First Asset Finance has teamed-up with Hultsteins, the Swedish and British hydraulic refrigeration manufacturer, to provide bespoke funding solutions for operators using Hultsteins’ diesel-free systems.
With over 40 years of experience in providing leasing and finance support across a wide range of transport sectors, First Asset Finance is uniquely 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obligations with the increased running costs expected when the long-standing rebate on red diesel for the sector is withdrawn in under two years’ time.
FAF Director, Martin Vodden explains: “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. 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.”
In this regard, Hultsteins have 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 the optimum solution.
“Due to Covid-19 cash, more than ever, is king,” continues Martin “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.”
Accordingly, Hultsteins’ Ecogen system is already making its mark in temperature-controlled fleets throughout Europe, says Graham Usher, MD 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)” he explains, “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.”
Graham 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 £5-6,000 additional cost for each trailer.”
“Moreover,” says Graham “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.”
This relatively fast ROI, according to Martin Vodden, combined with Ecogen’s low cost of ownership, enable First Asset Finance 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,” adds Martin “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.”
Martin also explains 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 5 years.
“Ecogen looks set to become the default choice for cost conscious and environmentally responsible transporters” concludes Martin Vodden, “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.”
Led by the Former head of Lloyds Leasing, Patrick Sherrington, First Asset Finance invest in asset residual values and partner with leading debt providers to give assistance to SMEs across a variety of industry sectors, concerning all funding aspects, including structuring, documentation, tax and accounting.
Hultsteins is a family-owned company rooted in Sweden, that launched the first fossil-free hydraulic refrigeration unit in 1962.
The company aims to offer optimal refrigerated transport technology that meets the most demanding customer requirements and to guarantee the same high standard of service and assistance.
Today, Hultsteins manufactures hydraulic and electric refrigeration systems, in the UK and Sweden and all products are designed for external mounting on the vehicle to save cargo space.
Hultsteins has been in the UK market since 2018, acquiring British company Cold Connect in 2019.