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Uzelac Rotary Drying Systems to Process Layer Manure

05/03/2021

Application of Uzelac Manure Drying Systems.

 

Uzelac Industries based in Greendale, WI. has developed considerable expertise in the design and installation of rotary drum dryers capable of reducing the moisture content of manure from high-rise houses with 65 percent water or belt systems with 45 percent water down to 15 percent. Manure handling and drying installations convert a waste product into a valuable pathogen-free fertilizer in a commercially acceptable form for domestic and institutional applications.

 

Direct application of raw manure to farmland will be subject to increasing restriction as nitrogen percolating through soil contaminates ground water and hence wells. Runoff entering streams and waterways will come under heightened scrutiny from state and federal regulators.

 A Uzelac rotary dryer installations reduces odor, obviating complaints and lawsuits and when used with belt manure collection, effectively eliminates fly problems without expenditure on insecticides. In the future environmental regulations may necessitate on-farm or remote processing of manure before application.

 

A typical Uzelac on-farm or remote installation comprises:-

  • Hoppers to accumulate raw material conveyed from houses or delivered from farms
  • A mixer to ensure that raw material is uniform in composition before processing
  • An air-heater assembly to fire the rotary drum dryer configured to the volume of input
  • A product collector to receive processed, dried material
  • A dust cyclone to limit air contamination
  • An optional pellet mill and pellet cooler to convert processed material into a saleable form
  • Packaging systems for either pelleted or granular products or a storage and delivery system for bulk product

 

Current Uzelac customers in the U.S. poultry industry include Herbruck’s Poultry Ranch, Giroux’s Poultry Farm, Michael Foods, Foster Farms and Tyson Foods among others.

 

Financial Evaluation of Uzelac Manure Drying Installations

Calculating the return from an investment in a manure drying installation is dependent on a number of factors including:-

  • Housing system such as high-rise, belt battery or aviary that will influence the moisture content of raw manure.
  • Prevailing power, gas and labor costs.
  • Single or two-shift operation to process manure from a complex or combination of smaller operations.
  • Seasonal climatic conditions with hot weather increasing water consumption of a flock, leading to manure with a higher moisture content
  • Size of supply flock influencing initial capital cost and utilization. Some installations are sited remotely to receive manure from a number of farms or complexes.
  • Form of product sold, whether bulk or bagged, granular or pelleted, will determine unit revenue.
  • State or local grants to offset capital cost.
  • Prevailing interest rates.

 

In order to calculate the return on investment from a manure-drying installation the following boiler-plate examples are provided. The first model assumes single shift operation, 40 hours/week; processing manure from one million hens in aviaries. The format allows insertion of specific values relating to a complex:- 

Capital cost of a Uzelac manure drying installation.

Buildings and installations

$1,060,000

Mechanical equipment

$2,945,000

Total Capital cost

$4,005,000

Annual Fixed Cost of Operation :

Depreciation, Buildings @ 7% pa

$ 74,200

Depreciation, Equipment @ 15% pa

$ 441,750

Interest on capital @ 3% pa

$ 120,150

Overhead provision

$ 10,000

Annual Fixed Cost

$ 646,100

Annual Variable Cost of Single-shift Operation

Labor

$ 150,000

Maintenance provision

$ 50,000

Power Estimate

$ 250,000

Annual Variable Cost

$ 450,000

Annual Cost of Operation

$1,096,100

 

In assessing the return on investment it is assumed that 1,000,000 hens in aviary houses produce 35,000 tons raw manure each year with 45 percent moisture content dried to 15 percent resulting in 24,500 tons of saleable product.

 

Revenue from dry product @ $145 per ton

$3,552,500

Less value of wet manure @ $10 per ton

$ 350,000

Differential in revenue

$ 3,202,500

Add saving on fly and rodent control

$ 10,000

Annual Revenue

$ 3,212,500

Less Annual Fixed and Variable Costs

$ 1,096,100

Annual Contribution

$ 2,116,400

 

Discounted Cash Flow Calculation

In order to evaluate the capital cost of the manure drying installation the annual contribution over a five-year period would be:-

 

Year 1 2 3 4 5

5% discount factor

0.95 0.91 0.86 0.82 0.78

Annual Revenue ($ mil.)

2.01 1.93 1.82 1.74 1.65

 

Net Present value over 5 years attains $9.15 million

 

This exceeds Present Value applying 5% annual discount factor

 

Discounted payback of 25 months

In evaluating the effect of selling price as the major variable influencing ROI a series of DCF calculations were performed yielding the following results:-

 

Selling Price per ton Net present Value of Investment over 5 years

 

$ 75 $1.74 million
$ 85 $2.79 million
$105 $4.91 million
$125 $7.03 million
$145 $9.15 million

 

The return on investment is extremely sensitive to unit selling price. At $105 per ton the project would require 47 months to achieve a breakeven net present value of $4 million, corresponding to the original capital investment.

 

In demonstrating the influence of volume and price on the return on investment the manure-drying installation was evaluated with the theoretical output of 2 million hens, operating the Uzelac plant on a double-shift schedule 80 hours per week, corresponding to five, 16-hour working days. In this approach in the interests of simplicity, fixed costs of $646,100 would remain unaltered but variable costs would double to $900,000.

 

Annual Cost of Operation $1,546,100

 

In assessing the return on investment it is assumed that 2,000,000 hens produce

70,000 tons wet manure each year at 45 percent moisture content dried to 15 percent resulting in

49,000 tons of saleable product.

Revenue from dry product @ $145 per ton $7,105,000
Less value of wet manure @ $10 per ton $ 700,000
Differential in revenue $ 6,405,000
Add saving on fly and rodent control $ 20,000
Annual Revenue $ 6,425,000
Less Annual Fixed and Variable Costs $ 1,546,100
Annual Contribution $ 4,878,900

Discounted Cash Flow Calculation

 

In order to evaluate the capital cost of the manure drying installation the annual contribution over a five-year period would be:-

Year 1 2 3 4 5
5% discount 0.95 0.91 0.86 0.82 0.78
Annual Revenue ($ mil) 4.63 4.44 4.20 4.00 3.81

Net Present value over 5 years attains $21.08 million

 

Exceeds Present Value by a factor of 5 applying a 5% annual discount factor

Discounted payback period of 10 months

In evaluating the effect of selling price as the major variable influencing return, a series of DCF calculations were performed yielding the following results:-

Selling Price per ton Net present Value of Investment over 5 years

$ 75 $ 6.27 million
$ 85 $ 8.37 million
$105 $12.61 million
$125 $16.84 million
$145 $21.08 million

 

The return on investment is extremely sensitive to unit selling price. At $75 per ton the project would require 37 months to achieve a breakeven net present value of $4 million, corresponding to the original capital investment.

 

The calculations provided assume manure from an aviary house with 45 percent moisture. Manure from high-rise complexes with moisture content of 65 percent would require a higher drying capacity with proportional increases in capital and operating costs to reduce moisture content to 15 percent.

 

Uzelac manufactures components for rotary drying systems that can be adapted in capacity and layout to suit specific applications. Uzelac engineers are available to review specifications and to design custom installations.

 

Additional information on Uzelac installations can be accessed by clicking on to the Uzelac logo on the right side of the welcome page or on www.uzelacind.com or (414) 529 0240 - contact Mike Terry.