While slumping world commodity prices have taken their toll on the grain handling industry, there is still strong demand for new projects and expansions in several regions throughout the world, according to respondents of a recent World Grain survey of equipment suppliers.
The industry tends to have cycles that are affected by many factors, including political problems, drought, currency devaluation and government finance programs, noted one supplier.
“These factors cannot be completely predicted but they can be studied by keeping a direct contact with customers or commercial teams in those countries,” the supplier said.
Overall, suppliers reported the greatest demand for new projects and expansions has been in Southeast Asia, Sub-Saharan Africa and Mexico. The Black Sea region continues to dominate the demand for new construction, particularly Russia, Ukraine and Kazakhstan.
With 60% of the world’s arable land and tremendous post-harvest losses, Sub-Saharan Africa has increasing demand for safe and effective grain storage, one supplier noted.
But some regions won’t be able to produce enough cereals due to a shortage of water. Water scarcity is particularly pronounced in the Near East/North Africa and South Asia regions, one supplier said. That means several areas will need to increase imports and exports.
“It also means an increase in capacity because the possibility of building suitable harbors is limited,” the supplier said. “The availability of food will still differ a lot from country to country, which makes higher frequencies of food transfer necessary.”
High performing ship loading and unloading systems in combination with large storage installations will help reduce the geographically uneven distribution of food.
In the United States, lower corn prices and increased yields have spurred growth, particularly in the ethanol industry.
Additional trends include increasing demand for feed mills driven by an increase in poultry consumption. Others are receiving construction requests for milling/meal plants.
Complete solutions continue to be a trend with customers asking for an established local partner/supplier who has the capability to assist with building permission and other support in contact with local authorities. Customers want to work with suppliers who can deliver turnkey projects and provide support, back up and experience with international projects and customer relations.
Projects are larger and more complex, which is impacting completion dates that seem to be moving further out in the construction season. Customers are requesting considerably more construction detail pertaining to every aspect of the project, especially for larger projects.
“The layout and footprint of each project is very important to the efficiency of the farming cycle,” one supplier said. “Because of this, they are requesting more information during the site planning phase.”
Silo capacities are increasing, and to maximize the land area in order to control costs, cylinder heights are increasing. One supplier said they have a contract for 20,000-tonne silos with a cylinder height of 29 meters.
Customers are requesting bins that seal better to improve fumigation as well as higher rust protection due to more aggressive climatic conditions. In addition, they are looking for value-added services such as blending, scaling, samplers and increased material handling speed.
Energy efficiency is important as well as dust and noise control. Older elevators located in the outskirts of urban areas are under pressure from local authorities to extend or refurbish plants, one supplier said. For new installations, customers want control systems with remote monitoring and automation, minimizing the amount of personnel needed for operation. The cost of operations, with a focus on personnel, is becoming a key challenge worldwide, one supplier said.
The cost of raw materials for grain storage and handling equipment has a direct effect on the final price of the silo and ancillary equipment. A careful balance is needed between holding steel stock with the financial costs compared to a minimal stock level and the risk of possible price fluctuation, a supplier noted. This is particularly a concern considering the reduction in the number of European suppliers offering the required quality, grades and thickness of steel.
This supplier has developed their own software to monitor the required stock levels to ensure customers have the best price within acceptable lead times.
“The cost of civil construction is having an increasing effect on the total price of a silo storage project, especially when having to consider piling that may be necessary,” the supplier said. “Clients should consider this in the very early stages of the project.”
Technical advice is available based on the specific mode of silo, wind speeds, local seismic activity, snow loads, soil conditions and the number of fill/empty cycles, all of which can impact the final civil construction design, and therefore costs.