Strategic Marketing Plan Marketing Channels
Executive Summary We design and build equipment guaranteed to perform as expected or be prepared to take it back and never sacrifice the future for short term gain. The Marion brand is recognized as a leader in the processing industries where equipment is shipped to most states and provinces in North America and to over 70 countries globally. Marion Mixers manufactures mixing and blending equipment for the processing industries. This experience as a custom design capital equipment manufacturer has enabled Marion Mixers to design, fabricate and assemble processing equipment involving over 1,000 different product applications. New product innovation, plant expansions and cost reduction initiatives drive demand for Marion Mixers products. The core areas of expertise are in the food, plastic, chemical and the mineral industries. The company also has extensive experience within other industries such as pharmaceutical, petrochemical, coatings and animal feed. The recycling industry and waste-to-energy bio-solids and biomass feedstock mixing and drying are other growth industries for the company. Marion Mixers is more than just a mixer manufacturer. They are a “turnkey” processing solution provider as well. Their sales representative network consisting of product handling and processing capital equipment specialists work with the Marion project team to provide project consulting and equipment designs to meet application needs. Areas of focus with this strategic marketing plan unclude: Market size Current demand in target markets Growth history Trends in target markets Channel Management •
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The following charts and tables for this study illustrate mixer sales by market segment. Beginning mid-decade (2000-2010) the following industries were considered target industries: Food, Bakery, Plastic, Chemical and Construction Minerals as shown below. Summaries of each designated market may be found in the Appendices. This information includes a breakdown by industry listing, industry description, product requirements, customer types, estimated market size, competitor analysis and forecast trends of that particular industry. In addition, a competitive analysis based on o n the estimated sales by industry for our top four competitors at the time of this study is shown in the Appendices.
Market Segmentation
Shipped Mixers by Core Industry
Chemical
Recycle
Plastic ($
Pharmaceutical
"%$
Food
Chemical
Mineral "#$
Pharmaceutical
($
Plastic Recycle %&$ %'$
Food Mineral
Market Segment Share of Marke t Plastics 12% Recycled 29% Construction 13% Soap / Detergent 3% Dairy 1% Agriculture Feed 1%
Grout 5%
Pharmecuetical 1% Food 15%
Chemical 10% Bakery 10%
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Estimated Market Size
The following table lists estimated market sizes and forecasts for growth, profitability and ease of market entry. (Dollars in 000’s)
Industry Segment Plastics Construction
Soap / Detergent Dairy Fertilizer Agriculture Feed P harmaceutical Chemical Bakery Food Grout Recycled Others T otal
(10 = high, 1= low)
Estimated Projected Market Growth Size Rate Rate Profi Profita tabi bili lity ty
$5,000 $4,000 $2,000 $500 $2,000 $1,000 $3,000 $4,000 $3,000 $4,500 $2,000 $3,000 $6,000 $40,000
8
10
5 3 2 3 3 5 4 3 3 8 8
5 7 8 3 3 7 8 8 10 7 4
Market Share The Powder Bulk Solids show directory directory lists 42 companies as suppliers of dry solids solids mixers. Of these companies, 23 competitors have published advertisements in trade journals for horizontal shaft mixers. Marion and Lowe* routinely compete with 12 competitors.
*Lowe is a division of Marion Mixers. Industry sales numbers are typically not published in this industry. Many of the companies are private companies. Many competitors are privately held and produce a variety of products, which are not mixers. Facts about the Marion Mixers market share: •
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The domestic market size for mixers competing in this design is estimated to be $40 million. Marion and Lowe comprise roughly 10-19% market share (estimate.) Marion and Lowe have opportunities to quote about 50% of the available projects. In some markets it is much less (i.e. <25%). The remaining projects are supplied by preferred or existing vendors. #
Traditionally 60-70% of Marion and Lowe orders are a result of repeat buyers. That number continues to change.
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Competitive Intelligence Estimated Competitive Market Share Marion Mixers, American Process and Scott Equipment compete co mpete nationally on a wide variety v ariety of projects. Competitors like AIM, HC Davis, Reimelt Henschel and Littleford sell sell nationally but to a smaller variety of targeted industries. Many of the small manufactures included in the “Other” category sell mixers within geographic regions close to their place of business. Competitive Performance Analysis Company
American Process Gurnee, IL
Strengths • • •
Scott Equipment New Prague, MN
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Ross Equipment Hauppauge, NY
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Hayes & Stoltz Fort Worth, TX
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Kelly Duplex Springfield, OH
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Littleford - JH Day Florence, KY
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Used Equipment
• •
Aggressive sale / marketing Wide product breadth Good cosmetic appearance Low price point Wide product breadth Aggressive sales / marketing Advertise “1/3 less cost” Advertise “Mixers in stock” Good brand name recognition Strong financial stability Good quality industrial designs Low price point Cast bolted arm design Good quality industrial designs Low price point Reputation for good quality Strong brand name Low price point Price point at 65% of new Brand preference not an issue Relatively fast delivery
Weaknesses • • • • • • • • • • • • • •
• • • • • •
Over promise / under perform Average fit and finish Foreign ownership Less than average quality Average customer focus Financial stability Limited application experience New to horizontal horizont al mixer industry indus try No test mixer capabilities cap abilities Known for Ag feed mixers Limited industrial applications No test mixer capabilities cap abilities Mixers are not primary focus Focused on Ag feed mixers Re-entering horizontal market One size fits all Foreign manufacturing One size does not fit all Buyer beware of purchase Limited application experience
Price
Littleford-Day is the only company with prices higher than Marion and Lowe. Ross has generic mixers in stock and discounted by 1/3 of engineered mixers to compete with used equipment suppliers. Delivery Production lead-times for Marion and Lowe mixers are competitive with other custom engineered blenders. • •
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$
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Competitors with low cost, foreign manufacturing sources are shipping large inventories of stock blenders in order to reduce shipping costs (JH Day and Ross). Availability of stock mixers is detrimental to used equipment dealers. JH Day and AIM have generic mixers in stock for immediate delivery.
Competition Mixer manufacturers such as Ross, AIM, Aaron, and Equipment Xchange advertise stock mixers with “immediate delivery capabilities.” Ross is importing mixers mixers from their production production facilities in China. They advertise, new ribbon blenders priced 30% less… dozens in stock from 1 to 120 cu. ft. •
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AIM is building stock mixers in Missouri (Probably Springfield). Stock sizes up to 150 cu. ft. for both 35 and 60 lbs/ft3 lbs/ft3 materials. They are priced higher than Ross and Day but below Marion Mixers and Lowe. Aaron is advertising a multi-facet equipment approach: Used equipment at low cost / immediate delivery o o New stock mixers at standard price / immediate delivery Custom mixers designed and built to the customer’s specs. o JH Day is importing standard trough and agitator frames from Brazil and then making modifications in the States. JH Day offers both stock and custom mixers.
willing to sacrifice custom design features for faster faster delivery Conclusion: Some customers are willing and/or low price. This results in fewer field changes and inevitably more operator inconveniences. Market Trends Suppliers of horizontal blenders can be grouped into three categories: Custom Manufacturers – Companies like Marion, Lowe, Scott and American Process who design and build equipment specifically for for each application. Customers typically review approval drawings drawings prior to fabrication. 30% deposit is standard. A custom fabrication strategy promotes brand preference, customer loyalty and a premium price over “standard” designs. designs. Lead-times are generally 8-10 weeks. •
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Standardized Manufactures – Companies like Ross, AIM, JH Day and Lee Industries build pre-engineered sizes of mixers. Each frame size may be used in numerous applications. The customer is responsible for field modifications to make the equipment fit the process. Some competitors advertise 30% lower lower price. Others charge a premium premium for fast delivery. Lead-times are generally 0 to 2 weeks. Used Equipment Dealers – Companies like Aaron, Federal Equipment, Walter Equipment and Surplus Equipment sell used mixers based on lower price and immediate delivery. The buyer is responsible for for the condition of the equipment as well as the %
viability of the machine within the application. The selling price of used equipment is typically 50% to 75% of new. Based on inventory lists published on web sites, 95% of used low speed mixers have ribbon agitators. A Google search identifies 14 companies selling used ribbon blenders. A total of 876 used ribbon blenders were offered as stock mixers available for immediate sale (not mixers consigned for sale.) Using a conservative approach and assuming dealers turn equipment inventory once every five years, the sales of used mixers is around 876 / 5 = 150 each year. Conclusion: Used equipment dealers sell more mixers each year than Marion Mixers, Lowe Industries and our top three competitors combined.
Sales Regions (Marion Mixers)
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Sales Rep Territories
Sales Territory Analysis
This is an example of the target SIC industries that make up the 14 county greater Chicago MSA (Metropiliotan Area) and an overview of the SIC industries and product applications of mixers shipped in this territory. Marion Mixers SIC Industry List In 2011 the marketing department created a market SIC code list based on product applications associated with shipped mixers dating back 25 years. This list containson 268 unique SIC codes (SIC4+4) classification. They are broken down by core industry as follows: SIC Group
20 28 30 32
Industry Food Chemical Plastic & Rubber Mineral Total
Number of % to SIC Codes Total 137 52.49% 28 10.73% 10 3.83% 86 32.95% 261 100.00%
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Chicago MSA Territory The Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area (MAS) consists of the following counties:
County Chicago-Aurora-Joliet, IL Metropolitan Metropolitan Division Division Cook County DeKalb County DuPage County Grundy County Kane County Kendall County McHenry County Will County Gary, IN Metropolitan Division Jasper County Lake County Newton County Porter County Lake County-Keno County-Kenosha sha County, County, IL-WI Lake County Kenosha County
State
IL IL IL IL IL IL IL IL IN IN IN IN IL WI
Chicago MSA SIC Code Analysis
Using the Marion Mixers Sic Industry list to query the Chicago Ch icago MSA territory there are 1000 prospective companies in this territory broken down as follows:
% to Companies Industry Total 314 Food 31.46% 142 Chemical 14.02% 423 Plastic/Rubber 42.38% 121 Mineral 12.12% 1,000 Total 100.00%
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Drying Systems (Prospective Market Research) There are issues that apply to the sale of all dryers. First, you have to identify the the primary reason for drying. Many times, drying is a necessary ne cessary step in the processing of an ingredient for final product. For example, in the dry distillers grain market when it is necessary to get dried distillers distillers grains (DDG’s) to a suitable nutritional consistency as well at an ac ceptable solid with reduced moisture it is necessary to dry the feedstock. One must also weigh the added costs costs of drying against the added value of that action. For example, the cost to dry a ton of corn stover with conventional drying technologies can easily be $30-$60 per ton. If coal is selling selling for $40 per ton, it is not very lucrative to add the drying step. Dryers Dryers tend to be physically large. Most drying technologies are very old. Many are more than a hundred years old. Even the newer “super heated steam” dryers are based on German inventions from the 1800’s. Typical dryers found in the USA are large rotating units, ring dryers, d ryers, belt dryers, etc. Typically they are direct gas fired, which poses several problems:
1. The flame degrades the product, causes losses in protein, changes color of product, etc. )
2. Fires are commonplace. 3. Many dryers use high pressure steam as a heating medium. This requires certified certified boiler operators, liability insurance, air permitting, etc. 4. Most dryers have enormous swings swings in product quality. Often, there is virtually virtually no way to determine what the product looks like for 25-35 minutes until it comes out the other end. A lot of product is lost due to temperature swings, bad color, scorching, clumping, etc. 5. Large dryers are inflexible and do not respond well to production changes. 6. Thermal oxidizers are often required to treat noxious no xious components as they exit dryers. Thermal oxidizers are one of the biggest maintenance nightmares. They break often and there are steep fines for the resulting problems and they are extremely costly to run. 7. Depending on the application, inputs and intended outputs, various drying systems may have the potential to meet the cost-effective drying solutions for both small and large facility processors of bio-solids and other biomass feedstocks. For small-to-medium wastewater treatment plants the cyclonic drying system may be capable of meeting cost effective production requirements as well as provide a potentially new revenue stream in processing a Class A bio-solid co-product, i.e. fertilizer or fuel source source (briquettes/pellets) off setting processing expenses.
Operating Costs
Two standard metrics include: •
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Total connected horsepower and the energy cost compared to other fuel sources. The cost to dry one wet-ton per hour compared to other technologies and the cost to dry higher wet-ton levels per hour based on the target industry and production requirements.
The ability to demonstrate the drying process of a variety of feedstocks in a simulated production setting and to document and present empirical data to interested prospects is important. The list of materials that drying systems can process efficiently is broad – virtually anything that needs moisture removed. Market Plan Attributes The main strategy of a proposed drying system marketing plan is to make the best use of R&D, engineering and sales and marketing resources that may focus in thedr areas:
1. Research bio-solids & biomass drying markets 2. Identify commercially scalable projects 3. Form alliances with various organizations including a. Non-Government Organizations (NGO’s) 8
b. Academic & industry consultants c. Other commercial vendors d. Government agencies 4. Identify relevant funding opportunities Most biomass & bio-solids feedstock conversion ventures have these attributes*: Demand 1. Feedstock specifications & standards 2. Technology conversion efficiency & production costs 3. Price elasticity of customer Supply Structure Options 1. Broker/Dealer 2. Producer 3. Harvester/Collector 4. Transportation/Storage & Logistics 5. Processor 6. Business/Financial Service Provider Perceived Riskiness of Venture 1. Technology risk 2. Operational risk 3. Supply risk 4. Market risk 5. Price & competition risk 6. Contractual risk 7. Ownership structure & strength of parties 8. Policy risk 9. Regulatory risk 10. Funding & financial risk 11. Appropriate business model permission, from Dr. Dr. Timothy M. Baye, Professor, Professor, Business Business Development Development,, University of * By permission, Wisconsin Extension, Bio Economy & Bio-Energy Specialist
The top 2 industries to possibly persue include: 1. Alternative energy fuel source (Waste-to-energy, bio-solids & biomass feedstock conversion) 2. Waste by-product (organic fertilizer)
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The top 4 drying markets to consider pursuimg include: 1. Confined Animal Feed Operation (CAFO) Manure Processors 2. Wastewater Treatment Plant Bio-solids Processors 3. Biomass Feedstock (Agricultural and Industrial) Processors 4. Industrial wastes Other markets for feedstock sourcing include: 1. Combined Heat & Power (CHP) companies 2. Landfills including wastes with organics CAFOs Animal Feeding Operations (AFOs) are agricultural operations where animals are k ept and raised in confined situations. Concentrated Animal Feeding Operations (CAFOs) are AFOs that meet certain EPA criteria. CAFOs make up approximately ap proximately 15 percent of total AFOs. A small number of very large CAFOs predominate. Based on the USDA census of o f agriculture statistics and US EPA sector expertise there were an estimated 20,700 20 ,700 total CAFOs in 2008. Of that amount, 75% or 15,500 facilities might be subject to manure man ure discharge regulations and seek National Pollution Po llution Discharge Elimination System (NPDES) permits. pe rmits.
While there are many livestock types recorded and measured, five major categories of animal type (dairy cattle, beef cattle, swine, poultry pou ltry layers and poultry broilers) account for most of the manure. Of the estimated discharge of 15,500 15,5 00 facilities, approximately 8,300 large, major animal category facilities make up the available market. The current range is between 8,300 to 9,900 large facilities. The tables below show the change in herd size in milk cows and beef cattle. Our long term target market consists of those operations that are highlighted in yellow consisting of 500 head or more. Currently the type of operations that we have been talking to consist of herd sizes greater than 4,000 animals 9:/; <0=2> ?.,@76:0A2 B1 C:D, E@0F. +#G"$G#++8
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CAFO manure feedstock is a prime target market for potential drying systems. Access to recent new technology provides large CAFO facilities with an environmentally and economically effective solution for beneficial manure reuse, as well as volume and weight reductions of the manure. These reductions decrease transportation and application costs and aid the operator in conforming to the latest US EPA CAFO manure management rules and guidelines. This technology also helps to reduce nutrients from the waste stream, specifically nitrogen and phosphorous in over abundance as well as provide an organic fertilizer by-product. EPA Regions The concentration of large target market CAFOs are located in 25% of the country within states in US EPA Region 4, 6, 7, 8 and 9. The number one dairy CAFO state is California followed by Wisconsin in Region 5. The top swine CAFO states are Iowa and North Carolina respectively. Large cattle CAFOs have expanded to the central/southwestern regions of the U.S., where land is less expensive and populations are relatively sparse in regions of Nebraska, South Dakota, Kansas, Oklahoma, Texas, Colorado and Wyoming. Most broiler chicken and layer CAFOs are located in the southeastern states of region 4, specifically Alabama, Georgia and Arkansas.
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Some of the larger CAFO’s are using anaerobic digesters to process the bio-solids. Although a mature method in Europe, it is a growing market for livestock producers who manage manure. There are currently 154 larger CAFO’s to date that have anaerobic digesters as part of their manure management process. Bio-solids The term bio-solids refers to sewer sludge that has been treated to meet the regulatory requirements in the Code of Federal Regulations, Title 40 (Part 503) also known as the 503 Rule for land application. It generally refers to agricultural uses or land applications. The term “beneficial use” refers to biosolids that are applied to soils to take advantage of the nutrients and organic matter they contain. Biosolids may be recovered from a sewage or manure treatment process and used as a fertilizer or in ways other than the soil applications as in energy production. That may include pelletizing or briquetting as a fuel source for thermal heat combustion or gasification creating syngas.
Disposal refers to the disposition of solids in ways that do not take advantage of soil-enriching qualities – this includes incineration, land filling and surface d isposal. The US produces 7.2 million metric tons of “dry solids” annually. Currently, plants incinerate or landfill 45% of the biosolids and treat and land apply 49% leaving only 6% for other purposes such as energy production. We are interested in the beneficial use of bio-solids as a fuel source (alternative energy or fertilizer.) Bio-solids Quality The land application of sludge is regulated by the state which requires sludge to be treated before its use. There are two ways to treat sludge: pretreatment, which prevents pollutants such as PCBs and metals from entering the sewer drains; and treatment at the wastewater facility for organisms that cause disease. Sludge is classified as either Class A or Class B, depending on the type of treatment it has received. Class A sludge has benefited from both pretreatment and treatment at the wastewater facility. The pathogens in Class A biosolids cannot exceed certain levels set by the EPA.
Standards for Class B sludge are less stringent, and their use is therefore more regulated. A landowner who wishes to use Class B sludge as an alternative to conventional fertilizers must apply to the state governing agency to register the site. Among other items, the application requires information on the type of land, the amount of buffer zones, and the type of soil. The applicant must also provide information from the wastewater treatment facility on the type of pollutants and pathogens in the sludge, and calculations of nutrient needs for the crops. The use of Class B sludge on o n land has been criticized c riticized by the Center for Disease Control and the National Institute for Occupational Safety and Health. A land owner using Class A sludge does not have to register his land.
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Beneficial use of bio-solids is an extremely important issue. The a ntiquated practice of land applying class B bio-solids is under extreme scrutiny due to liability issues associated with the materials. The main challenge is finding a Class A solution that is competitive with land application. The cyclonic drying system meets all Class A Bio-solids pathogen and vector attraction reduction requirements. The liability of land applying Class B Bio-solids is virtually eliminated. Bio-solids Market Biosolids are generated by wastewater treatment facilities; either publicly owned treatment works (POTWs) or by facilities operated by federal agencies or private companies. The numbers include: •
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16,583 publicly owned wastewater treatment facilities in the US. 13,261 treat < 1MGD (million gallons per day of wastewater affluent) – considered minors. 3,322 treat > 1MGD and generate more than 92% of the total quantity of wastewater solids produced in the US – considered majors. 551 treat > 10 MGD A community population of 10K = approx. 1 MGD flow. Communities < 10K population are considered small communities by US EPA standards. 20 major waste water and storm water utility companies provide services to 70% of the US sewered population. There are over a dozen global manufacturers with private wastewater facilities servicing municipalities in the US. The 16,583 US publicly owned wastewater treatment facilities produce over 64 pounds of bio-solids per person, every year. The 13,261“minors” are in relatively small communities. co mmunities. They manage their wastewater solids in ways that are not necessarily nece ssarily represented by how “majors” manage them. For example, minor (
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store solids in wastewater or sludge lagoons that are only cleaned out every 5-20 years utilize the lowest-cost and least-hassle method for managing solids, such as land filling and/or transport unrelated solids to larger facilities for treatment.
These smaller facilities treat only 8% of the total flow (MGD) and use or dispose of the same small – or even lesser- percentage of solids. These solids are insignificant on national, regional "%
and state scales. Many likely become part of larger facilities’ solids production, but most cannot be easily counted on a state or national scale and these may not be included in the data. Energy Opportunities in Wastewater and Bio-solids Today, wastewater treatment facilities can generate some energy by producing a dewatered or dried product to burn at a power generating station or by anaerobic digestion and generation of biogas (methane). Most large wastewater treatment plants have some type of heat energy recovery, either from combined heat and power cogeneration or incineration processes.
As of 2004, 1006 public p ublic wastewater facilities used anaerobic digesters (digestion without air) to process biosolids, producing methane gas. Nineteen percent of wastewater plants with anaerobic digesters generate power with digester gas (biogas). The biogas bioga s is a source of heat or a source of fuel for direct-drive combustion engines to make steam in boilers, or in plants that can sell it. The other 81% of wastewater facilities waste the biogas by using the common practice of o f flaring or burning their emission without heat or energy capture. Financial Benefits Estimated ongoing financial benefits from access of new drying technologies include: •
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Reduced power consumption because of high efficiency drying compared to thermal dryers. Reduced storage areas because of volume reduction. Reduced removal cost from site because of weight reduction. Emissions-friendly – Cap & Trade (emissions trading) solution, potentially valuable in the future. Reduced maintenance and repair costs through protection of exposed surfaces of plant and equipment from moisture and hydrogen sulfide corrosion. Ease of handling and transport compared to biosolids cakes. Highly energy-efficient; only energy required to operate op erate the system is for the blowers and conveying equipment. Safety - There are no fire hazards. No air permitting The design we offer meets EPA guideline alternatives for the 503 standard for Class A material. This means that the pathogens or “bugs” are dead and the material is is safe to transport or land apply. It also means other pests such as birds or rats won’t want to eat the material. Conversely, a Class B material is a considered hazardous material by the EPA. End use by-product production system
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Opportunities "J Urgent need due to aging treatment facilities, and stricter groundwater requirements. #J Publically-owned municipal waste treatment plant equipment and services is a $55 billion
industry. $J Commercially-owned waste treatment facilities is a $7.3 billion plant equipment and
services business with 5,333 facilities of which the 50 largest companies control 65% of the business. Strategic Marketing Plan "J Identify by regional EPA geography, waste water treatment facilities >1MGD. #J Identify by regional EPA geography large CAFO facilities > 500 head facilities. $J Create alliance partnerships to foster technology and penetrate markets. Partners may
include government agencies, NGO’s, academic acad emic consultants, engineering firms, etc. %J Resource state & federal sources for grants and credits involving bio-solids and biomass
waste-to-energy projects. Some funded grant programs include: •
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Grow Iowa Financial Assistance Program (GIVFAP). Projects are focused on job creation and retention. A relevant program is the Value Added Agriculture and Entrepreneurial program. Iowa Department of Economic Development (IDED) Demonstration Fund. USDA Rural Development Energy Program – Business Research and Development Program Rural Energy for America (REAP) program for renewable energy ene rgy systems (RES) National Resource Conservation Services (NRCS) – Bio-solids/Biomass feasibility program. Farm Pilot Project Coordination, Inc. (FPPC) – Demonstration Demon stration Project Funding.
Other Regional agencies we are currently c urrently working with include: Agriculture Utilization Research Institute (AURI) in Minnesota, the Biomass Energy Conversion (BECON) Facility which is part of the Iowa Energy Center and Focus on Energy in Wisconsin. even ts and bio-solids and biomass events to &J Coordinate with our sales team relevant events facilitate training.
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'J Author and publish case studies and white papers on projects involving our mixing and
drying technologies for relevant trade pub print and electronic media channels. (J Conduct a thorough PR campaign and purchase relevant keywords for search directory
marketing. )J Explore the use of planning tools, i.e. The EPA Waste-to-Energy (WTE) Geographic
Information System (GIS) tool, The Water Environmental Research Federation (WERF) Infrastructure Asset Management tool and the IADNR Interactive Mapping tool. 8J Work with our existing industrial processing customer base to identify prospective bio-
solid and biomass ventures. Social Benefits There are also many social and political issues associated with CAFO’s. Environmental concerns such as groundwater contamination from nutrients, air pollution, declining property values located near CAFOs, and taxpayer taxpa yer farm subsidies. Certain legislated subsidies provide the capital for the manure management infrastructure for CAFOs. Government funding in the way of grants and loans from the USDA, EPA and DOE provide capital for projects projects affecting CAFOs. This activity positions our company as a solution provider for many of these issues.
The need to come up with alternative energy sources other than fossil fuels has driven the technology, R&D and investment dollars behind renewable fuel sources. Development in this area, which was started over a decade ago, is now coming into fruition. Liquid fuels for transportation and other fuel types derived from renewable cellulosic and lignocellulosic feedstocks have now become viable, commercially processed liquid fuels such as bioethanol and biodiesel processing. Alternative Energy (Renewable Fuels) Between 2001 and 2007, U.S. fuel ethanol production capacity grew 220 percent from 1.9 billion to 6.1 billion gallons. Each bushel of corn yields 2.8 gallons of ethanol and 17 pounds of dried distillers grains (DDG) and a thick, heavy liquid called soluble or syrup. In most cases the soluble are sprayed back onto the distillers grains and dried. However, more recently, both the liquid and dry co-products have garnered attention as valuable products individually.
High in energy value at over 8,400 Btu per pound, the distillers grains are a valued fuel feedstock. They can be co-fired with nonrenewable fuels like coal to help reduce emissions or mixed into solid fuel pellets. Other residues from agricultural, forest, animal and municipal wastes are one source of inexpensive sugars for cellulosic ethanol production. Removing different forms of water from organic matter proves to be the most difficult and expensive part of processing waste organic matter into useful products. As energy costs and "(
labor costs increase, the efficient processing of these organic raw materials becomes more important. Additionally, present large scale agricultural practices fail to achieve long term and sustainable soil health. Soil, which provides the nutrients required to grow healthy crops on which we depend, is quickly depleted by most modern farming systems. In attempts to industrialize and scale-up farming practices, which include the planting of a rapid succession of nutrient sapping crops that cannot replenish the soil, nature’s replenishing processes are bypassed, To supplement or supplant nature, farmers must turn to industrial sources to provide sufficient quantities of fertilizers to keep the soil infused with the required nutrients and vital organic materials. As fuel costs rise and clean burning sources of renewable resources become more difficult to obtain, a recycled material with potential use as a combustion heat source is needed. Furthermore, there is need to economically produce these essential nutrients or organic raw materials in a form readily available for use in a feed, fertilizer, or fuel, resulting in more commercially viable animal and plant food, and energy source.
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Shift towards newer online tactics: content marketing, white pa pers, social media and search engine marketing.
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We are able to produce more quality marketing with less expense. Number of leads up; Cost of leads down; Quality is up.
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Historically, 80% of sales came from repeat customers and 20% 2 0% were new. Now 44% of of our sales are from new customer
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Proposed Channel Allocation Expense Budget
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Appendices Target Industries PLASTICS Description
Pellets and powder, pre and post compounding PVC resins
Requirements
Cleanliness between batches Batch blending of powders for formulation Batches accumulation for color consistency Continuous cooling for PVC compounding
Customers
Formulation Compounding
Small number of large companies GE, Dupont Large number of mid sized companies RTP, LNP
Market Size Size
$5.0 M
Competitors
Company Market Share Marion Mixers 15% Scott Equipment 20% Henschel 25% Littleford 10% American Process 10% Others 20%
Focus Colors PVC PVC PVC Colors Colors
Trends ! ! !
Price of crude oil effects cost of plastics. Pacific rim manufacturing of plastics is on a rise. Recycling industry will become a bigger portion of this market.
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CONSTRUCTION Description
Mastics, glue, adhesive, insulation, glass, paints, pavement markings – semi-liquid
Requirements
75% batch blending with jacketed ribbon or paddle 25% continuous blending with semi-cylindrical trough Clean out between batches Liquid tight seals Durability of equipment is a must
Customers
Large companies USG, National Gypsum, 3M Engineering specifies, purchasing group buys
Market Size Size
$4.0 M
Competitors
Company Market Share Marion Mixers 20% Scott Equipment 30% Ross 30% Munson 5% Others 15%
Focus Gypsum All Adhesives Gypsum All
Trends ! ! ! !
Interest rates drive construction usage Regional plants constructed to reduce freight costs. World production will increase within regional production plants. Glues/mastics are produced in north-eastern states
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SOAP/DETERGENTS Description
Dry granular detergent with liquid surfactants
Requirements
All batch blending 30 to 130 cu. ft. capacity Durability of equipment is a must Stainless and carbon steel
Customers
Small to mid sized companies Unsophisticated design requirements 3-4 companies per major US city
Market Size Size
$2.0 M
Competitors
Company Market Share Marion Mixers 10% Scott Equipment 20% Ross 10% Munson 10% Davis 5% Kelly Duplex 15 Others 30%
Trends ! ! ! !
Trend towards liquid detergents rather than powders Powder growth rate linked to size of population Large number of users Customers are regionally located around major US cities
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DAIRY Description
Cheese, milk, dairy supplement, powdered milk
Requirements
USDA inspected 3A sanitary WDA (Wisconsin dairy) Clean out between batches Liquid tight seals
Customers
Medium to large companies Knowledgeable customer base Third part inspections of equipment
Market Size Size
$0.5 M
Competitors
Company Market Share Marion Mixers 10% American Process 25 Ross 20% AIM 10% Others 35%
Trends ! ! ! !
Industry is government regulated Very little change in industry Heavily supplied by local SS shops Growth rate tied to population
#%
FERTILIZER Description
High volume, granular, nitrogen based ingredients
Requirements
Fast cycle times, liquid additions Carbon & stainless for corrosion Size reduction held to minimum
Customers
Medium sized regional locations Scotts, Percell, Andersons are premier accounts Unsophisticated customers Typically reactionary to business trends
Market Size Size
$2.0 M
Competitors
Company Market Share Marion Mixers 0% Scott Equipment ??% Munson ??% Kelly Duplex ??% Hayes and Stoltz ??% Others ??%
Trends ! ! ! !
Drum mixers doing most of business Growth follows agriculture market Industry is consolidating Home improvement market is new growth area
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AGRICULTURE
Ground feed, grain, pet food, mineral
Description Requirements
Feed – Low cost with no added features Pet food – sanitary at low cost Reliability – generally good customers Ribbon style agitator is standard Clean-out between batches Customers
Small to Medium sized regional locations
Market Size Size
$1.0 M
Competitors
Company Market Share Marion Mixers 5% Scott Equipment 25% Munson 10% Kelly Duplex 15% Hayes and Stoltz 30% Others 15%
Trends ! ! !
! ! !
Large existing Marion Mixers customer base Large potential for replacement parts Industry is in a consolidation mode with large low cost, ribbon blenders gaining the business. Contract feed producer processing own grain for animal factories Poultry market is a growing industry in export markets May be good South American and Central America industry
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PHARMECUETICAL Description
Granulations prior to tabulation (Tumms, nutritional supplements)
Requirements
Cleaning between batches Ultra tight quality controls between batches Mfg protocol that stays the same from lab to production Additions done by hand – very controlled Materials/finished are more defined
Customers
Fortune 500 companies Engineering firms are involved in the design Knowledgeable customer base Third part inspections of equipment
Market Size Size
$3.0M
Competitors
Company Marion Mixers Patterson Kelly Gemco Others
Market Share 2% 70 10% 18%
Trends ! ! ! ! !
Traditionally a V-Cone market Industry is growing with maturing baby boomers Generic drugs the growth trend-may farm out to smaller guys USDA approval will continue to be required USDA pipeline not full
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CHEMICAL Description
Granular and power processing
Requirements
Cleaning between batches Heat and cooling – jacketed High end stainless steel – 316 Corrosion resistance Service life on seals
Customers
Fortune 500 companies - located on gulf & east coast Old production facilities Engineering firms are involved in the design (bid price, spec. evaluation, paperwork) Knowledgeable customer base Third part inspections of equipment
Market Size Size
$4.0 M
Competitors
Company Market Share Marion Mixers 15% Scott Equipment 15 American Process 15% Littleford 30% Others 25%
Trends ! ! ! ! !
Smaller companies are being acquired by large and foreign foreign companies Sometimes the customer needs exceed MM capabilities Chemical engineering is slowing down Regulations have moved manufacturing off shore Specified by engineering firms
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BAKERY Description
Producers of blended bakery goods Generally flour and yeast based
Requirements
Equipment must be suitable for cleaning between batches Choppers for addition of shortening and minors CO2 jacketed for cooling Consistency of end product Continuous welds - no cracks - stainless Condensation control
Customers
Large to Fortune 500 companies Regional market locations – 1 plant to every 4 states Some national accounts World market for super large companies
Market Size Size
$3.0 M
Competitors
Company Market Share Marion Mixers 20% American Process 50 Scott 5% Littleford 5% Hayes Stoltz 3% Davis 2% Others 15%
Trends
Retail sales at big box stores has changed chang ed mfg to small regions 2-3% growth corresponds with population More preprocessed ingredients or meals Outsourcing toll packaging due to fixed costs, no labor concerns Advanced packaging technology driving change in industry. Big companies merging into larger companies Chopper was key equipment to MM getting into this market
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FOOD Description
Dry ingredients, chocolate, sauce, drink mixes, coffee and candy Anything not dairy, meat or bakery
Requirements
Equipment must be suitable for cleaning between batches All welded inside and out Choppers for addition of shortening and minors Versatile – many uses in one design d esign Heating/cooling
Customers
Small/medium companies = 85% Large companies = 15% Regional market locations Some national accounts World market for super large companies
Market Size Size
$4.5M
Competitors
Company Market Share Marion Mixers 20% American Process 20 Scott 15% Ross 10% AIM 6% Davis 4% Others 25%
Trends
Potential in every city in America America - People need to eat! Localized markets Internet can help change the buying Little customers Usually work direct with owner Pass business on to 2nd generation Sell to regional stores Big customers Usually buy through systems houses Engineering people involved Ongoing consolidation to toll blenders
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GROUT Description
Dry cement based mixes with colors and additives
Requirements
Equipment must be suitable for cleaning between batches Durability and dependability (AR liners, Chrome blades) Rapid cycle times (Drop bottom, surge hopper) 40# palletized bagged product, not in bulk (weigh hopper) Not high tech process, usually gravity fed
Customers
Small/medium companies Large quantity of customers Regionally based to reduce freight costs co sts
Market Size Size
$2.0M
Competitors
Company Marion Mixers Scott Kelly Duplex Others
Market Share 15% 15% 15 55%
Trends
Industry trend is growing Market is interest rate and labor rate sensitive Residential / commercial construction industries are end users Tile usage in homes is going up Box stores selling home improvement
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RECYCLED PRODUCTS Description
Colored wood mulch, shredded plastic, ground glass, composting
Requirements
Durability and dependability (AR liners, Chrome blades) Typically continuous applications Not high tech process, usually gravity fed Often liquid additives
Customers
Small/medium companies Large quantity of customers Regionally based to reduce freight costs co sts
Market Size Size
$3.0M
Competitors
Company Marion Mixers Scott Kelly Duplex Amerimulch Others
Trends
Industry trend is growing Market is interest rate and labor rate sensitive Residential / commercial construction industries are end users Tile usage in homes is going up Box stores selling home improvement
Market Share 70% 5% 5% 10% 10%
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MARCOMM (Marketing Communications) Brochure and Cut Sheet samples
Marion Mixers Brochure (Front, Back and Inside 1/3 pg)
Marion Mixers Brochure (Inside tri-fold)
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Marion Mixers (Component Cut Sheets) – Troughs, Accessories, Acce ssories, Agitators, Covers & Inlets, Discharge Valves, Power Drive Trains, Main Shaft Seals
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Lowe Sanitary Equipment Brochure (Cover)
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Lowe Sanitary Equipment (Front, Back and Inside 1/3 pg)
Marion Mixers Brochure (Inside tri-fold)
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FPPC – Farm Pilot Project Coordination Coordination - Brochure (front, back and inside inside pages)
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