Mothballing

Mothballing: Meaning and Overview

Mothballing is the planned deactivation and preservation of equipment, facilities, or assets so they can be returned to service, sold, or salvaged later. It’s commonly used for high-cost, long-lived capital goods—aircraft, ships, oil rigs, heavy machinery, and manufacturing plants—where retaining value and reopening quickly can be strategically important.

Key takeaways

• Mothballing preserves assets for potential future use, resale, or parts recovery.
• It helps companies reduce operating costs and maintain flexibility during downturns.
• Proper mothballing requires planning, documentation, and ongoing maintenance; neglect can destroy asset value.

How mothballing works

The term comes from storing goods with chemical deterrents (mothballs) to prevent damage during long-term storage. Applied to industry, mothballing is more complex:

• Deactivation: shut down systems safely and remove hazardous materials.
• Preservation: apply corrosion inhibitors, seal openings, climate-control enclosures, and other protective measures.
• Documentation: record the status, procedures performed, spare parts, and maintenance schedule.
• Maintenance: perform periodic inspections and upkeep so assets remain restartable.
• Outcomes: assets may be returned to service, refurbished, disassembled for parts, sold, or scrapped for salvage.

Proper mothballing preserves value and enables relatively rapid restart when market conditions improve. Poor or hasty shutdowns—simply locking a facility and leaving equipment—can lead to rapid deterioration and conversion of valuable assets into scrap.

Best practices and practical tips

• Plan for the long term—market disruptions are often temporary.
• Budget specifically for mothballing and ongoing preservation costs.
• Appoint a dedicated manager to develop and execute a mothballing strategy.
• Maintain required permits and regulatory compliance.
• Handle hazardous materials early—delaying cleanup raises future costs and liabilities.
• Use experienced operators and mechanics for shutdown and preservation tasks.
• Keep detailed, up-to-date records of all preservation work and inspection logs.

Examples

• Oil and drilling rigs: Drilling equipment is costly and subject to boom–bust cycles. Properly mothballed rigs can be reactivated at a fraction of replacement cost; poorly preserved rigs may be worth only scrap.
• Aircraft: Commercial and military planes are often placed in long-term storage at boneyards where they are preserved, cannibalized for parts, or returned to service.
• Ships and fleets: Navies and commercial operators maintain reserve “ghost fleets” that can be reconditioned and recommissioned when needed.

Conclusion

Mothballing is a strategic tool for managing capital-intensive assets through cyclical markets or temporary shutdowns. When done correctly—through planning, preservation, and maintenance—it preserves asset value, reduces costs during downturns, and shortens the time and expense required to resume operations. Neglecting proper mothballing risks losing the asset’s remaining value and incurring higher future replacement or cleanup costs.