Episode Transcript
Audrey: Welcome to Coming Down the Pipe by ARS Global. We're a podcast about pipeline assets, investments, construction, and the market overall. ARS Global is the midstream partner for Streamline Sourcing Solutions. And my name is Audrey Walsh, and I am the controller at ARS Global.
Josh: I'm Josh Averitt, president of ARS Global and Asset Resource.
Audrey: Okay. I'm not usually the one sitting here asking the questions, it's usually Josh, so we're going to switch things up today and introduce you to our newest platform asset resource. So pretty much ARS Global offers asset procurement, supplying assets for all things, PVF, and the pipeline construction process. Asset resource, Josh?
Josh: yeah, so we're excited to introduce asset resource. It's an extension of ARS global two different companies, but Working hand -in -hand with a little bit of overlap in the peer -to -peer sourcing model So we've created a new platform that basically assists owners of surplus materials or surplus assets To find disposition channels that increase their recovery on their initial investment by utilizing different hierarchies according to the Investment Recovery Association and some different sales processes like sealed bids and traditional auction formats.
1:23
Audrey: And how would you say that using the circular economy model that you discussed, like reusing, resourcing material, and how does that circular economy come into play whenever we're talking about asset resource?
Josh: Got it. So, in a linear model, you typically have, well, a straight line, right? You have procurement, you have delivery and you either have the use or the disposition of whatever material you're sourcing and usually that disposition comes in the form of scrap metal or trash or disposal methods like that. What we've done is we've created a circular economy environment where we're connecting different peers on asset resource and so that model Looks like procurement use Finding a different disposition channel other than scrap or trash To circulate that back in to a usable Usable environment, so we're going out and we're finding other peers other oil and gas companies other solar companies other electrical companies Other renewable companies and we're saying hey we have this material, it's available from an owner, it's for purchase, and oftentimes the buyers of that are able to, you know, they're able to realize cost savings, they're able to realize lead time savings, and by thinking outside the box and repurposing something a little bit, they can often get their projects online faster and cheaper than the typical linear model.
Audrey: Right. Okay. And we're promoting reuse and recycling of these materials, correct? Not necessarily reusing them because they're not used.
Josh: That's right. So everything on our site at this point in time is not used. Some of it is documented and traceable. Some of it's not. this is asset resource, not ARS Global, and one way or the other, those items can get reused. And I was talking earlier about the end users and the other peers maybe finding these items and being able to reuse them on their own projects, but we're also tapping into a whole another market of surplus distributors, surplus brokers, and things like that that may be able to repurpose an asset that's on our site. For example, if a valve was purchased for a crude oil pipeline, we might have a distributor on our website whose primary work is in developing water infrastructure for municipalities. Well, they might be able to take that valve and resell it and reuse it to whoever their end user may be and repurpose that into a completely different applications so again we kind of get that circular environment going.
4:40
Audrey: Okay and how would you say so some people would say that this might not work for the energy industry where product quality is incredibly important like you said some of them some of the documentation is going to be online for these materials and then some of them aren’t so it just depends on the end user I guess is that what you're saying?
Josh: sure well it depends on the end user but it also is up to ARS and asset resource to kind of draw that distinct line in the sand of how these, how this material is marketed. If we have a gas company that comes to us and they say, hey, we have a hundred ball valves that was purchased for this project and that project is no longer a go. ARS will go through that documentation and say, hey, all the there, the traceability is there. It's the brands that we have relationships with the manufacturers to go through that retest, recertify, and re -warranty process that we've mentioned in previous episodes. ARS will likely take on marketing that asset. If a gas company comes to us and says, hey, we've got 40 valves left over from an acquisition, we're not quite sure about the traceability, but they're still great valves, they don't need to go in a scrap metal bin, but we need to find a home for them. Likely it will go in asset resources directions, so even though it might not be good for on some of the products that don't have the traceability, it might not be good for reuse in the energy sector, there's plenty of other applications in the world that the items can fit into.
Audrey: Okay, - Cool, and explain to me the relationship. We've kind of already touched on it a little bit, but between ARS Global and Asset Resource.
Josh: Sure, so ARS Global's peer -to -peer marketing network is strictly end user to end user. It is like new, prime surplus, never been used, fully documented, fully traceable on our valve products, warranties will convey from the manufacturer. Asset resource is more about finding a home for everything. And that could be something used. It could be something where the traceability is not there. It could be a perfectly good asset, like a bucket truck for an electrical service or a work -over rig from an oil -filled service company that may fit into someone else's fleet a little bit better. But it doesn't-- it's not necessarily at its end of life.
7:15
Audrey: Right. Okay. Makes sense. Yeah. OK, cool. And how do you say that we would use this peer -to -peer network that you mentioned to take advantage or have opportunities to lower the project costs or expedites in one's timeline?
Josh: well the You know for the first couple years ARS was in business. It was a lot of Product education with our customers a lot of face -to -face meetings and looking people in eyes and saying guys We're not we're not Sanford and Suns. We're not we're not selling scrap metal We're selling good usable pipeline components,
okay And it's taken a lot of years to develop those relationships. Another portfolio company of Ants CPI, they've been around for over 25 years. So we have the relationship,
8:03
we have the trust, and we have proven concepts now to show our customers that, hey, the quality's there, we're here to help you expedite your materials, lower your costs, and get your project online.
Audrey: Right, okay, yeah, I mean, the proof is there. So hopefully the trust flows into asset resource and leveraging the connections that we have, would you say that this is going to be a better way to source these assets out to other end users?
Josh: Yeah. And like I said, we've spent a lot of time developing our buyer list, developing those relationships, getting into people's bidding processes. So it takes that component out of a seller's bandwidth that they have to allocate for dispositioning assets at the end of a project. Their job is to move on to the next project that's going to be built, that's going to be placed into service. Their job is not to go find surplus pipe buyers, surplus valve buyers, wind turbine buyers, solar buyers, whatever it is. - That's not in their job scope.
9:24
Audrey: Okay, very cool. And the model that's built around asset resource kind of is like an investment recovery association type. And reselling these assets would get them more value than scrap, right?
Josh: That's right.
Audrey: Is that's what the goal is?
Josh: Yes And like in previous episodes, we've hinted at the hierarchy that the Investment Recovery Association published in their handbook. And that hierarchy, starting from the bottom, is scrap metal. And then it goes to brokers for resale, then it goes to end users. And that end user section is basically the pinnacle of return on whatever asset they're selling. So We've cut our teeth and established our role as an investment recovery extension, if you want to call it, of oil and gas companies, and now transitioning into other energy sectors. That's our job. Our job is to get sellers the most return for their asset that we can possibly recover.
Audrey: Okay. Awesome. Anything else you want to add to this awesome description of asset resource now. OK, well, be sure to like and subscribe and follow Coming Down the Pipe by ARS Global, Radar podcast, and this is a monthly podcast, so please follow along and join us each month. Thanks, guys.
Josh: Thank you.
