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Nightly Business Report

Posted on March 12, 2009 05:28 by Aaron Equipment Co, Inc.

PBS: NIGHTLY BUSINESS REPORT

"Reviving the Economy: What Should Business Do?"-Old Is New

Tuesday, March 10, 2009

SUSIE GHARIB: In this tough economy, many consumers are turning to second-hand shops for clothes, furniture and appliances and businesses are no different. Many are shopping around for pre-owned equipment instead of buying new. As we continue our series, "Reviving the Economy: What Should Business Do?" Diane Eastabrook profiles a firm making its mark on the manufacturing market.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Last year, Anderson Associates expanded its operations so it could make more liquid silicone. But to do that, the company needed extra tanks, filters, reactors and lab equipment. Vice President Malcolm Penman says Anderson saved thousands of dollars by purchasing mostly used equipment; some of it came from a pharmaceutical company.

MALCOLM PENMAN, VP MANUFACTURING, ANDERSON ASSOCIATES: The stuff that comes out of a pharmaceutical operation -- they take very good care of the equipment. It's like in new condition when you get it.

EASTABROOK: Anderson bought its wares from Aaron Equipment Company in Bensenville, Illinois. Aaron is like a thrift store for manufacturers. Company co-owner Alan Cohen says bankruptcies and other business trends are making this a buyer's market for used processing equipment.

ALAN COHEN, CO-OWNER, AARON EQUIPMENT COMPANY: It can be a positive experience -- a company changing a process or scaling up. They've sold the business and there is excess capacity for the acquiring company.

EASTABROOK: Aaron reconditions most of the equipment it buys. Sometimes, that simply means applying a new coat of paint or replacing a part. Processing equipment often crosses numerous industries. This ribbon blender, which mixes liquids and powders, could be used by a dairy, chemical, cosmetic or food company. If Aaron doesn't already have a buyer for an item, marketing specialists search the Internet for one or email customers who may have a use for the equipment. The company also monitors its own web site to see who is in the market for what. For example, someone in Egypt is looking for a used generator.

COHEN: What we do is, even if it doesn't generate into a quote, we know that there is somebody in Egypt who needs a generator and we can take some proactive activity based on that later on.

EASTABROOK: So, if you don't have the generator here, you can go out and look for it?

COHEN: That's correct.

EASTABROOK: Aaron Equipment is a privately owned company. Last year was the company's most profitable in its 70-year history. Cohen isn't sure sales will be as strong this year, but he thinks they'll be solid.

COHEN: In the basic industries, demand may be down, but they can't go out of business. People need to transport themselves. They need to eat. They need medical care. They need to buy drugs and so the core industries will be OK.

EASTABROOK: Cohen also thinks if credit remains tight, used equipment could help companies improve their productivity and protect their bottom lines at the same time.

Diane Eastabrook, NIGHTLY BUSINESS REPORT, Bensenville, Illinois.