Final Presentation Spring 2010 V2
Transcript of Final Presentation Spring 2010 V2
4/2/2010
Team Members: Eric Busch
Kevin Chrapkowski
Brandon Kussow
Aaron Ritthaler
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• Introduction
• Business Objectives
• Available Production Methods
• Market Survey
• Model Production Plant/PFD
• Mass and Energy Balances
• Safety and Environmental Considerations
• Economic Feasibility/Cash Flow Analysis
• Conclusions
• Recommendations2
• FCC proposed new vinyl acetate production plant within the United States
• Performed extensive analysis:
• Available Production Methods
• Market Survey
• Model Proposed Plant
• Safety and Environmental Considerations
• Optimizations
• Economic Feasibility/Risk Analysis
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• Plant Capacity of 30,000 tons per year
• Accounts for 2.25% of global market
• VAM product 99.6 wt% pure
• Location for feed stock
• Minimal downtime
• Minimal waste generation
• ROI>MARR
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Ethylene – Acetic Acid method was the best choice based on characteristic parameters
MethodAvailability
Cost Hazards
Operating Cost and
ComplexityByproducts and waste
Competitors and Business
Objectives Risk Totals
Ethylene-Acetic Acid 1 2 1 2 1 1 8 Winner
Ethylene-Acetylene 3 3 2 1 2 2 13 Loser
Methanol-CO2 2 1 3 3 3 3 15 Loser
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2005 2006 2007 2008 2009
VAM (cts/lb)
55 72 88 58 45
Ethylene (cts/lb)
50 51 40 38 37.25
Acetic Acid
(cts/lb)51 52 60 68 68
0
10
20
30
40
50
60
70
80
90
100
2004 2005 2006 2007 2008 2009 2010
Ce
nts
pe
r lb
Year
Price History
VAM
Ethylene
Acetic Acid
• VAM prices have fallen
• Ethylene prices have leveled off
• Acetic Acid prices have risen6
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Component Flow Rates (lbs/hr) Inlet Streams Outlet Streams
Acetic Acid 8,816 2,007
Ethylene 3,188 0
Oxygen 4,263 2,424
Glycerol 0 0
Vinyl Acetate 0 9,761
Water 85 2,137
Ethane 1,391 1,391
Carbon Dioxide 0 22
Total 17,743 17,743
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Inlet Energy Outlet Energy
SourceEnergy Flow
(MMBTU/s-hr) % of Total SourceEnergy Flow
(MMBTU/s-hr) % Total
Reactions Stream Energy
Reactor 8.1 16.5% Outlet Streams 0.9 1.8%
Heaters Coolers
E-100 7.3 14.9% E-101 4.1 8.4%
E-103 0.4 0.8% E-102 9.7 19.7%
Reboiler Absorber 2.2 4.4% Reactor 8.1 16.5%
Distillation Column 1 14.6 29.7% Distillation Column 1 14.6 29.7%
Distillation Column 2 3.8 7.8% Distillation Column 2 3 6.2%
Distillation Column 3 8.7 17.8% Distillation Column 3 8.7 17.7%
Subtotal 36.9 75.4% Subtotal 48.2 98.2%
Pumps and Compressors
P-100 0 0.0%
Compressor 1 4 8.1%
Subtotal 4 8.1%
Overall Inlet Energy 49 100.0%Overall Outlet Energy: 49.1 100.0%9
• Highly Exothermic Reaction• “Runaway” possible• Deluge system
• Combustible Chemicals• Nitrogen inerting
• Oxidizing Agents• Asphyxiation Hazards
• Nitrogen, CO2• Polymerization Hazards
• Hydroquinone added to VAM
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• CO2 Emissions
• Plant emits 173 tons of CO2 each year
• Scrubber using monoethanolamine
• Some states have adopted more strict VOC regulations• 100 g/L VOC’s for flat coatings
• 150 g/L VOC’s for non-flat coatings
• 250 g/L VOC’s for non-flat “high gloss” coatings
• 340 g/L VOC’s for industrial maintenance coatings
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• Fixed Capital Investment
12
• FCI was calculated by the following equation:
FCI = PEC-delivered * Lang Factor
• Lang Factor for fluids plant = 5.82
FCI = $8,136,000
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• Fixed Capital Investment
• Income
14
• Income = Production Rate * Sales Price
Product: Flow (lbs/hr):Total
(lbs/c-yr): Cost ($/lb):Total Cost ($/c-yr):
Vinyl Acetate 7,144 60,008,000 0.97 58,208,000
* 60 million pounds per year = 30,000 tons per year
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• Fixed Capital Investment
• Income
• Expenses
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Raw Materials: Flow (lbs/hr): Start up (lbs/hr): Total (lbs/c-yr): Cost ($/lb): Total Cost ($/c-yr):
Acetic Acid 8,156 6,575 68,516,000 0.68 46,591,000
Ethylene 3,188 47,510 26,826,000 0.3725 9,993,000
Oxygen 4,263 0 35,810,000 0.05711 2,045,000
MEA 4,650 0 4,650 1.13 5,255
Glycerol 0 5,000 5,000 0.5 2,500
Total: 58,628,000
VCOP for Raw Materials = $58,600,00 / yr.
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Utility Use Price
Equipment Cold Water Steam Electricity Catalyst Dollars/yr. (odd yrs.) Dollars/yr. (even yr.)
Fixed Bed Reactor 1.59E+09 19670 1,590,000 1,885,000
Reboiler Absorber 2.13E+07 149,000 149,000
Distillation Column 1 3.06E+09 1.43E+08 4,063,000 4,063,000
Distillation Column 2 6.41E+08 3.73E+07 902,000 902,000
Distillation Column 3 1.42E+09 9.09E+07 2,143,000 2,143,000
E-100 5.72E+07 400,000 400,000
E-101 8.15E+08 815,000 815,000
E-102 6.32E+08 632,000 632,000
E-103 1.91E+09 1,906,000 1,906,000
Compressor 1 1.08E+07 1,731,000 1,731,000
Pump 1 1.34E+03 214 214
Total 14,332,000 14,627,000
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Operating Labor:
Labor Rate 60,000
Number of posts 3.8
Total Cost 684,000
Supervisory Labor:% of OL 25
Total Cost 171,000
Salary Overhead:
% of OL 50
% of SL 100
Total Cost 513,000
Maintenance:% of ISBL 4
Total Cost 179,000
Property Taxes:% of ISBL 1.5
Total Cost 67,000
Rent of Land/Building:%of FCI 1.5
Total Cost 122,000
General Overhead:
% of TL 65
% of maintanence 100
Total Cost 735,000
Allocated Environmental Charge:
% of FCI 1
Total Cost 81,000
Total FCOP: 2,552,00019
• CCOP = VCOP + FCOP
CCOP Odd yrs ($/yr.) 75,512,000
CCOP Even yrs ($/yr.) 75,807,000
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• Fixed Capital Investment
• Income
• Expenses
• Base Case Cash Flow Analysis
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Inputs Profitability MeasuresFCI = 8.14 $ ROI = - % avg. profit / TCIINC = 58.21 $/c-yr Payback Pr. = - years TCI / avg. ICF
EXP1 = 75.51 $/c-yr NPV (inf.) = -46 $ Sum DICF
EXP2 = 75.81 $/c-yr NPV (true) = -39 $ Sum DCCF
SV = 0 $ IRR (inf.) = 0 % if when NPV = 0
Tax Rate = 35 % IRR (inf.) = 0 % if = I + f + (I *f)Tax Credit = 0 % IRR (true) = 0 % I when NPV (true) = 0
MAR = 20 % B/C Ratio = - (DCCF from 1 to n)/-(DCCF at yr. 0)INFL = 3 % EUAW = -9 $/c-yr NPV (true)*(A/P, I,n)WC = 15 % of FCI
n = 10 yrs.m = yrs.
Depr. Met. 4 1=SL, 2=DDB, 3=SOYD, 4=MACRS, 5=MEX
year FCI WC INC EXP Depreciation Profit BFIT Tax ICF CCF DF DICF DCCF0 2.44 0 --- --- --- 0 0 -2 -2 1.000 -2 -21 4.07 0 0 0 1.16 -1.16 0 -4 -4 0.833 -3 -32 1.63 0 0 0 1.99 -1.99 0 -2 -2 0.694 -1 -13 --- 1.22 17.46 24.44 1.42 -8.40 0 -8 -8 0.579 -5 -44 --- 0 40.75 53.83 1.02 -14.10 0 -13 -12 0.482 -6 -65 --- 0 58.21 75.81 0.73 -18.33 0 -18 -15 0.402 -7 -66 --- 0 58.21 75.51 0.73 -18.03 0 -17 -14 0.335 -6 -57 --- 0 58.21 75.81 0.73 -18.33 0 -18 -14 0.279 -5 -48 --- 0 58.21 75.51 0.36 -17.67 0 -17 -14 0.233 -4 -39 --- 0 58.21 75.81 0 -17.60 0 -18 -13 0.194 -3 -3
10 --- -1.22 58.21 75.51 0 -17.30 0 -16 -12 0.162 -3 -2
Total 8.14 0 -46 -39
* All values in millions 22
• Vinyl Acetate prices affect NPV the most
• Ethylene prices affect NPV the least
-70
-60
-50
-40
-30
-20
-10
0
-20 -15 -10 -5 0 5 10 15 20
NPV ($MM)
% Change in Price
Acetic Acid
Ethylene
Vinyl Acetate
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• Vinyl Acetate formation produces a large amount of energy
• For Base Case, this energy is “swept” away by cooling water
• Steam could be created to use in other units throughout the plant
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Inputs Profitability MeasuresΔFCI = 0.00 $ ROI = - % avg. profit / TCI
ΔINC = 0.00 $/c-yr Payback Pr. = - years TCI / avg. ICF
ΔEXP = -2.32 $/c-yr NPV (inf.) = 3.63 $ Sum DICF
SV = 0 $ NPV (true) = 3.06 $ Sum DCCF
Tax Rate = 35 % IRR (inf.) = - % if when NPV = 0
Tax Credit = 0 % IRR (inf.) = - % if = I + f + (I *f)
MAR = 20 % IRR (true) = - % I when NPV (true) = 0
INFL = 3 % B/C Ratio = - (DCCF from 1 to n)/-(DCCF at yr. 0)
WC = 15 % of FCI EUAW = $0.73 $/c-yr NPV (true)*(A/P, I,n)
n = 10 yrs.
m = yrs.
Depr. Met. 4 1=SL, 2=DDB, 3=SOYD, 4=MACRS, 5=MEX
year FCI WC INC EXP Depreciation Profit BFIT Tax ICF CCF DF DICF DCCF
0 0.00 0 --- --- --- 0 0 0 0 1.000 0 0
1 0.00 0 0 0 0.00 0.00 0.00 0.00 0.00 0.833 0 0
2 0.00 0 0 0 0.00 0.00 0.00 0.00 0.00 0.694 0 0
3 --- 0.00 0.00 -1.10 0.00 1.10 0.38 0.71 0.65 0.579 0.41 0.38
4 --- 0 0.00 -2.56 0.00 2.56 0.89 1.66 1.48 0.482 0.80 0.71
5 --- 0 0.00 -2.32 0.00 2.32 0.81 1.51 1.30 0.402 0.61 0.52
6 --- 0 0.00 -2.32 0.00 2.32 0.81 1.51 1.26 0.335 0.50 0.42
7 --- 0 0.00 -2.32 0.00 2.32 0.81 1.51 1.23 0.279 0.42 0.34
8 --- 0 0.00 -2.32 0.00 2.32 0.81 1.51 1.19 0.233 0.35 0.28
9 --- 0 0.00 -2.32 0 2.32 0.81 1.51 1.16 0.194 0.29 0.22
10 --- 0.00 0.00 -2.32 0 2.32 0.81 1.51 1.12 0.162 0.24 0.18
Total 0.00 6.147379 3.63 3.06
* Incremental Analysis, all values in millions of dollars 25
• Acetic Acid accounts for more than half of the expenses
• Acetic Acid produced by Methanol Carbonylation
• Transfer Price based off of Methanol and Carbon Monoxide feedstock prices
• A transfer price of $ 0.30/lb. estimated
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Inputs Profitability MeasuresΔFCI = 0.00 $ ROI = - % avg. profit / TCI
ΔINC = 0.00 $/c-yr Payback Pr. = - years TCI / avg. ICF
ΔEXP2 = -26.09 $/c-yr NPV (inf.) = 28.41$ Sum DICF
SV = 0 $ NPV (true) = 23.24$ Sum DCCF
Tax Rate = 35 % IRR (inf.) = - % if when NPV = 0
Tax Credit = 0 % IRR (inf.) = - % if = I + f + (I *f)
MAR = 20 % IRR (true) = - % I when NPV (true) = 0
INFL = 3 % B/C Ratio = - (DCCF from 1 to n)/-(DCCF at yr. 0)
WC = 15 % of FCI EUAW = $5.54$/c-yr NPV (true)*(A/P, I,n)
n = 10 yrs.
m = yrs.
Depr. Met. 4 1=SL, 2=DDB, 3=SOYD, 4=MACRS, 5=MEX
year FCI WC INC EXP Depreciation Profit BFIT Tax ICF CCF DF DICF DCCF
0 0.00 0 --- --- --- 0 0 0 0 1.000 0 0
1 0.00 0 0 0 0.00 0.00 0.00 0.00 0.00 0.833 0 0
2 0.00 0 0 0 0.00 0.00 0.00 0.00 0.00 0.694 0 0
3 --- 0.00 0.00 -1.10 0.00 1.10 0.38 0.71 0.65 0.579 0.41 0.38
4 --- 0 0.00 -2.56 0.00 2.56 0.89 1.66 1.48 0.482 0.80 0.71
5 --- 0 0.00 -26.09 0.00 26.09 9.13 16.96 14.63 0.402 6.82 5.88
6 --- 0 0.00 -26.09 0.00 26.09 9.13 16.96 14.20 0.335 5.68 4.76
7 --- 0 0.00 -26.09 0.00 26.09 9.13 16.96 13.79 0.279 4.73 3.85
8 --- 0 0.00 -26.09 0.00 26.09 9.13 16.96 13.39 0.233 3.94 3.11
9 --- 0 0.00 -26.09 0 26.09 9.13 16.96 13.00 0.194 3.29 2.52
10 --- 0.00 0.00 -26.09 0 26.09 9.13 16.96 12.62 0.162 2.74 2.04
Total 0.00 56.07 28.41 23.24
* Incremental Analysis, all values are in millions of dollars 27
Inputs Profitability Measures
FCI = 8.14 $ ROI = - % avg. profit / TCI
INC = 58.21 $/c-yr Payback Pr. = - years TCI / avg. ICF
EXP1 = 53.95 $/c-yr NPV (inf.) = -4 $ Sum DICF
EXP2 = 54.25 $/c-yr NPV (true) = -3 $ Sum DCCF
SV = 0 $ IRR (inf.) = 9.51 % if when NPV = 0
Tax Rate = 35 % IRR (inf.) = 9.51 % if = I + f + (I *f)
Tax Credit = 0 % IRR (true) = 6.32 % I when NPV (true) = 0
MAR = 20 % B/C Ratio = - (DCCF from 1 to n)/-(DCCF at yr. 0)
INFL = 3 % EUAW = -1 $/c-yr NPV (true)*(A/P, I,n)
WC = 15 % of FCI
n = 10 yrs.
m = yrs.
Depr. Met. 4 1=SL, 2=DDB, 3=SOYD, 4=MACRS, 5=MEX
year FCI WC INC EXPDepriciati
on Profit BFIT Tax ICF CCF DF DICF DCCF
0 2.44 0 --- --- --- 0 0 -2 -2 1.000 -2 -2
1 4.07 0 0 0 1.16 -1.16 0 -4 -4 0.833 -3 -3
2 1.63 0 0 0 1.99 -1.99 0 -2 -2 0.694 -1 -1
3 --- 1.22 17.46 18.83 1.42 -2.79 0 -3 -2 0.579 -1 -1
4 --- 0 40.75 40.32 1.02 -0.59 0 0 0 0.482 0 0
5 --- 0 58.21 54.25 0.73 3.23 1 3 2 0.402 1 1
6 --- 0 58.21 53.95 0.73 3.53 1 3 3 0.335 1 1
7 --- 0 58.21 54.25 0.73 3.23 1 3 2 0.279 1 1
8 --- 0 58.21 53.95 0.36 3.89 1 3 2 0.233 1 1
9 --- 0 58.21 54.25 0 3.96 1 3 2 0.194 0 0
10 --- -1.22 58.21 53.95 0 4.25 1 4 3 0.162 1 0
Total 8.14 7.74 -3 -4
* All values in millions28
• Probability that the NPV will be greater than zero
• Flexible values are FCI, Expenses, and Income
RESULTS: MONTE CARLO METHOD NPV=BETA DISTRIBUTION
Mean NPV -23.25
Median -20.74
Standard Deviation 15.84
High Low
95.44% Confidence for NPV 15.07 -63.81
Confidence interval difference -24.90 -28.22
Probability NPV > 0 0.084 8.4 %
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Plant Production
Purity of 99.6%
Annual Production of 30,000 tons/yr
Profitability NPV of negative $39 MM
Optimized NPV of negative $4 MM
Risk Analysis
8.4% possibility of a positive NPV
30
Plant construction
Not recommended at current time
Changes needed for feasible plant
Acetic Acid costs fall
VAM sale prices increase
Less strict VOC’s regulations
Construct and produce overseas
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Busch, Chrapkowski, Kussow, and Ritthaler. “Design and Feasibility of Building a new Vinyl Acetate Monomer Production Plant in the United States.” Fictitious Chemical Company. March 19, 2010.
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