Tank Capacity Crucial
Capacity and longevity continue to be key sales points as tank and containment manufacturers experience another brisk year. A few products stand out. First off, both steel and fiberglass are pretty hot with buyers, though fiberglass products might have the edge. Both tanks are getting larger in capacity and more specialized in what they can store, says Enviropac President Dennis Neal – who also reports, “this will be a record year in sales for us.”
Tank sales continue to be strong for Precision Tank and Equipment (PT&E) as well, with a noticeable shift from mild steel to fiberglass on the company’s large storage tanks – and growing demand for ever larger nurse tanks, says Gary Ruff, PT&E regional sales manager. The double whammy is creating backlogs in production, with no change in workload for the foreseeable future.
Manufacturers we spoke with saw keener interest than ever before in their products at summer shows such as MAGIE. “Our customers themselves are anticipating another strong year in 2014 with no slowdown in the immediate future,” explains Tom Munro with Mid-State Tank.
Another reason for tank demand is that farmers are starting to put in containment and storage facilities the size that were put in dealerships 10 or 15 years ago, explains Neal. “There is a new demand out there for on farm storage and containment,” he says. “And farmers in most areas have to meet the same containment requirements that the ag dealer has to with proper containment facilities.”
Chris Brooks, president of The Heartland Tank Companies, reports customers are building more double wall liquid storage tanks. Why? He believes a double wall tank with two bottoms with leak detection is the “purest form of containment” and is accepted everywhere as a viable means of containment.
In addition, he sees more customers with tanks in approved containment systems also installing PVC liners or internal coatings for corrosion protection. They’re trying to preserve their capital assets for as long as possible.
Some Enviropac customers – who own tanks ranging from 10,000 gallons to over 1 million gallons – are purchasing Enviro-Coat Rust Resister to help maintain them. Interior tank protection is important as well, especially with the corrosive nature of many of the products being stored.
“Every five years large tanks are required to have API653 inspections, and Enviro-Coat is protecting these tanks and helping provide good inspection reports,” says Neal.
Fortunately, materials costs for tanks have been relatively flat for some time – giving customers some relief from increasing prices on other commodities, says Ruff. But he notes that PT&E’s increasing trade area and fuel costs “raise freight costs to uncomfortable levels as we get to outlying states.”
The Rush For Tanks
“Many of our customers are concerned about getting enough fertilizer to meet their needs, so they need to buy early – and be able to take the product and store it,” Heartland’s Brooks explains. He says his firm is still very busy with four to seven month backlogs, and bookings for new large tanks and internal liners are already strong for 2014.
Indeed. With the volatility in all commodity prices, dealers and growers understand with the proper storage and containment, they can take much better control of their operating costs, says Neal. In fact, he has found buyers continue to get “more knowledgeable and forward-thinking than ever,” looking beyond a current year’s build. “They’re making certain what they do fits with their long term plans,” he notes.
Brooks warns buyers to plan for at least a nine-month window from initial order to completion of a tank project.
“One of biggest challenge we face is timing,” agrees Neal. Dealers are so busy with spring and summer applications and by the time they can set down and make decisions. Delivery lead time is quite long. This may be another reason that the better dealers are becoming more forward thinkers.”
PT&E’s Ruff is actually seeing customers order earlier than normal to get their deliveries in a timely manner. “We encourage this, as we fully expect lead times on production to increase as we get into the busier times of the year,” he says.
While raw material costs have not been a problem for steel users, Heartland’s Brooks does raise a new concern about quality. “We are seeing a lot more foreign steel entering the marketplace, and many companies are buying this material due to pricing discounts.” He warns that not all material is the same and much of the foreign product does not have mill certifications.
Along that line, dealers should be sure their tanks are built to API 650 Specifications. “Ask for mill certification from your tank vendor and originals of x-ray film and x-ray reports,” he suggests.
The Containment Factor
Neal has noticed the dealers are very conscious about taking care of their facilities and are wanting to update their containment. Many liner systems are going in over cracked concrete. Neal sells systems designed by Hunter Agri-Sales. The firm’s flagship product, the Plia-Dike is constructed with tough, pre-form poly wall panels that will not rust, crack or corrode. Its polyethylene and synthetic rubber construction is unaffected by freeze and thaw cycles and provides resistance to many chemicals.
Ken Hunter, company president, notes that a problem for all diking systems is what to do with rainwater. His solution: Plia-Dike components include an optional rain and spill capture elimination sump and dry sump spillage alert system.
International Tank Service recommends that customers start out with a concrete foundation, in contrast to the earthen foundations or gravel and sand pads more commonly used at fertilizer businesses. These heavy duty foundations can come in two forms: a concrete slab above grade or a concrete ringwall which is then filled inside with sand. A tank is built on top.
The goal is to get fertilizer tanks up, out of the water. “We’re seeing where some of these fertilizer tanks that have been in business 15-20 years, the undersides are corroding and rusting out because they’re laying in water after two or three good rains,” describes Butch Kirk, ITS president. Dike walls flood with water and that water runs under tanks. After several years, dealers have to put a steel floor in.
Kirk says that to make a sale these days, his staff has to be diligent, answer lots of questions, do budget plans and help customers draw up business plans and models. Currently, ITS has developed “a fair amount” of work orders, but potential customers have not released the orders yet. “It’s still a tough economy, but there’s still work out there,” Kirk has found.
Hunter would agree that selling systems lately can be a struggle. In part, he blames Washington, DC, where Congress has been so slow to approve farm programs. In some cases, growers are facing uncertain finances and are stalling buying decisions. “They don’t know what to do, so they do nothing,” observes Hunter. The economic effect ripples thoughout ag.
J.C. Ramsdell Enviro Services uses wood – suitable for containment of corrosive products such as liquid fertilizer and pesticides – in its Wood-Guard secondary containment systems. They’re constructed of No. 1 lumber that is custom treated for ground contact and potential decay, says Christina Schmidt. “The lumber we use is special ordered direct from the mill to ensure that it is treated to our requirements,” she adds. “The systems never crack and can be installed in days.”