Download Water Purveyance

Water Purveyance
Bruce Lumis
Amy Ott
Brennan Ott
Noah Whitaker
Outline
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Water-Ways Irrigation Engineers
Customers
Cost Drivers
Changing Technology
Opportunities and Threats
Political Issues
Global Issues
Intersection of Water Channel & Value Chain
Conclusion
Water-Ways Irrigation Engineers
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WWIE purchase equipment to sell and rent
Products
Pipe
 Drip irrigation systems
 Valves and fittings
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WWIE services equipment
Pipe rental accounts for about $100 million in
revenue per year (35% of revenue)
Sale of equipment is about $300k per year
Customers
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Farmers
San Joaquin Valley
 Monterey Bay
 Oxnard area
 Washington
 Oregon
 Canada
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Oil Industry?
Cost Drivers
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Increasing price of water
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Update equipment to use less water while producing
more crops
Increasing price of diesel fuel
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Pumps need fuel to deliver the water
Changing Technology
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Out with the old…
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Water pipes used to be made with concrete, transite, and/or
asbestos!
Problems included easy cracking, substantial water leakage,
oh… and cancer.
...In with the new
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50+ years of increasing knowledge in hydrodynamics.
Increasing use of drip systems vs. old school crop spraying
and flooding.
PVC, polyethylene, and aluminum.
These pipes minimize inner-pipe friction leading to lower
pumping energy demands and better flow-thru rates. Water
loss and contamination is minimal.
Opportunities & Threats
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Opportunities
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The high price of oil ($126/barrel) leads to lucrative markets
for pipes, pumps, and drill cooling.
Going “Green” – High cost of water forces farmers to seek
new equipment that is more effective and efficient.
Threats
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Capitulation of the dollar with growth of aluminum demand
and increasing fuel costs.
Increasing competition from Rain for Rent, Agri-Valley
Irrigation, US Irrigation, Baker Tanks
Political Issues
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Government regulation.
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US Ag firms cannot compete in the global market
due to stringent and unfair regulations and business
laws.
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Workers compensation, payroll taxes, inventory tax,
property tax, and numerous other taxes……..
In China they can grow a bushel of cotton for
pennies, in the US it takes dollars.
Global Issues
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Explosive growth in China has lead to increased
production of products like window seals, which
are made using the same aluminum alloy as
many of the products WWIE purchases.
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“Chinese [aluminum] demand this year will be
about 14.9 million tons, a 24 percent rise from
2007. The country will account for 35% of total
demand by 2020 from 13% in 2000.”
(http://www.researchandmarkets.com/reportinfo.asp?report_id=597714&t=d&cat_id=)
Intersection of Water Channel &
Value Chain
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Channel Selection
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Single channel, based on direct selling
High concentration of buyers
 High need for technical/product service
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Strategic Channel Options
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Distribution intensity
Focus where large number of farmers are
 Oil industry in Central Valley and Oxnard
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THE WATER CHANNEL
AS A COMBINED SUPPLY & DEMAND CHAIN
“Ecology”
(Mother Earth)
“Value”
(Offspring)
“Economy”
(Father Money)
Water affects the Going to
Market of WWIE by steering the
marketing & sales, service, and
ultimately the margin. Water is
not used internally to any
measurable extent.
End Consumer
Conclusion
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Lots of money to be made in transporting water
Increase in oil prices has direct impact on water
Growth in China will have HUGE impact at
home in ways we never thought possible
Must select channel and strategy to optimize
channel carefully