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by Pınar Özbay Nihal Payza

by Pınar Özbay Nihal Payza Zeynep Pekişen Deniz Uğurlar. ISOPROPYL ALCOHOL PRODUCTION PLANT CHIPA. Information about. Isopropyl Alcohol IPA Manufacturing Processes Process Selection

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by Pınar Özbay Nihal Payza

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  1. by Pınar Özbay Nihal Payza Zeynep Pekişen Deniz Uğurlar ISOPROPYL ALCOHOL PRODUCTION PLANT CHIPA

  2. Information about... Isopropyl Alcohol IPA Manufacturing Processes Process Selection Market Research Design Capacity of IPA Process Flow Diagram Economical Evaluation • Purchased Equipment Cost • Capital Investment Calculations • Total Product Cost Calculations • Cash Flow Calculations • Profitability Analysis • Break-Even Point Assumptions Summary

  3. Isopropyl Alcohol C3H7OH Flammable , colorless liquid with a strong and pleasant odor Miscible with water , ethanol , acetone and benzene Applications Pharmaceuticals ,pesticides ,coatings As cleaning agents used on electronic devices Anti-freeze agent in fuel

  4. IPA Manufacturing Processes Direct Hydration combination of water and propylene with acidic cation exchange resin catalyst Indirect Hydration Reaction of propylene with sulfuric acid with a heterogenous polymeric acid catalyst Acetone Hydrogenation of acetone Advantages of Direct Hydration • Thermally stable polymeric catalyst • High product quality improvement • Cost effective • Environmental friendly • High selectivity of IPA

  5. Process Selection Process for producing isopropyl alcohol, US 5,763,693

  6. Market Research Largest producers around the world : Shell, ExxonMobil, Sasol and Dow (72%) ARKEM KİMYA in Turkey : %34 of total market share

  7. Design Capacity of IPA • TUIK DATA Reasons of fluctuation Decrease in demand for IPA Economis crisis New substitute chemicals as ethyl alcohol Consumption data taken from ARKEM Kimya consistent with TUIK data

  8. Design Capacity of IPA • Year difference calculation between countries • Population, GDP, growth rates and consumption of countries • Calculation of future population and GDP of Turkey reference year: 2005 • Calculation of consumption of Turkey per capita • Final design capacity of Turkey

  9. Design Capacity of IPA • Consumption Projections of IPA • 3 year investment (2009-2010-2011) • 2 year ramp up (2012-2013) • 1st year  0.5 * capacity • 2nd year 0.9 * capacity • 3rd year  full capacity • 14 year operation (2012-2025) The best fit Logaritmic model full capacity of IPA in 2025 43,000 tons/year

  10. Process Flow Diagram Direct Hydration Unit (Packed Bed) • No side reaction • X = 0.75 • adiabatic rxn at 80atm • T : 418  423 • Sulfonated ion exchange resin Distillation Ttop:337K Tbottom:348 • Propylene recycle to mixer • Bottom: propane 96% propylene 4% propane Mixer Centrifugal Compressors Efficiency : 0.75 Pumps Efficiency :0.7 Extraction T: 410K Extraction agent: propane • Top: Isopraponal, water, propane • Bottom: Water recycle to mixer Gas-Liquid Separator T: 354 K • Top: Propane • Bottom: IPA + 10% water propane propane propane water 90% IPA 10% water

  11. Purchased Equipment Cost • Heat exchangers Type of material-Carbon Steel Heat transfer area-500.8m2 Type factor for fixed tube sheet • Compressors&Expanders Required power Type-Centrifugal • Pumps Volumetric flow rate Pressure & Pressure adjustment factor Material adjustment factor (cast iron) • Reactor Type-Fixed bed jacketed type Construction material-Stainless Steel Capacity-98m3 @80 atm • Distillation  Diameter- 0.8m Number of stages-50 Type of material-Carbon Steel • Extraction Diameter-1.5m Height-8m Type of material-Carbon Steel • Mixer Type-Rotary,Double Cone Volume-7m3 Type of material-Carbon Steel • Valve Nominal Diameter-0.13m Type-Pressure regulators for gases and liquids • Storage Tanks & Flash Drum  Volume-9.12m3 (for flash drum) Chemical Engineering Plant Cost Index

  12. Total Purchased Equipment Cost

  13. Capital investment calculations • Direct, Indirect costs and Working capital investment are calculated by multipyling with a certain fraction of purchased equipment cost • Fixed capital investment : Direct costs + Indirect costs • Total capital investment : Fixed capital investment + Working capital investment

  14. Total product cost without depreciation TPC = Manufacturing cost + General Expenses Variable cost + Fixed charges + Plant overhead = Price($/kg)* Annual amount • Unit price 267.9 $/kg • Total catalyst cost during the production life: 12.812 million $

  15. Cash flow calculation • The investments at the beginning of 2009, 2010 and 2011 are calculated including inflation rate... FCI2009=FCI*0.15*construction inflation rate0 FCI2010=FCI*0.35* construction inflation rate1 FCI2011=FCI*0.50* =construction inflation rate2 • Total Capital Invesment = FCI + WCI • Sales Total Annual Value of IPA = price ($/kg) * annual amount(kg/y) = 1.17 * (43*10^6) = 50.31*10^6 $/y • 1st and 2nd years -> operating rates are 0.5 and 0.9 respectively • Annual TPC is calculated according to these data.

  16. Cash flow calculation

  17. Cash flow calculation dj = FCI * depreciation factor j • In order to find annual cash flow, 5 years MACRS depreciation method is used • Cash flow can be obtained with corresponding equations Gross Profit = Annual Sales – TPC w/o dep’n – dep’n –startup costs Net Profit = Gross Profit * (1- tax rate) Cash flow = Net Profit + Depreciation Total Cash Flow = Annual Cash Flow – Planned Investments

  18. Cumulative Cash Flow Evaluation

  19. Graphical representation shows that in 2014 the plant starts to make profit

  20. Profitability Analysis Time Value of Money not included • Return on Investment (ROI)  mar=0.15 ROI=29% > mar=15% • Payback Period (PBP) PBP=2.37 < PBPref=3.99 • Net Return (NR) NR= 6.406*106> 0

  21. Profitability Analysis Time Value of Money included with Discrete Cash Flows and Discounting • Net Present Value interest rate, i=0.15 NPV=44.492 > 0 • Discounted Cash Flow Rate of Return (DCFR) by trial error DCFR 29 % > 15%. Time Value of Money included with Continuous Cash Flows and Discounting > ram= 0.14 PROFITABLE 

  22. Break-Even Point • Break-Even Capacity  41,517 tons/year • Production Capacity  43,000 tons/year • Production Capacity > B.E Capacity  Profit

  23. Assumptions for Economic Evaluation • Investment in 3 years  2009 – 15%  warum? 2010 – 35% 2011 – 50% • No additional planned investment such as plant replacement • Salvage value is taken as zero • Start-up expense  10% of FCI • Construction inflation rate  2% Product price inflation rate  0% TPC inflation rate  2% • Two-year ramp-up production rates 2012 – 0.5  in order to reduce risk 2013 – 0.9 2014 – 1.0 • 5-year MACRS Depreciation Method  warum? • maris taken as 0.15

  24. As a summary . . . Total annual Cash Flow 184.67million $ 90% IPA as end product CHIPA Break-Even Capacity 41,517 tonnes/year Pay Back Period 2.37 years 43,000 tonnes per year Isopropyl Alcohol Result  A profitable IPA Manufacturing Plant

  25. THANK YOU FOR YOUR ATTENTION

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