Corporate Banner
Satellite Banner
Technology
Networks
Scientific Communities
 
Become a Member | Sign in
Home>News>This Article
  News
Return

Strategies to Maximize Return on Idle Equipment

Published: Friday, July 05, 2013
Last Updated: Friday, July 05, 2013
Bookmark and Share
Many forward-thinking companies now take a proactive approach to managing their surplus and idle laboratory instruments and process equipment.

Redeployment of assets within the business – perhaps moving lab instrumentation or plant equipment to another facility when required – may be the ideal scenario, but in some cases, sale or disposal of assets is the chosen route. Here we speak with Roger Gallo, President and CEO, EquipNet Inc., the global leader in this field, as he answers some of the most frequently asked questions about how to achieve a good return on equipment that needs a new home.

How much of a market is there for used equipment and what sort of value can be realized by this practice?

There certainly is a market but, like many areas of business, you need to know what you are doing to access it successfully. Working with our clients, we think through a company’s overall goals. For some, speed of liquidation is critical; with others who perhaps have higher value equipment and/or more time, achieving the highest financial return is the key. For many, it’s somewhere in between these two axis points. That’s why we developed our Value Control Model. Figure 1 shows how redeployment, negotiated sales with managed pricing through an on-line marketplace, competitive auction events and clearance programs fit together to deliver a consolidated service, whatever the individual needs of a company. 

Sounds straightforward, but with organizations that have a large amount of assets – laboratories and manufacturing facilities full of the equipment and machinery required for operation, for example – the situation can be complex. Our clients are researching cures for cancer and developing new drugs. They are not equipment experts and they are the first ones to admit that having a specialist help in this regard is critical to the success of an asset management program.  

As far as the value recovered, data collected from a member survey of the Investment Recovery Association, based in the US [1], demonstrated the benefits of a professionally managed investment recovery program and the bottom-line value it can provide:

Asset investment recovery can save companies an average of $13 million a year; individual companies have saved as much as $150 million a year from asset management services
70% to 90% of every sales dollar generated by investment recovery goes straight to the bottom line as profit

If we consider the results of a current client relationship; we began work on a global initiative with a major company around 10 years ago, the goal was to allow visibility of assets across multiple manufacturing sites. Using the approach described above, they have been able to not only share and redeploy assets between sites and sell-off their surplus equipment, but also to consider the purchase of premium pre-owned assets from other top-tier manufacturers. The program has so far generated over $14 million in savings. 

What have been the drivers for the growth of this market?

The growth of specialist asset management services in the pharma and biotech sectors over the last 10-15 years has been driven in large part by the turbulent times experienced in the industry. Looming patent cliffs, lost revenues from generic introductions and strategic mergers and acquisitions (M&A) have all had an impact. Between 1988 and 2000, more than $500 billion worth of mergers and acquisitions took place [2], and recent Bloomberg reports cite a total of 676 takeovers of biotech by pharma companies in the last three years [3]. Market experts from PriceWaterhouseCoopers believe there is still the possibility of considerable M&A activity for large pharma in 2013 [4]. 

A further driver is the rise in contract manufacturing. MarketResearch.com [5] has analyzed the expansion of the industry and predicts annual growth of 11% for the next 2 years. Biopharm and pharma companies are turning to contract manufacturing as a means to increase efficiency or acquire particular expertise, and to keep up with the growing demand for pharmaceuticals in both western and growing economies. The growing generics market is another positive trend for the used lab equipment industry, with its clear focus of cost-efficiency. 

Of course, it is not just manufacturing facilities that are prone to redundancy. Often pharmaceutical companies invest millions of dollars in state-of-the-art lab and analytical equipment to design, formulate and test a new drug, only to be left with idle assets if, for example, the drug fails to receive regulatory approval, the company relocates development to another site, or shifts focus to another therapeutic area.

Whatever the driver, I am pleased to note that forward-thinking corporations such as Merck, Novartis, Johnson & Johnson, GE Healthcare, and many more, are utilizing our structured programs to maximize their financial returns, meet critical deadlines, avoid unnecessary costs, and prevent health, environmental, and theft hazards associated with idle assets. 

How do you help a company if it needs to close a facility? 

When a company closes down a plant or lab facility, we see that for some, little consideration is given to the equipment inside the buildings until the last minute. Assets often have to be sold off quickly for a fraction of their realisable value. This is where a team of specialists such as ours comes into its own. EquipNet people have expertise in working with pharma manufacturers as they reconfigure facilities, or choose to shut down a site completely. They can analyze the operations, provide fair market appraisals on the equipment, make recommendations, and provide a prospective schedule for change long before the site shuts down.

What makes EquipNet the world leader in this field?

Our passion for client service, our global footprint, and our flexible approach and dedicated programs have allowed EquipNet to become the world’s largest asset management company in our chosen markets. We assist companies to buy and/or sell pre-owned laboratory instrumentation, manufacturing equipment, and plant utilities in the pharmaceutical, biotech, chemical, food, beverage, and personal care sectors. EquipNet is the largest supplier of used and unused pre-owned pharmaceutical equipment in the world. For example, at any time, our MarketPlace™ contains details of more than US $100 million worth of pre-owned equipment from some of the biggest pharmaceutical companies in the industry. Of course, our people have had a big impact too; most members of our team of specialists have long experience in the pharma and chemical markets, and with EquipNet.

The company was founded in Massachusetts, USA in May, 1999, and has grown from two original employs to its current staff of 115 people, with headquarters in Canton, MA and offices across the globe, including Canada, Latin America, UK and Europe, India, and Asia.

To sum up – what would be your top tips for our readers?

Good question, my summary would be – think as far ahead as you can, constantly evaluate the situation with your company assets, develop an ongoing overall program for all assets instead of a reactive approach for individual closures, and be proactive in planning any disposals. And, of course, rely on EquipNet as your partner in realizing full value in everything that you do!


Further Information
Access to this exclusive content is for Technology Networks Premium members only.

Join Technology Networks Premium for free access to:

  • Exclusive articles
  • Presentations from international conferences
  • Over 2,500+ scientific posters on ePosters
  • More Than 3,700+ scientific videos on LabTube
  • 35 community eNewsletters


Sign In



Forgotten your details? Click Here
If you are not a member you can join here

*Please note: By logging into TechnologyNetworks.com you agree to accept the use of cookies. To find out more about the cookies we use and how to delete them, see our privacy policy.


Scientific News
The Changing Tides of the In Vitro Diagnostics Market
With the increasing focus in personalized medicine, diagnostics plays a crucial role in patient monitoring.
LaVision BioTec Reports on the Neuro Research on the Human Brain After Trauma
Company reports on the work of Dr Ali Ertürk from the Institute for Stroke and Dementia Research at LMU Munich.
NIH Study Shows No Benefit of Omega-3 Supplements for Cognitive Decline
Research was published in the Journal of the American Medical Association.
Less May Be More in Slowing Cholera Epidemics
Mathematical model shows more cases may be prevented and more lives saved when using one dose of cholera vaccine instead of recommended two doses.
Investigating the Vape
Expert independent review concludes that e-cigarettes have potential to help smokers quit.
NIH Launches Human RSV Study
Study aims to understand infection in healthy adults to aid development of RSV medicines, vaccines.
Researchers Discover Synthesis of a New Nanomaterial
Interdisciplinary team creates biocomposite for first time using physiological conditions.
Poor Survival Rates in Leukemia Linked to Persistent Genetic Mutations
For patients with an often-deadly form of leukemia, new research suggests that lingering cancer-related mutations – detected after initial treatment with chemotherapy – are associated with an increased risk of relapse and poor survival.
Flu Remedies Help Combat E. coli Bacteria
Physiologists from the University of Zurich have now discovered why the intestinal bacterium Escherichia coli (E. coli) multiplies heavily and has an inflammatory effect.
Marijuana Genome Unraveled
A study by Canadian researchers is providing a clearer picture of the evolutionary history and genetic organization of cannabis, a step that could have agricultural, medical and legal implications for this valuable crop.
Scroll Up
Scroll Down
Skyscraper Banner

Skyscraper Banner
Go to LabTube
Go to eposters
 
Access to the latest scientific news
Exclusive articles
Upload and share your posters on ePosters
Latest presentations and webinars
View a library of 1,800+ scientific and medical posters
2,500+ scientific and medical posters
A library of 2,500+ scientific videos on LabTube
3,700+ scientific videos
Close
Premium CrownJOIN TECHNOLOGY NETWORKS PREMIUM FREE!