Add Up Your Long-Term Expenses

Asphalt ROI:  Part 3 of a 6-Part Series

Determining if your business would benefit from owning an asphalt plant — or from buying a larger plant and components — can seem overwhelming. We’re here to help you take it one step at a time.

In this blog series, we’re evaluating the factors to consider before purchasing an asphalt plant and accessory equipment. In the first two parts of the series, we looked at market size and operational location. In this third part, we’ll help you examine costs.

With prices ranging from $500,000 to $4 million, an asphalt plant is a serious investment for any company, small or large. While it is necessary to compare plant prices and what is included with each model, don’t forget to also look at operating costs and production capacities. A plant may cost less initially, but if it isn’t fuel-efficient or doesn’t produce enough tons per hour for efficient operation, it will cost more over the course of its lifetime.

Also, look at how much will need to be invested from the start, such as the cost of the mix components. This will help you calculate how much to charge per ton to turn a profit, while still keeping the price fair.

A first-time buyer will often make the mistake of letting the price of the plant dictate the decision and end up purchasing a plant that isn’t the ideal size. Once a company has control of its own asphalt supply, it will be able to sell hot mix and lay down considerably more material. Purchasing a plant that is too small will not be able to effectively support the demand.

On the other end of the spectrum, purchasing a bigger plant won’t necessarily be the right decision either. A plant with a capacity that greatly exceeds demand would be wasteful and unprofitable. While price is certainly a large factor in choosing a plant, don’t let it influence the decision too heavily. Stay focused on what type of plant makes the most sense for the present situation.

Do you have questions about sizing an asphalt plant for your operation? Contact us!