Do you want to start an asphalt plant business and want to know the cost? If YES, here is an estimated cost breakdown to build and open an asphalt plant. Starting or selecting an asphalt plant to buy or build should be a careful process. You need to take your time to analyze your needs and requirements. An asphalt plant may cost less initially but if the fuel efficiency is not ideal or it is not capable of producing enough tons per hour, then all the efforts are in vain.
In this business, a well made decision will make sure that the return on investment is taken care of in less than 5 years. If you are new to the business, this may seem a bit much because you have invested a lot of money and it takes time to understand the basics of the business. If you are into paving and now own an asphalt mixing plant then you can see the ROI quickly. It will be very easy and fast to see your money growing.
Estimated Cost Breakdown for Building an Asphalt Plant
If you have decided to start or buy your own Asphalt Plant, then have it in mind that your startup cost will depend on a lot more important decisions like AC plant type, style, size, brand and budget. Even after you are done with these choices, more issues also come up, such as AC tank size, storage silo size, number of cold feed bins, type of pollution controls and on and on and on… Below are few factors that affect the exact cost of building an asphalt plant.
Table of Content
1. Type of Plant
There are two types of Asphalt Plants. Drum Mix and Batch. Notably, a batch plant is the best choice for an operation where the plant will be called upon to make various blend mixes in the same operational ‘run’, or if the plant will be doing a lot of starting and stopping in the course of the day.
A drum plant is the ideal plant for a company not concerned with switching back and forth to various mixes and foresees the luxury of long production runs. Another consideration is the fact that batch plants utilize many more moving parts than drum plants, therefore they are more expensive per ton to purchase and operate and year end maintenance costs are higher.
2. Styles of the Plant
Asphalt Plants are either portable or stationary. A stationary plant may be the best choice in some situations, but a portable plant will offer flexibility in terms of location and permitting requirements. Note that in some areas where jobs are considerable distances apart, a portable plant would be the best choice.
Some markets experience minimal growth and have a small population density, while others may see workloads shift from one area to another due to seasonal factors. A portable plant would be the most sensible in these types of areas as well. Also, it’s typically easier to get a permit for a portable plant’s location than for a stationary unit. To avoid any surprises down the road, explore restrictions and permitting fees early in the process.
Have it in mind that portable plants cost substantially more than their stationary brethren. Howbeit, if you only need to move your plant once every few years then it is possible that the cost of moving the plant is considerably less than the cost of portability on the original order.
But if the plan is to move your plants several times a year, and then you have to purchase a portable facility. When looking at these units it is strongly recommended that a self-erect silo/drag combination be considered. In the Northwest a crane to set the silo and drag conveyor can easily cost in excess of $5,000 per move.
3. Size of the Plant
How much production do you need? This can be very difficult to answer. New entrants into this business, without a track record for mix production, must analyze their market and decide from there. If you feel that you can sell 3,000 tons per day, 10% of the time and 1,000 tons per day the rest of the production season, then it’s advisable that you settle for 200 ton per hour plant, which is more appropriate and more expensive than 400tph unit.
In the same vein, it’s difficult to justify the multi-million dollar cost of a new 350tph plant if you plan on making 40,000 tons a year, regardless of how fast you can make it. Note that plant sizing is a function of market demand. Try not to size the plant so small that in a year or so you will be looking to upgrade to a bigger facility. In addition, don’t go so big that the thing is idle for long periods of time.
Generally, a plant is most efficient when it is running at about 80% of its rated capacity, and the things last longer when they are not stopped and restarted constantly. Also note that a smaller AC plant with lots of storage capacity can often turn out as much mix on a given paving day, because it might not have to stop while waiting for trucks, while the larger plant fills its silo in a hurry and then must wait for the silo level to go down.
4. Plant Configuration
There are many other factors other than price and size that you will need to consider when analyzing the cost of building your plant. Some of these things are:
AC Tank Size
How far away from your proposed plant site is the nearest oil supplier? How long does it take to lap a truck from your plant to the refinery and back? These are questions that need to be answered before you can decide on oil storage capacity. Note that a 300tph plant will use about 17.4 tons of oil per hour at a mix design percentage of 5.8%. A 30,000 gallon tank holds roughly 116.7 tons of oil at 7.78ppg (approximate weight of PGA-58-22 @ 300degrees).
Note that since you cannot pull all of the oil out of the tank because they are set-up so that the heaters stay immersed in oil (electric models), it is assumed that you can only use 114 tons of liquid. At 17.4 tons per hour the plant can run approximately 6.5 hours on the oil available. To stay even with the rate of consumption the plant will need to get a 35ton load of oil every 2 hours. If this is not possible, then you will have to increase the storage capacity.
Hot Mix Storage
Bigger silos generally mean less truck turn-around time in the yard, which also means more money on the bottom line. A large capacity silo can also help a smaller plant perform with the big boys as far as mix shipped per hour, since when the trucks are gone the plant can run longer, refilling the silo.
If you start the plant early enough in the morning to have the silo full when the first truck loads, it will help the plant stay ahead of the trucking for several hours. In general, it’s advisable you get as much storage as you can afford.
You have to consider if your state use mixes that require the aggregates to be broken down into more than one or two stockpiles, such as ¾”-1/2”, ½”-1/4”, ¼”-10 and 10-0”? If so you will need to make sure your new plant accommodates all the materials you will need to be using. If you have to blend sand into your mixes you could find that you need 5 feed bins, and that is extra expenses on your start up cost.
Nonetheless, coupled with all these factors and decisions, the cost of building an asphalt plant ranges from $500,000 to $4 million. An asphalt plant is a serious investment for any individual or company, small or large. While it is necessary to compare plant prices, don’t forget to also look at operating costs and production capacities.
Other Factors to Consider in the Asphalt Plant Business
Note that a first-time buyer will make the mistake of going with the lower price machine. Have it in mind that price is indeed a crucial factor but it is not the only factor. Cost of an asphalt plant should not overlook other factors and it should not affect the buying decision.
Perhaps the first factor that should be looked into is the market size. Not only should you determine the total amount of asphalt being used, but potential customers who could drive the demand up should also be analyzed.
You are advised to check the availability of aggregate and ensure that the source will be able to meet needed supplies through peak paving months. Because large asphalt producers often consume the bulk of aggregate supplies, a new asphalt producer may need to look for a nearby aggregate source.
In addition, you will also have to take your time to look at contracts awarded in the area. Find out the number and sizes of area paving companies. Analyze what percentage of bids a new asphalt plant would be able to supply in the years to come.
Once you have researched and decided that the market can support another asphalt producer, the next step will be to explore property locations. Have it in mind that rules and regulations differ greatly from one area to the next, with permitting rules and fees varying from state to state. Finally, note that acquiring a permit can take six to 12 months, so plan ahead and start the process early.
Environmental issues might also come into play when applying for a permit. On a positive note, the Environmental Protection Agency announced in 2002 that asphalt plants were no longer on its list of industries considered to be major sources of hazardous air pollution.
Modern plants burn much cleaner than older plants. Also, asphalt recycling has increased since the 1970s, with asphalt now being the most recycled road material in America. But be aware that in some areas it may still be difficult to get a permit for certain plant designs.
It is indeed very hard to analyze and pin point the exact cost of starting or building an asphalt plant due to the factors above. However, in general, when looking to build or buy an asphalt plant, try to find out as much information as possible about the particular plant if it catches your eye. Don’t be afraid to ask questions. Most brokers are willing to help you. If they aren’t, find another plant.