Equipment Purchasing Case Study

Equipment buyout for food processing company

Our client

Project Type: Equipment Purchasing
Industry: Food Processing

Our client is a global food processing company that owns more than ten major brands, each generating more than $1 billion in annual revenue.

Due to supply contracts with distributors, production halts may result in financial penalties. To ensure steady production in each of their facilities, our client surplus stocks maintenance, repair and overhaul (MRO) equipment and spare parts for expedite equipment repair, retooling and upgrades.

Prior to approaching us, our client had accumulated more than $30 million dollars’ worth of various types of surplus and used MRO and spare parts.

Our Client's challenge

Prior to engaging with NRI, the client listed out 3 problems they wanted to address:

Challenge #1

Our client’s MRO and spare parts included electrical, hydraulic and pneumatic equipment, as well as instrumentation, transmissions, pumps and valves. Independently selling the equipment would have required resources that our client was unable to provide.

Challenge #2

Our client stocked surplus MRO at more than 35 plants across North America. Our asset recovery strategy had to coordiante the logistics involved in transporting the equipment.

Challenge #3

If our client disposed of their idle inventory, it would have violated their CSR pledge to make their operations more sustainable.

How we helped

Since our client’s surplus MRO and equipment was unused, we purchased their assets at a competitive rate of more than $1.5 MIL.

This purchase included arranging the necessary logistics to coordinate transportation from our client’s 35 facilities.

The results

After leveraging our expertise, our client:

More Space

Removed 103,000 line items (SKUs) from storage

More Value

Recouped more than $1.5 million dollars on idle inventory and was eligible for more than $28.5 million dollars’ worth of tax deductions

More Sustainability

Avoided costly equipment disposal fees and fulfilled their CSR pledge to operate more sustainably