FAF is providing financing for Hultsteins’ refrigeration units
Hultsteins, a Swedish hydraulic refrigeration manufacturer, recently teamed with First Asset Finance (FAF) to provide bespoke funding solutions for operators using Hultsteins’ diesel-free systems.
With more than 40 years of experience in providing leasing and finance support across a range of transport sectors, First Asset Finance is positioned to work with temperature-controlled operators attempting to balance environmental obligations with the increased running costs expected when the long-standing rebate on red diesel for the sector in the United Kingdom is withdrawn in under two years’ time.
“From an environmental standpoint the Euro 6 emissions standard is clearly a good thing, but as yet, there is no such control applicable to a diesel-powered refrigeration unit,” said Martin Vodden, FAF director. “Combine this with the hike in diesel costs which will hit the sector in April 2022, and it follows that operators throughout the cold chain are turning to manufacturers who can provide an affordable and sustainable alternative to conventional systems.”
Hultsteins has been designing and producing hydraulic and electric-drive transport refrigeration systems for nearly 60 years, and as the environmental and economic effects of diesel consumption become more evident, models such as the company’s on-board electric generator, Ecogen, are increasingly seen as an ideal solution, the company said.
“Due to Covid-19, cash, more than ever, is king,” Vodden said. “And at a time when high street banks are particularly risk averse, First Asset Finance can draw on our own cash resources or work with designated banks to help structure finance programmes aligned to assets, which we believe have strong earning potential in the longer term.”
Hultsteins’ Ecogen system already is making its mark in temperature-controlled fleets throughout Europe, said Graham Usher, managing director of Eco Truck Fridge and Hultsteins’ sales agent in the UK.
“Ecogen can be retrofitted easily to any truck with an engine drive PTO (power take-off),” Usher said. “And generating a constant 400-volt, 3-phase electrical power to the same standard as the mains supply will drive any type of conventional diesel fridge with electric standby—only without burning the diesel.”
Usher adds that for a typical fridge engine consuming 3-5 litres of red diesel per hour for 2,500 hours per annum, the cost in terms of fuel bills and environmental damage is not only significant at today’s rates but after the price rise, will be substantial—perhaps £5,000-6,000 ($6,525-$7,830) additional cost for each trailer.
“Moreover, by effectively switching off the diesel engine, the life expectancy of the existing fridge unit will be greatly extended, and subject to the annual amount of running hours, the Ecogen system can expect to see a return on investment in approximately 18 months,” Usher continued.
This relatively fast ROI, according to Vodden, combined with Ecogen’s low cost of ownership, enable FAF to structure funding solutions with realistic residual values, spread over the long working life of the equipment.
“Based on our confidence in the Ecogen system and the market-proven credentials of Hultsteins, we can typically structure a five-year lease arrangement which, because of the relatively high residual value, means the break-even period is enhanced and not all of the capital needs to be paid back within the term,” Vodden said
Vodden also said that, given the long-life expectancy and residual value of the Ecogen system, First Asset can, if required, extend the rental period beyond the initial five years.
“Ecogen looks set to become the default choice for cost conscious and environmentally responsible transporters,” Vodden said. “And First Asset Finance is delighted to be working with Hultsteins and their customers to provide the right funding package to match their individual needs.”
