M&E Appraisal Associates, Inc. (“M&EAA”) has over 25 years experience providing rubber products manufacturing machinery appraisals.

M&EAA recently appraised the machinery & equipment of a manufacturer of rubber oil seals, rubber valve stem seals and rubber o-rings.

The primary rubber manufacturing machinery & equipment included: rubber mixing mills; rubber extruders; vulcanizing presses; vacuum presses; rubber injection presses; trim presses/machines; wax spin coating machines; custom cleaning machines; test & quality control equipment; general plant support equipment; material handling equipment; mobile equipment, etc.

The subject rubber production equipment ranged in age from new to manufactured in the 1990’s. A majority of the machinery & equipment was specially designed and built by original equipment manufacturers (OEM’s) in Japan, Taiwan and Korea. As part of the cost approach methodology, the appraiser was very reliant on original cost information and replacement cost information provided by the OEM’s and their representatives.

The company manufactures a majority of their products for use in the automotive industry. In the utilization of the cost approach, the appraiser was very diligent in the consideration of economic obsolescence. Based on current market research reports, industry revenue is expected to decline slightly despite sustained strong demand for automotive rubber components from downstream buyers. Weakening demand from other key markets, as well as sharp drops in the price of natural and synthetic rubber inputs, is anticipated to further constrain industry performance. Import competition is expected to intensify over the next five years. Lower labor costs and a relatively less stringent regulatory environments in countries outside of the U.S. will weigh on domestic industry operators.

In summary, the primary rubber products manufacturing machinery is newer, in good condition and produces high demand automotive related items. The subject machinery & equipment is not solely dedicated to the manufacture of automotive related end products. The non dedicated nature of the machinery & equipment supports favorable value conclusions, which were somewhat tempered by the economic considerations previously described.