Insights · Reference
Buying a duct machine or auto duct line is a capital decision, and it needs a payback case. This is the method, not a sales pitch: the two formulas, plus every cost input and every annual-benefit input, so you can run the numbers for your own shop. We deliberately put no figures in the equations — the right values are yours, not ours.
Everything reduces to two equations. Let I = the total investment and B = the annual net benefit (both defined below):
Payback period (years) = I ÷ B
(multiply by 12 for months)
Annual ROI (%) = (B ÷ I) × 100
The two are mirror images: ROI is just the inverse of the payback period expressed as a percentage. The whole exercise is therefore about getting I and B right for your own shop — the formulas do the rest.
Use the full landed-and-ready cost, not the sticker price. Add up:
| Investment input | What it covers |
|---|---|
| Machine price | The line or machine itself (FOB or CIF) |
| Freight | Sea or road freight to your door |
| Duties & taxes | Import duty and any applicable taxes |
| Installation & commissioning | Rigging, positioning, set-up and run-test |
| Operator training | Getting your team productive on the machine |
| Site preparation | Three-phase electrical supply and floor works (see power & electrical requirements) |
| Initial spares & tooling | Wear parts and consumables to hold stock of |
Sum these to get I.
Add the yearly benefits, then subtract the yearly running cost:
| Benefit input (per year) | How to estimate it |
|---|---|
| + Labour saved | Fabricators no longer needed on that work × loaded hourly rate × hours |
| + Throughput / revenue gain | Extra finished duct per shift × margin (or the outsourcing cost it replaces) |
| + Outsourcing avoided | Duct you currently buy in, now made in-house, at the bought-in price |
| + Waste & rework reduction | Material and labour no longer lost to scrap and re-do |
| − Annual running cost | Power, consumables and maintenance for the machine |
The total is B, the annual net benefit.
Divide: I ÷ B gives the payback period; (B ÷ I) × 100 gives the annual ROI. Then pressure-test it:
1. Use conservative benefit figures. If the payback still works on cautious labour and throughput numbers, the case is robust. If it only works on optimistic ones, it is fragile.
2. Compare to the alternative. The real question is not "is the payback good" in the abstract, but "is it better than continuing to fabricate manually or to outsource". Put the status-quo annual cost beside the machine case.
3. Compare to your hurdle. Measure the payback period or ROI against the return your business expects from any capital it ties up.
This is a cash-payback model, kept simple on purpose. For a formal investment case your accountant may also fold in depreciation and tax treatment, the time value of money (discounting future benefits to a net present value), and financing cost if the machine is funded. Those refine the answer but do not change the inputs above — they still start from your I and B. The figures throughout are yours to supply; SBKJ does not publish a single "typical payback", because it depends entirely on your labour rates, volumes and what you currently outsource.
Get a machine quote to plug into your payback model →
Payback period (years) = total investment ÷ annual net benefit. Total investment = machine price + freight + duties + installation + training + site prep + spares. Annual net benefit = labour saved + throughput value + outsourcing avoided + waste/rework reduction − running cost. Multiply by 12 for months. Use your own figures.
Annual ROI (%) = (annual net benefit ÷ total investment) × 100. It is simply the inverse of the payback period expressed as a percentage.
Freight, import duties, installation and commissioning, operator training, site preparation (three-phase supply + floor), initial spares and tooling, and ongoing power/consumables/maintenance. Omitting these understates the payback.
Labour saved, higher throughput (more duct per shift = more revenue or less outsourcing), reduced waste and rework, and shorter lead times. Quantify each per year, then offset running cost.
Send your duct volumes and labour rates and an SBKJ engineer helps you build a realistic payback model — with a real quote, not a guess.
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