Leonard Waguespack founded both Vacherie Fuel Corporation and Waguespack Oil Company in Vacherie, LA during the early 1930’s. Vacherie Fuels, specifically, offers a full range of propane solutions from outdoor living to residential delivery and refill. Over time, they also began a refinishing program for their 20lb propane cylinders due to the growing costs of new tanks and tighter regulations. Though Vacherie Fuel took a few hits when the demand for propane took a steep decline, the family refused to give up on the company.
Finally, in 2014 propane began to resurface as a clean energy source with technology creating an entirely new market potential. Realizing the potential that the company had, Albert Waguespack III “Allie” left his career as a mechanical engineer to put his energy into the family business. His goal was to invigorate Vacherie Fuels through modernization and to become one of Louisiana’s only local bottle exchange suppliers.
In spring of 2016, Sina Zarei joined Allie to build the business as they once did together as engineering colleagues at Flowserve. At this point, Contrast Equipment made their first appearance in Vacherie Fuel’s journey of overhaul and automation.
Production & Economic Interest
The process that Contrast Equipment was most involved with was the paint finishing line where the refurbished 20lb propane tanks were painted. The Vacherie Fuel team had decided it was crucial to automate their refurbishment processes if they wanted to fulfill their goal of going after high-traffic, large-volume independent grocery and hardware store accounts. These sites would have multiple exchange cages which meant their processes on the back-end had to be much more efficient to keep up with demand. Not only would automation be crucial for this plan, it would also allow them to improve throughput, gain market share, and grow the business as a whole.
Approach & Customer Needs
Before the project in spring of 2016, Vacherie Fuel had previously never used Kremlin Rexson product or done work with Contrast Equipment to install Kremlin Rexson equipment into their processes. Allie and Sina were referred to work with Contrast Equipment by another company, Viking Blast, who they had been working with on other processes at their location.
Besides the retail propane exchange business, Vacherie Fuel also provides onsite residential, commercial, and industrial bobtail fueling and installations which means if they wanted to continue to expand their exchange business and they would have to reduce their overhead costs. The most identifiable way to do this was to eliminate the bottle neck in the process and the large amount of time consumed on refurbishing and painting their propane tanks.
To resolve those issues, Vacherie Fuel first had to lay out all their current processes which included paint type, price per gallon of paint, their use of HVLP manual Graco sprayers, labor time, warehouse space, and more. After completing the layout they contacted Jeff Brady, the Sales and Engineering Manager at Contrast Equipment, eager that he would have an answer.
Contrast Equipment Solution
Jeff absorbed the information and quickly began creating a plan for Vacherie Fuel’s new paint finishing line that would maximize and efficiently paint as many cylinders as possible in the space available to work with. The new paint line included a top-of-the-line Kremlin Rexson 7 – AirMix Gun cylinder coating system and Col-Met paint booth ordered from Contrast Equipment as well as a conveyer system ordered from Pac-Line. Within 6 days of receiving the last piece to the puzzle, the conveyor parts, the entirely revamped paint line was up and running.
According to Allie, the Kremlin Rexson system that Contrast was able to provide was able to “meet and exceed” Vacherie Fuel’s needs by efficiently and consistently painting each cylinder while reducing the man-power required for the process.
Vacherie Fuels ROI
With any project it is important to determine the value-added. While many people dread numbers, Allie and Sina’s engineering minds thrive off them.
|Before Automation||After Automation|
|Cylinders/Hr = 35||Cylinders/Hr = 140|
|Labor Cost/Hr (2 people @ $15/hr) = $30||Labor Cost/Hr (1 person @ $15/hr) = $15|
|Paint Cost/Hr ($.50/cyl *35 cylinders) = $17.50||Paint Cost/Hr ($.186/cyl *140 cylinders = $26.04|
|Total cost for 35 cylinders/hr = $47.50||Total cost for 140 cylinders/hr = $41.04|
*It would take 4 hours to paint 140 cylinders manually and match the new system; this would cost $47.50 x 4 = $190. Compare that to new system’s cost per 140 cylinders which is $41.04.
If you were to take those numbers even further and approximate the costs for Vacherie Fuel over the course of the year painting 700 cylinders per week you would identify the following ROI:
- Automatic Painting: $10,530 per year
- Manual Painting: $49,400 per year
- Cost Savings per Year ($49,400 – $10,530): $38,870
- Approximate Cost of Paint System: $100,000
- ROI ($100,000 / $38,870): 2.57 years
If the numbers are close to their approximations, it will only take around 2.57 years to see a return on their investment. It is important to take into consideration the increased volume that Vacherie Fuel is now capable of and the time allowed into other areas of the business.
After the investment of automating the paint line process, Vacherie Fuel can now reach the goals they have set out to accomplish. The company remains one of the only independent-Louisiana based bulk and propane exchange vendors and has grown into an independently owned grocery, convenience and hardware stores. When asked if Vacherie Fuel would work with Contrast again, Allie enthusiastically state, “Without a doubt! They were on top of the entire job and the service after the sale is A+”. While Vacherie Fuel continues to expand, Contrast Equipment looks forward assisting them in reaching their full potential.
Allie and Sina plan to keep Vacherie Fuel thriving and are determined to live up to the goal of the founder, Leonard Waguespack, of having the company last at least 100 years. As time flies by and Vacherie Fuel proves to properly adjust to the ever-changing economy, it looks like the goal will be no problem for them to achieve.