Demolition of idle facilities can pay for themselves through recoverable assets. The significant value contained within heavy industrial facilities due to steel, copper, aluminum, and exotic metals content allow clients the opportunity to demolish these shuttered liabilities and turn them into positive capital. But there are many more reasons to demolish a facility. Demolition of an idle facility offers the benefits of decreased liabilities, reduced maintenance costs, minimized tax burdens, improved balance sheet, to name a few, all without capital outlays.
The economic slowdown has led to the idling of many manufacturing facilities in the United States. While these plants sit idle they continue to represent a significant cost burden due to taxes, and maintenance costs. They also can pose a daunting liability challenge as owners remain responsible for keeping the facilities secure and free from thieves and trespassers who could become injured and file suit.
The key to extracting maximum asset values from a facility has been access to global buyers. In the past it was common for demolition contractors to assume ownership of the facility assets and return little or nothing to the client as a credit. Much of this low valuation of assets was due to the practice of selling assets into the local market. Today, scrap sales have become an international business. By selling the assets to international buyers, facility owners can often realize return on asset value several times that of the domestic market. The high value of scrap on the international market has motivated many industrial facility owners to maintain ownership of assets through the demolition process or negotiate joint ownership arrangements with their demolition contractors
Available options for the facility owner include transferring ownership of assets to the demolition contractor at project commencement for a fixed credit payment; maintaining a portion of the commodity ownership and receiving periodic asset payments throughout project execution based on monthly commodity values; or retaining full ownership of the assets throughout the project and taking the entire risk of commodity market value fluctuations. The asset owner’s appetite for commodity value risk determines where he wishes to fall on this spectrum.
The best course of action begins with securing the services of an experienced and highly qualified demolition and asset recovery services company to provide full access to the international commodity markets. This will provide you the owner a comprehensive plan for the demolition and recovery of all assets with full valuation. Given today’s rising commodity values and lower demolition costs; there was never a better time to have a cost free evaluation done on demolition of your inactive facilities.
Envirocon has office locations across the United States, and with the establishment of Envirocon Canada Services (offices in Calgary and Vancouver), we now offer clients throughout North America the ability to turn their liabilities into assets.