start up
the projects we
build
Agrico Sales

•Provides a confidential budget

quote to modify a facility

We do this at no cost to you

This saves time and money

determining if a project meets
guidelines for investment
We Build
Agrico’s recent customers include:

 Exxon
 Jacobs Engineering
 Marathon Ashland Petroleum
 Petro-Canada/Bantrel
 Great Lakes Carbon/Aimcor (now Oxbow)
 Ferrominera Orinoco
 CII Carbon (multiple projects)
 Bunge Grain
 Ansac
“What’s in this for Bob?”
We hope this presentation
causes you to remember Agrico
Sales as you develop dry bulk
projects
Key elements in handling dry bulk
 Safety

 Environmental Soundness

 Reliability and ease of

maintenance

 Efficient product movement

Safety
 In addition to all of the usual safety concerns in
a process i.e. refinery, dry bulk handling can
add the dimension of mobile equipment such as
front-end loaders and trucks

 In addition to trucks and front end loaders there

may be belt conveyors, reclaimers, etc. which
require guards and possibly restricted areas
Environmental
 Like safety, environmental has several
levels of governmental and corporate
regulations to govern its handling and
storage every step of the way

 In addition to this, dry bulk operations

are often considered an eyesore even if
all environmental considerations are met
 Environmental equipment:
 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
Reliability and ease of maintenance
 Handling systems often need to operate every
day. The basics of good preventive maintenance
apply to this equipment involved just as it does
on other operating units

 When building new or revising an existing

handling facility, build in as much flexibility as
possible because…

Things Change!
Efficient delivery to the market place
There are many ways to move dry bulk and several of these
are often employed between you and the end user
Handling methods:
 Mobile equipment
 Pneumatics
 Belt conveyors
 Trucks
 Railcars
 Barges
 Ocean going ships
Basic principles of dry bulk movement:

 THE TRANSPORTATION COST OF A PRODUCT

CAN BE A LARGE PORTION OF THE TOTAL
COST.

 WHILE PRODUCT/PROCESS CHANGES CAN BE

VERY EXPENSIVE TO MAKE, THE COST OF
DELIVERING IT TO THE MARKEPLACE CAN BE
RELATIVELY EASY (INEXPENSIVE) TO CHANGE

 THE ABOVE TWO BULLETS CAN GREATLY

IMPACT PROFITABILITY
Old delivery system
$/ST
 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
Improved delivery system
$/ST

 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
A Difference of $18.80/st
Or 50%
Which is 27% of delivered
cost of the product
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 as
possible

 Eliminate handling steps whenever

possible
General rules of thumb for dry
bulk movements:

 Use the lowest cost method of

conveyance for the distance involved

 Move shipments in the largest lots

possible
General rules of thumb for dry
bulk movements:

 Explore methods of improving the

total logistic chain with the end user

 There is strength in multiple modes of

shipping or multiple carriers
Summary
 Optimizing logistics will have a
positive financial impact no matter
what the market conditions
 A few extra dollars per ton can help
when struggling to improve profits
or stay in the black
 This can often be the justification
needed for capital projects
QUESTIONS ?
Agrico Sales, Inc
Phone: (504) 436-9400
Fax: (504) 254-6458
E-Mail: brieck@agricosales.com
Website: agricosales.com
Address: 14900 Intracoastal Dr.
New Orleans, LA 70129
USA