By: me-trading

Июль 31, 2018


As your dairy business grows, you will necessarily reach a point where you have to decide whether to buy bigger processing and production
equipment and if you want to buy second hand, refurbished or brand new. This article is supposed to
look at the advantages and disadvantages
of used and refurbished equipment.

1. Possible Scenario

All the food producers out there will understand the following challenge:

The economic situation is very good, sales are going up rapidly and rather sooner than later we will not be able to meet the
rising demand for our product. If we want to keep up with orders, we will have to expand our production capacity. In order to
do so we have to buy suitable machines (let us assume that raw material/milk supply is no problem).

After analyzing the risks and opportunities you come to the conclusion that it would be smart to expand capacities in order
to further grow
the company.

But now another question arises: should you buy used/refurbished equipment or brand new?

The following points shall help you to make a profound decision.

2. Possible Scenario
2.1. Market Risk

As of this writing (06.07.2018), the milk price is once again under considerable pressure and currently, no one knows at which price the next low will be.

Low prices at the supermarket shelf mean lower margins for the farmers and milk processors.

And here we can find an advantage of used and refurbished equipment. In the unfortunate case where milk prices suddenly
are dropping drastically,
the financial pressure is not too high on your company. The reason is that the price for used and
refurbished equipment is rather low and you are
free of expensive service contracts that original equipment manufacturers
(OEM) usually impose on you when buying a new machine.

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