ibmeubu
Registered Users
Posts:1
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| 12/06/2007 10:54 AM |
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I am an MBA student working on a business plan to open a SIPs manufacturing plant. I am having trouble finding the start-up costs for opening a new plant. I am also looking for information minimum efficient levels of output.
Is there anyone out there who can give me advice on where to look? or information based on their experience? I would also welcome any advice about opening a plant and starting a SIP manufacturing business.
At this point the project is purely academic, but I am happy to share the results of our market research and strategic planning if you are interested.
Thanks |
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isogroup
Registered Users
Posts:12
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isogroup
Registered Users
Posts:12
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| 12/07/2007 7:56 AM |
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this was from a previous forum,
Let's start at the begining. I want to start a panel bussiness. To start I need a building that is 60 wide by 300' long minamum and 20' high ceilings. I need 60' x 24' for foam storage, I need 60' x 30' for the laminating equipment. I will need 60' x 90' for the presses. I will need 60' x 90' for OSB storage. The balance of the building will be used for completed panels ready to ship. Note* this would be large enough to store only one job inside. I have to heat the building to minamum of 60 degree ambient temperature the entire year. Based on current lease rates for commercial space this will cost about $378,000.00 per year. The utilities conservatively would be about $6,000.00 per year. The equipment for mass producing the panels will run about 500,000.00.
Ok lets bring in the OSB, you can only order jumbo panels in full truck loads so you will need a very large fork lift to handel the unloading of the large bundles and the loading of completed panels. This fork lift I will lease for $1200.00 per month or $14,400.00 a year.
Now I have my building in place and I do not want to be a fly by night operation I want to produce stamped third party certified panels. First you will need to do full scale distructive testing at an approved testing agency. Lets start with the transverse loading test. We need to provide the lab with three panels for every test we want to perform. Let's say we are going to test 4 1/2" x 4' wide x 8'-10'-12'-14'-16'-18'-20'-22'-24' long panels with spline joints, multiply that times 3 so you will need 27 panels. Each test for each size we will say for coversation sake cost's $3,000.00 times 9 different sizes equals $27,000.00. Now that is only one thickness and that is only 4' wide. I want to test all 5 thickness of panels I am going to produce and I also want to test my panels with different splines such as double 2x splines and engineered lumber. Ok thats 5 thickness times $27,000.00 equals $135,000.00 times two because I also want to test with structural splines that comes up to $270,000.00. Now I still have my Axial, Raking Shear, 15 Minute Fire Test and my 1 Hour fire test. I will need to provide all the panels for them also. For this forum lets say the rest of the testing will run $230,000.00 for a grand total on testing of $500,000.00. Keep in mind if you make any changes in the skins or the way you spline your panels you will need to redo these tests again.
Now we have our testing done so we will submit this information to ICCES for approval and acceptance. After about 9 months of going back and forth with them about specific details they have issued us a NER# Guess what, they do not do it for free. Lets say that this number will be $50,000.00. Then you know what they have the nerve to do, charge you a fee every year to maintain that number. Lets say that is $5,000.00
Keep in mind we have not sold any panels yet. Now we have to contract with a Independant Third Party Testing Agency. Lets say their yearly contract will run about $5,000.00.Now we can sell Stamped Code Approved Panels.
Ok lets get a couple employees and some insurance to get the line up and running. Employees lets say three production people, one office person and one salesmen. With insurance per year that will be, lets say $250,000.00
Ok now we can produce our own panels that are code recognized and third party certified.
Cash out of pocket for the first year without producing 1 square foot of panel is $1,208,000.00.
Now our aticipated production for the year will be 500,000 square foot of panel. That equates to $2.42 cents a square foot you must add to your material costs just to brake even then you would like to make at least a 10% profit on you panels, so we will add $.24 a square foot. Now we will add in the material costs as per your figures, $.97 square foot for a 5 1/2" thick core panel that comes up to $3.63 square foot.
After the first year you can back out about $.50 square foot because you do not have any additional testing costs until you want to make changes. Although you want to keep up with the competition, so you will need to do some testing on a regular basis. You will not have your equipment costs after the first year but that money will be rededicted to maintenance, advertising, trade shows, home shows, etc.
I hope this helps you understand how a panel company operates and why the square foot price is what it is. |
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olpjeb
Registered Users
Posts:55
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| 12/07/2007 12:45 PM |
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Isogroup -
For an EPS panel, yes the footprint is probably that large. But I visited a urethane manufacturer (my SIP supplier for my home), and his physical footprint was about 1/2 of your example. Why? Because your're using a chemical reaction to make polyurethane foam. You only need enough space to store a polyol and isocyanate tank, along with the injection system and hydraulic table. |
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Gsfrey
Registered Users
Posts:60
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| 12/10/2007 3:05 PM |
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I need the name of any testing entity in the Southwest for the tests listed in ISOgroup's post. I question the costs, they seem a little high, but the testing costs are what really scare me. Talk about no ROI. I know it to be necessary, but that is a cost attached to every panel.
Thanks,
Greg |
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Greg Freyermuth
915-256-7563, Phone
GregFreyermuth@elp.rr.com, E-Mail |
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drogers
Registered Users
Posts:68
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| 12/11/2007 3:08 PM |
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| If you are getting an MBA, and do not know how to use reference materials better than what you are doing, then expect to be setup early in your career and made to look like a fool. I realize it is nearing the end of your semester, but are you gaining anything from this approach? |
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homebuilds
Registered Users
Posts:1
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| 06/11/2008 7:15 PM |
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Do you get any positive response from your questions or research from other soureces. We are looking to setup a sip factory and wondered if you could share your findings with me. It will be very much appreciated.
Thanks
Tanwa
Homebuilds@yahoo.co.uk |
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PanelCrafters
Registered Users
Posts:1330
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| 06/11/2008 7:39 PM |
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Posted By ibmeubu on 12/06/2007 10:54 AM
I am an MBA student working on a business plan to open a SIPs manufacturing plant. I am having trouble finding the start-up costs for opening a new plant. I am also looking for information minimum efficient levels of output.
Is there anyone out there who can give me advice on where to look? or information based on their experience? I would also welcome any advice about opening a plant and starting a SIP manufacturing business.
Just search this forum. There are threads in which the information that you desire is discussed. |
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....jc
If you're not building with OSB SIPS(or ICF's), why are you building? |
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NWP
Registered Users
Posts:53
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| 06/11/2008 9:44 PM |
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Wow!! lot of negativity in this thread, thought hell had frozen over. You really need to look at what your sale are going to be for the first 5 years and decided what you need in size. many people manage with much less space than that and do anywhere from 2-4 million. the NAHB is a good resource for testing and 3 party inspection, it is who i use. before going big be sure be real about your plans. Most startups fail in the firt year and definitely in 5 if not planned well. Testing is not that expensive and for the most part unless you have generated the business you are only going ot work on one or two jons at a time. we currently use about 25k sf and do fine with that. YOU have to manage and manage well. it will take you time to get big don't ever think that it will happen over night becasue it won't and unless you are truly dedicated it is a long rode. you will know when you arrive, then you can look back and say damn we did it.
Good luck iwth your research.
Ralph |
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KirkleyBurrows
Registered Users
Posts:2
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| 06/16/2008 10:19 PM |
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I wish you the best in your quest for info. I am interested in a SIPs factory and would like you to share your findings with me please. It will be greatly appreciated.
Kirkley Burrows
kirkleyburrows@yahoo.com |
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