ebp 314 - a report on developing a ppd manufacturing plant (g3)
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POUR POINT DEPRESSANT (PPD) PLANT
1.0 ABSTRACT
PPD are used as lubricant additives for crude oils. In low temperature and winter
conditions, waxes in crude oils will deposited and congeal the pipelines and production
equipment during transportation and production. EXZA Company Sdn. Bhd. is producing
PPD for oils and gas industries to help these industries solve the problem of oils
transportation. This report details on the expansion of the chemical plant of EXZA Company
in order to incorporate new technology used to manufacture PPD. Organization chart of the
company is also included into this report. The report will be focused on the development of
new facilities to produce new type of PPD; namely the EVA-based aqueous PPD
dispersion. Details on the process, equipment and economy prospects were encrypted in
this report.
Keywords: crude oil, low temperature, PPD.
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2.0 INTRODUCTION
2.1 Company Profile
Name of company EXZA Company SDN. BHD
Business Type PPD manufacturer
Main Market Asia Pacific
Official Websites www.exza.com
Telephone Number +604 229 6141
Fax Number +604 229 1336
Address 12-03-C, Menara ABC, Jalan Sultan Ahmad Shah, 10150
Penang, Malaysia.
Date of Incorporation 23 March 2015
Company Registration No. 734113-P
Registered with Kementerian Kewangan Malaysia Government Bodies
(357 01011749)
No. of Employees 55
Tagline Extraneous Innovative Progressive
Vision To be viewed as the best PPD company in the world.
Mission We satisfy our customers by delivering results through
quality PPD and services. Our desire to grow drives our
passion to win in the marketplace. With a unified, low-cost
operating structure, well remain competitive across every
business and in every geographic region.
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2.2 Logistics
What is logistics? Logistics is the part of the supply chain process that plans,
implements and controls the efficient flow and storage of goods, services and related
information from the point of origin to the point of consumption, in order to meet the
customers requirements. Logistics industry is one of the catalysts for the development of
industrialization in Malaysia which is linked to the international trade. In Plant Design,
location or geographic of a plant is one of the very crucial factors to determine the
successful of any chemical business venture.
Based on few considerations, the ideal location of our plant is at Parit Buntar,
Perak. Figure 1 location of our plant. The details are displays in below:
Address: Lot 123, Jalan Perusahaan SatuDuaTiga, Kawasan Perusahaan Parit Buntar,
34200 Parit Buntar, Perak Darul Ridzuan, Malaysia.
Size: 87120 square feet (8093.7128 m2)
Cost: RM 4,500,000 = $1,230,147.41
There are many factors must be considered during selecting the desired plant site of
a plant. The location of plant should be:
Good access to liquids-rich natural gas resources, water, road and rail transportation
infrastructure
Be a good scope for plant expansion and a conducive environment, safe living
conditions for easy plant operation
A safe living conditions for plant personnel as well as the surrounding community
Power grids, economics, and sufficient acreage to accommodate facilities for a world-
scale petrochemical complex and potential future
Raw material availability: some of the raw materials required like Ethylene Glycol is in
the vicinity of the plant location. Besides, Parit Buntar is near to Penang jetty too which
it makes the transportation of raw material, equipment, and finish product more easy
and convenient.
Reasonable land price: after compare few industrial land in Parit Buntar, we found that
this land sell at the lowest price which is RM 40 per square feet. Table 1 displays the
land tax capacity and land tax effort indices by state governments in 2008. It can be
seen that Perak is having the moderate land tax capacity. This is beneficial for the
company future development.
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Good source of utilities
Excellent infrastructure and transportation: near to jetty, highway and railway.
Government incentives: Malaysia government encourages the establishment of more
new plant by giving special incentives. One of the incentives given is a 5 year
exemption on import duty. A company will be given the opportunity to apply for
Investment Tax Allowance (ITA). An allowance of 60% are given on its qualifying capital
expenditure (such as factory, plant, machinery or other equipment used for the
approved project) which incurred within five years from the date on which the first
qualifying capital expenditure is incurred. This exemption would help the company save
a lot of expenditure as most of our equipment are bought over from other country such
as China. Besides, from Malaysia Industrial Development Agency (MIDA), our
companies are eligible for Pioneer Status in which the company can offset this
allowance against 70% of its statutory income for each year of assessment. Any
unutilized allowance can be carried forward to subsequent years until fully utilized. The
remaining 30% of its statutory income will be taxed at the prevailing company tax rate.
In addition, when purchasing the land, 20-50% of discount is offered by the state
government base on the plant location, size of area, number of job created and value of
purchase. Another type of incentive given is the discount on monthly electrical bills for
the first 2 years.
Table 2.1: Land Tax Capacity Index and Land Tax Effort Index, 2008.
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Figure 2.1: Location of EXZA Sdn. Bhd.
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2.3 Organization Chart
Figure 2.2 shows the organization chart of EXZA Sdn. Bhd whereas Table 2.2
displays the project team for the PPD plant.
Figure 2.2: Organization Chart.
Table 2.2: Expansion project team.
Person Position/responsibilities
Ling Lee Ying Project Manager
Nurul Hamizah binti Mohd Nasir Technology Operations Manager
Jannatul Izzati binti Rajmi Finance Manager
Nur Syuhada binti Jamil Admin & Human Resources Manager
Asraff Raezar bin Ceanry Logistics & Distribution Manager
Shareholders
CEO
General Manager
Finance Department
Finance Marketing
Human Resources Department
Production Department
QC / R&D Department
Quality Control Research and Development
Engineering Department
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2.3.1 Support Group
Figure 2.3: The support group of EXZA Sdn. Bhd.
EXZA Sdn. Bhd. has recruited two specialists as consultants of the company to
address problems and improve organization results. The two specialists are from University
Sains Malaysia. Their duty is to overlook the entire project from the actual plant design to
the process flow of the manufacture. They able to help company achieve goals through
provide information, solve problems, realise latent opportunities, diagnose and refine
problems, recommend, implement, build consensus and commitment around corrective
action, and permanently improve organisational effectiveness.
2.4 Accreditations and Compliance Licenses & Acts
2.4.1 Accreditations
Table 2.3: Accreditations.
Type Accreditation
Quality Management System ISO 9001:2008
Occupational Health and Safety
Management Systems
OHSAS 1800:2007
Environmental Management System ISO 14001:2004
Project Consultants
Prof. Dr. Azlan b. Ariffin,
Universiti Sains Malaysia
Expertise: Plastic Technology Polymer Blending and
Modification
Dr. Zuratul Ain bt. Abdul Hamid,
Universiti Sains Malaysia
Expertise: Polymeric Dio Materials
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2.4.2 Compliance Licenses & Acts
Table 2.4: Compliance Licenses & Acts.
Activity Type of license/approval Approving authority
1. Registration Of:
(a) Company /Business
(a) Certification of Incorporation of
Company
Registry of Companies
(b) Certificates of Registration
of Business
Registration of Business
Office
2. Evaluation/Study On:
(a) Environmental
Impact
Approval on Environmental
Impact Assessment Report
[for 19 categories of
prescribed activities only as
stipulated in the
Environmental Quality
(Prescribe Activities)
(Environmental Impact
Assessment) Order 1987]
Department of
Environment
(b) Site Suitability
Approval on Site Suitability
Evaluation for non- prescribed
activities
Department of
Environment
3. Preliminary Licensing
All licenses Manufacturing License
Ministry of International
Trade and Industry
(Through MIDA)
4. Purchase Of Land For Industrial Purpose:
(a) Industrial Land -
Respective State
Government/ State
Economic Development
Corporation
(SEDC)/Regional
Development Authority
5. Building
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(a) Pre-construction:
i. Pollution
Control
Written Permission To
Construction Premises That May
Discharge Effluents
Department of
Environment
ii. Customs
Facilities
Licensed
Manufacturing
Warehouse
1. Licensed Manufacturing
Warehouse Licence.
2. Excise Manufacturing Licence
Royal Customs and
Excise Department
iii. Building Plans
Approval for Building Plans (other
plans to be submitted with
application:
Key Plan
Layout Plan
Elevation Plan for front, back
and side view of building
Details on open space
Plan on septic tank/sewerage
Plan on pipe installation
Plan on land works and
infrastructure
Respective Local
(b) During Construction
i. Construction
Works
1. Notice to Start Work and Date
of Completion.
2. Temporary Permits for
Construction Works such as:
Construction of a
Contractors workshed and
store-shed;
Construction of roadside
scaffolding;
Construction
platform/structures;
Construction on fencing
along the road; and
Depositing building materials
by the road.
3. Permit to remove sand/stone
Materials
Authorities
Respective District Land
Office
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ii. Temporary
Supply of
Utilities
Approval for Temporary Supply of
Utilities to the Project Site
Tenaga Nasional Berhad
Water Supply Department
iii. On Completion
of Construction
1. Letters of Certification from
respective technical
departments
2. Certificate of Fitness
Fire Services Department
Tenaga Nasional Berhad
Telekom Malaysia Berhad
Water Supply Department
iv. Premises for
Operating
Trade/Industries
1. Premises Licence for
trade/industry.
2. Approval for Sign
Boards/Advertisement Sign
Respective Local
Authorities
Respective Local
Authorities
v. Factory
Inspection Factory Inspection Report
Department of
Occupational Safety and
Health
6. Utilities
(a) Electricity
1. Approval for electricity supply.
2. Approval for construction of
electricity sub-station
3. Approval Install Standby
Generator.
4. License to Generate, Transmit
or Distribute Energy From any
Installation.
TenagaNasionalBerhad
TenagaNasionalBerhad
Department of Electricity
Supply
Department of Electricity
Supply
(b) Water Supply Approval for water supply Waterworks Department
(c) Telecommunication Approval for telephone lines Telekom Malaysia Berhad
7. Manpower
(a) Employment of
Workers
1. Permit allowing employers to
keep Employees Register in
the Companys Headquarters
2. Registration of workers with the
Employees Provident Fund
(EPF)
3. Registration of employees with
Social Security Organisation
Labour Department
(b) Limit of Working
Hours
1. Permit to exceed the limit of
working overtime Hours
2. Permit to vary hours of works
3. Permit to allow women working
at night
Employees Provident
Fund
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(c) Industrial Hygiene
Approval for of competent person/
Hearing Protectors/Breathing
Apparatus/Sound Level Meters
/Audiometric Silent Booth
Department of
Occupational and Health
8. Machinery And Equipment
(a) Commissioning and
Operation of
Certificated Machinery
Certificate of Fitness for Certificate
Machinery
Department of
Occupational Safety and
Health
9. Pollution Control
1. Written approval for installation
of incinerator, fuel burning
equipment and chimney
2. License to occupy and operate
prescribed premises
3. Written permission to increase
production capacity of
factory/plant
Department of
Environment
10. Transportation By:
(a) Land
1. Licence for commercial
vehicles
2. Driving licence for goods
vehicle
Commercial Vehicles
Licensing Board
Road Transportation
Department
(b) Sea
1. Notification of port entry and
port clearance
2. Port conveyance permit
3. Certificate to carry dangerous
goods
Respective Port Authority,
Royal Customs and
Exercise Department
11. Import And Export
(a) Import of Prohibited
Goods
Import licence for goods specified
in Customs (Prohibited of Imports)
Order 1988
Ministry of International
Trade and Industry and
other Ministries,
Departments or Statutory
Bodies appointed by the
Director General of
Customs
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(b) Export of
Prohibited Goods
Export Licence for goods specified
in Customs (Prohibition of Exports)
Order 1988
Ministry of International
Trade and Industry and
other Ministries,
Departments or Statutory
Bodies appointed by the
Director General of
Customs
12. Market
Sales Tax Licence
Royal Customs and
Exercise Department
13. Intellectual/Industrial Property And Consumer Protection
(a) Patent Certificate for Grant of a Patent
Ministry of Domestic
Trade and Consumer
Affairs
(b) Copyright Copyright Approval
Ministry of Domestic
Trade and Consumer
Affairs
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3.0 PRODUCT SPECIFICATIONS
Pour point depressant (PPD)
Our company excels in manufacturing EVA-based PPD for many years. The PPD
produced are of dispersion type and based on ethylene vinyl acetate (EVA) copolymer of
specific range of vinyl acetate content. Below is the technical specification of the PPD
produce by EXZA Company.
Table 3.1: Characteristic of PPD produced by EXZA Company
Product name EXZA 28
Appearance and color Pale yellow liquid
Physical state Aqueous dispersion
Flash point (ASTM D92) >45oC
Pour point (ASTM D97)
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4.0 FEEDING MATERIAL
4.1 Formulation
Table 4.1: Formulation of PPD.
Materials Percentage (wt%)
Polymer resin EVA 30
Dispersing agent Sodium oleate 3
Solvent 2-Ethylhexanol 40
Stabilizing agent Ethoxylated Nonylphenol 2
Antifreezing agent Ethylene Glycol 25
Medium Water
4.1.1 Polymer Ethylene Vinyl Acetate (EVA)
Figure 4.1: The structure of EVA copolymer
EVA is a copolymer of ethylene and vinyl acetate. The two key parameters that
determine their properties are weight percent vinyl acetate in the copolymer and melt index
(MI). As more vinyl acetate (VA) is added to the polymer, it disrupts the polyethylene
crystallinity, which in turn lowers the melting point, modulus, and hardness. The VA makes
the polymer more polar, which improves adhesion to polar substrates and aids in solubility.
In the case of application of EVA as pour point depressant of crude oil, a specific
value of VA content and melt index are required in order to increase its efficiency during the
injection. Table 4.2 shows the characteristic of EVA used in the formulation of PPD
aqueous dispersion in EXZA Company.
The EVA copolymer resins used in manufacturing of aqueous PPD dispersion in
EXZA Company comes in the form of small, free flowing pellets. At ambient temperature,
the EVA resins are quite inert, and resistant to attack by most aqueous acids and bases.
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The EVA resins used have a maximum handling temperature of 230oC. If exposed
to elevated temperature, EVA resin may undergo thermal degradation; in which it will
release fumes consist of possible decomposition product such as acetic acid, carbon
monoxide and acrolein which are highly toxicant. However, in the case of the processing
temperature applied during the manufacturing process which is of range 150 to 160oC
we believe this hazardous condition can be easily avoided.
Table 4.2: Properties of EVA used in EXZAs PPD formulation.
Ethylene vinyl acetate copolymer (EVA)
Vinyl acetate (VA) content 26 32%
Melt Index (ASTM D1238, 190oC/2.16 kg) 5 150 g/10 min
Mol. Weight 1000 - 2900
Melting point (DSC) 63 74oC
Density 0.948 0.957 g/cm3
Max. processing temperature 230oC
Recommended dosage 30 55 wt.%
4.1.2 Solvent 2 ethylhexanol
Figure 4.2: The structure of 2 ethylhexanol
2-ethylhexanol is an eight-carbon branched chain O-X-O alcohol having a high
boiling point and slow evaporation rate. It is a versatile solvent featuring excellent reactivity
as a chemical intermediate. It has low water miscibility and appears as colorless liquid -
functions as solvent in order to aid the melting process of EVA copolymer resins during the
manufacture of aqueous PPD dispersion. It also acts as the main dispersing medium which
will later diluted by the addition of water in order to reduce the overall cost of PPD
produced.
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Table 4.3: Properties of solvent used in EXZAs PPD formulation.
2-ethylhexanol
Appearance Colorless liquid
Boiling point 182 186oC
Melting point -76oC
Specific gravity (at 20oC) 0.83
Max. handling temperature 367oC
Recommended dosage 30 65 wt.%
2-ethylhexanol is immiscible (disperse) to EVA. This property will lead to a better
cold flow dispersion emulsion where the PPD is suspended as micrometer sized solid
particles in an aqueous-based alcohol (OH) carrier fluid; whereby it is suit to be applied at
temperature of -20 to -40C. Besides, this solvent was found suitable to be use in our PPD
formulation due to its higher boiling point that easily surpasses the processing temperature.
This will ensure the solvent can maintain its liquid state during the processing.
4.1.3 Dispersing agent Sodium Oleate
Figure 4.3: The structure of Sodium Oleate
Sodium oleate is the sodium salt of oleic acid, a monounsaturated fatty acid used as
anionic surfactant and emulsifier inside the PPD manufacturing process. It is mainly used
as agent to disperse the non-soluble ingredients inside the medium of the aqueous PPD
dispersion. As such, there are some requirements needed in order to achieve its maximum
effect, as listed in Table 4.4 below.
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Table 4.4: Properties of dispersing agent used in EXZAs PPD formulation.
Sodium Oleate
Appearance White to yellowish
Melting point 232 235oC
Specific gravity (at 20oC) >1.1
Recommended dosage
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4.1.5 Stabilizing agent Ethoxylated Nonylphenol
Ethoxylated Nonylphenol is a non-ionic surfactant used as stabilizing agent inside
the aqueous PPD dispersion manufactured by EXZA Company. It functions as agent to
stabilize the whole dispersion system of the product across a broad spectrum of conditions.
It also provides shear stability protection to allow the product to be transferred via a number
of different pumping systems, as well as maintain its stability during transportation period.
Table 4.6: Properties of stabilizing agent used in EXZAs PPD formulation.
Ethoxylated Nonylphenol
Appearance Pale yellow liquid
HLB 8.9
EO content (mol) 4
Pour point -28oC
Flash point (ASTM D93, CC) 238oC
Density (20oC) 1.027 g/ml
Recommended dosage
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In EXZA Company aqueous PPD dispersion formulation, water is used as
secondary medium of dispersion, due to the purpose of diluting the main dispersing
medium; 2-ethylhexanol. This step is essential in order to reduce material cost and
consumption, as well as to reduce the toxicity of the product produced.
4.2 Material shelf life and quality assurance
EXZA Company concerned about quality. Thus, the shelf life and quality of each raw
material received by our supplier was strictly taken into account. Table 4.7 shows the
durable time and proper storage handling for each raw material. This information is
important in order to keep tab on our feeding material supply and helps estimate the
production capability during peak time.
Table 4.7: the durable time and storage handling for each raw material
Material Shelf life
(months) Storage handling
EVA 24
Temperature : 21 - 32oC
Condition: 50% relative humidity, out of direct
sunlight
Remarks: Avoid contamination at all cost
Sodium Oleate 6-12
Temperature: -20C (Store under inert gas)
Condition: Dry and well-ventilated
Remarks: Air and light sensitive
2 Ethylhexanol 60
Temperature: 21 - 25oC
Condition: Dry, cool, and well ventilated place
Remarks: Keep away from source of ignition
Ethoxylated
Nonylphenol 60
Temperature: < 40C
Condition: Avoid contact with acids and bases
Remarks: High irritation upon contact
Ethylene
Glycol 18-19
Temperature: < 40C
Condition: Well-ventilated, away from sunlight
Remarks: Keep away from source of ignition
Avoid contamination at all cost
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Upon the arrival of raw material in the facility, few tests need to be run in order to
ensure we received the right material according to the requirement listed for processing.
This step is important in order to avoid faults and contamination during the storage and
processing period, as well as it serves as proves in case if any misunderstanding happens
with the contracted supplier. Table 4.8 listed the necessary test need to be run during QA
analysis of the raw materials.
Table 4.8: Test aspects and method for QA analysis
Material Aspects Testing method
EVA VA content FTIR
Melt Index ASTM D1238 (190oC/2.16 kg)
Sodium Oleate Purity Gas Chromatography
2 Ethylhexanol Purity Gas Chromatography
Ethoxylated
Nonylphenol
Purity Gas Chromatography
EO content ASTM D2959-95
Ethylene Glycol Purity Gas Chromatography
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4.3 Material costing and suppliers
There are few suppliers of materials that EXZA has list out. The selected suppliers
were shown and bolded in Table 4.9. The criteria during selecting suppliers are mainly
based on price offered while keeping tab on the quality at our acceptable range. The other
companies listed serves as back up if problem arises with the current suppliers.
Table 4.9: Suppliers list and cost of materials
Materials Suppliers
EVA (32)
Polytechnology & Net
Gbmh
USD1700-2500
Lanzhou Qianmiaonuo
Trading Co., Ltd
USD2100-4000
Usi Corporation
USD2200-4000
EVA (28)
Dalian Bona Biological
Co., Ltd
USD800-2000
Usi Corporation
USD800-2500
Xinji City Changxing
Plastic Machine Factory
USD900-3400
EVA (26)
Xingtai City Litang
Commercial & Trading
Co., Ltd
USD700-2250
Quanzhou Donging
Material Co., Ltd
USD800-2600
Dalian Bona Biological
Technology Co., Ltd
USD1400-1700
Sodium Oleate
Shanghai Yuanye
Biological Technology
Co., Ltd
USD23
Shanghai Macklin Co.,
Ltd
USD57
Shanghai Taitan
Technology Co., Ltd
USD79
2 Ethylhexanol
Beijing Huamaoyuan
Fragrance Flavor Co.,
Ltd
USD1-9 (kg)
Zheng Zhou Yi Bang
Industry Co., Ltd
USD1-4.5 (kg)
Haihang Industry Co.,
Ltd
USD1-10 (kg)
Ethoxylated
Nonylphenol
Shijiazhuang City
Horizon Chemical
Industry Co., Ltd
USD1500-2000
Jilin Zhongxin
Chemical Group Co.,
Ltd
USD1800-2100
Sterling Auxiliaries Pvt.
Ltd.
USD2000-2400
Ethylene glycol
Hebei Eminent
Chemical Technology
Co., Ltd
USD600-750
Shijiazhoung Yibell
Technology Co., Ltd
USD900
Lanzhou Qianmiaonuo
Trading Co., Ltd
USD1000-1500
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5.0 PROCESSING SYSTEM
5.1 Process description
Figure 5.1 shows the process flow diagram of the production of EVA-based PPD.
The process incorporate in this facility is a new technology of mixing, namely 2 step
process mixing. This technology shortens the mixing time by opting out melt kneading
process; in which usually used in order to prepare any type of dispersion.
The process of preparing the EVA-based PPD dispersion begins by melting the
copolymer of EVA inside the mixing vessel, aided by using 2-ethylhexanol as the main
solvent. This process is carried out at elevated temperature suitable with the standard
melting point of EVA copolymer used.
Upon the completion of melting process, the temperature of process is brought
down to 70oC in order to avoid any ignition during the addition of dispersing and stabilizing.
After another several minutes of mixing, a mixture of ethylene glycol and water of specific
ratio are added inside the vessel, and the mixing process continues until it achieves
homogenization. Note that the mixture of ethylene glycol and water was mixed beforehand,
and added inside the mixing vessel as soon as the heating system is turned off.
When the PPD dispersion inside the mixing vessel achieves desired
homogenization, it is then transported to the PPD storage tank according to the respective
grade produced. During this transportation process, the mixture will pass through an in-line
mixer for particle size reduction purposes. This is to increase the effective rate of the PPD
produced and keep the dispersion stable for longer storage duration.
During the entire process operation, a suitable heating and cooling system are used.
Proper safety system is being implemented in order to constantly monitor the hazard and
risk present during the process. Cleaning and maintenance are carried with strict schedule
in order to contain and avoid any risk of accident occurring inside the facility. Waste
treatment system is also incorporated inside the plant in order to maintain a pollution-free
environment.
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Figure 5.1: Process flow diagram of PPD production (by batch)
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Figure 5.2: Generated 3D layout of major unit operations
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5.2 Standard operation procedure
The mass flow rate of each component is set according to Table 5.1 as well as the pre-
determined temperature for the mixing process. Next, the procedures of operations are as
follows:
1. The addition of solvent into the mixing vessel by releasing the valve incorporated
inside the pipeline. On the same time, switch on the vacuum conveyer in polymer
feeding system.
2. The heater is switch on at 10oC/min heating rate. On the case of desired loading
and melting temperature of 150oC is achieved, the mixer was then turned on and
the melting process occurs for 1 hour.
3. Upon approaching the end of melting process, the temperature is renewing to 70oC
at cooling rate of -10oC/min. After approximately 10 minutes, both dispersing and
stabilizing agent are added into the mixing vessel by releasing the valve
incorporated inside the pipeline and mixing process continues for another 15
minutes.
4. At the same time of the start of cooling process, the pre-mixing process of EG and
water will occur in different vessel. Both component are added inside the vessel by
releasing the valve incorporated inside the pipeline at the given flow rate (refer
Table 1). The mixing temperature inside this vessel is set to follow the standard
room temperature (according to country climate).
5. After approximately 30 minutes since the start of cooling process, the EG and water
mixture is added inside the main mixing vessel and the mixing process continues for
another 20 minutes. Note: The heater is turned off at this point allowing the mixture
to cool down to room temperature.
6. The mixer is then turn off and the valve is open to allow PPD transportation into
storage tanks. During this step, the product will pass through the in-line mixer
incorporated along the pipeline system for particle size reduction purposes.
7. The PPD mixture that passed the QC inspection will later be stored inside the
storage tank before proceed to packaging line.
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Table 5.1: Mass flow rate initiated for optimum production of 3000 kg of EXZA 28
Materials Pathway Mass
(kg)
Mass
flow rate
(kg/min)
Time (minutes)
Addition Mixing
EVA
Addition from
storage tank to
main mixing vessel
900 60
15 60
2-ethylhexanol 1200 80
Sodium Oleate 90 18
5 15 Ethoxylated
Nonylphenol 60 12
Ethylene Glycol Addition from
storage tank to pre-
mixing
375 37.5
10 20
Water 375 37.5
EG + Water
(1:1)
Addition from
storage tank to
main mixing vessel
750 75 10 20
PPD
Pumping out from
main mixing vessel
to storage tank
3000 100 30
5.3 Process cycle
Figure 5.3: The process cycle for optimum production of PPD
Manufacturing of PPD dispersion in this company can achieve up to 36 tons per day
in an optimum runs. The production capability of our company ranging from 2-4 tons/cycle;
6 cycles/day and runs in two separate production lines. EXZA Company operates on
weekly basis of 5 days operations and 2 days off for maintenance and inspection purposes.
Upon receiving a large number of demands, the production capability can be
increased up to 48 tons/day without affecting the efficiency of the process.
3 hours
(3 tons production)
1 hour
(Cleaning)
3 hours
(3 tons production)
1 hour
(Cleaning)
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Figure 5.4: The allocated time duration for each processing step
5.4 Waste treatment
In terms of waste, the production of EVA-based PPD dispersion is expected to
produce zero chemical by-products. However, in case of accidental or damage product, the
disposal of the said PPD should be strictly taken care of.
In terms of contamination or leaking, the product must be disposed or incinerated in
accordance with local regulations. Disposal of said PPD are usually handle by licensed
waste disposal contractor due to its non-recyclable nature and toxicity upon contact.
Next, although the heat release during process cant be count as waste, it still
counts as by-products. These heat generated are used for energy recovery system in order
to minimized the cost used to power up the whole facility.
Due to extensive usage of water inside the PPD manufacturing process, EXZA had
developed an additional system for water waste treatment. In this part of the plant, waste
water is collected and transferred into multiple condensers in order to separate the waste
substances from it. This treated water is then can either be reused for other purposes or
released out of the plant through the drainage system.
Addition of EVA & solvent
(15 mins)
Heating to 150oC
(15 mins)
Melting process
(60 mins)
Cooling to 70oC
(10 mins)
Addition of stabilizing & dispersing agent
(5 mins)
Mixing
(15 mins)
Addition of EG & water
(10 mins)
Mixing
(20 mins)
Transport to storage
(30 mins)
Total duration per cycle = 180 minutes / 3 hours
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6.0 Processing equipment and sizing
According to the process flow diagram (PFD) in the Figure 5.1 above, it shows the
equipment needed in order to complete the process of the PPD. This report intends to deal
with specific information of continuous PPD manufacturing process and a production unit to
produce optimum 36 tons per day by 2 production line of PPD product. In order to produce
the PPD product, the equipment is classified into unit operations that consist of important
equipment.
1. The storage tanks of the feeding material and PPD product
2. The mixing vessel unit
3. The In-line mixer unit
4. The piping system
6.1 The storage of the feeding materials and PPD product
All raw materials are brought on site and stored in warehouse then transfer to the
storage tank. Storage tanks used in PPD manufacturing process normally is stainless steel
and carbon steel material. This is to prevent the raw material has chemical reaction with the
storage tanks which will affect the properties of the final product. The storage tank that
been use are actually consist of several type, this is due to the type material that been
stored in the storage tank (refer Figure 5.1). The storage tanks of the raw material consist
of 6 type of storage tank which is:
A. The polymer (EVA) silo storage tank
B. The solvent storage tank
C. The dispersing agent storage tank
D. The stabilizing agent storage tank
E. The anti-freezing storage tank
F. The PPD storage tank
In order to solve the problem of flow rate of the EVA feeding process, the
gravitational system is used due to its efficiency and superior economical aspect. Thus,
below are the properties of all the storage tank that been used during the manufacturing of
the PPD product. All of the storage tank for liquid form of the raw materials such as the
solvent, dispersing agent, stabilizing agent and anti-freezing agent are been stored in the
same type of storage tank but in different of size and the capacity of the tank.
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29
A. EVA silo storage tank
Figure 6.1 shows the EVA storage tank used for the PPD manufacturing. The
storage tank use to store EVA is named as silo tank; which is suitable for storing bulk
materials. Silo tank used in PPD manufacturing are made from stainless steel to prevent
chemical reaction occur during storage time. Table 6.01 shows the specification of the silo
tank. Silo tank actually been closed at the top of the tank, this is because the safety
precaution that must be follow in order to avoid contamination and any problem occurs
during the manufacturing. EVA is in the solid form of material and cannot be expose to
direct sunlight as it may reduce its properties and may produce hazard.
Figure 6.1: EVA Silo tank
Loading EVA into silo tank can be carried out by the drivers themselves with
automatic loading end when the nominal value is reached. This can be seen from Figure 6;
whereby the EVA is transport from the warehouse by lorry and pumped into the silo tank.
Silo tank will be place at 45o above the mixing tank in order to transfer the EVA into
the mixing tank. This is to solve the difficulties faced during the feeding of the EVA which
comes in solid form; by using gravitational system of silo tank so that the flow rate of EVA is
mainly aided by gravity. This method contributed to reduction of cost of overall polymer feed
system due to lesser energy consumption and accurate control system.
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30
Figure 6.2: Silo tank of the EVA feeding system.
Table 6.01: The specification of EVA Silo tank
Equipment name: Silo Tank
Identification:
Item No
Supplier
Price
M101
Taian Luqiang Metal Vessel Co., Ltd.
US $ 10000
Function: Structure for storing bulk materials Design Data:
Orientation Vertical
Tank Height 3.92m
Tank Diameter 2.61m
Material Construction Stainless Steel 316L
Conveyor Materials Galvanized sheet metals
Dimension 120cm X 75cm X 120cm
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B. The solvent storage tank
Figure 6.3 shows the storage tank for solvent. Solvent used to produce PPD is 2-
ethylhexanol. Table 6.02 shows the specification of the solvent storage tank.
Figure 6.3: Solvent storage tank
Table 6.02: The specification of solvent storage tank
Equipment Name : Solvent storage tank
Identification:
Item No
Supplier
Price
T 101
Taian Luqiang Metal Vessel Co., Ltd.
US $ 10000
Function: To store solvent
Design Data:
Orientation Vertical
Functional Height 4.63 m
Recommended Diameter 3.09 m
Designated Volume
Maximum Storage Volume
34.66 m3
28.88 m3
Designated Pressure
Designated Shell Thickness
0.196 N/mm2
1.74 mm
Material of Construction Carbon Steel A516 Grade 70
Tolerances
Standard
Rules of thumb
API 650
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C. Dispersing agent storage tank
Dispersing agent used to produce PPD is sodium oleate. Storage tank for sodium
oleate is made from carbon steel which same as solvent storage tank showed in Figure 6.3
but the size of storage tank is different. Table 6.03 shows the specification of the solvent
storage tank.
Table 6.03: The specification of the dispersing agent storage tank.
Equipment name : Dispersing agent storage tank
Identification:
Item No:
Supplier:
Price:
T102
Guangdang Dafang Weiye Steel Structure
Engineering Co., Ltd.
.US $ 6000
Function: To store Dispersing agent
Design Data:
Orientation Vertical
Functional Height 1.51 m
Recommended Diameter 1.0 m
Designated Volume
Maximum Storage Volume
1.19 m3
0.99 m3
Designated Pressure
Designated Shell Thickness
0.169 N/mm2
0.49 mm
Material of Construction Carbon steel A516 gr 70
Tolerances
Standard
Rules of thumb
API 650
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33
D. The stabilizing agent storage tank
Stabilizing agent used to produce PPD is ethoxylated nonylphenol. Storage tank for
ethoxylated nonylphenol is made from carbon steel which same as solvent and dispersing
agent storage tank showed in Figure 6.3 but the size of storage tank is different. Table 6.04
shows the specification of the stabilizing agent storage tank.
Table 6.04: The specification of the stabilizing agent storage tank.
Equipment name : Stabilizing agent storage tank
Identification:
Item No: T103
Supplier: Guangdang Dafang Weiye Steel Structure
Engineering Co., Ltd.
Price: US $ 6000
Function: To store stabilizing agent
Design Data:
Orientation Vertical
Functional Height 1.42 m
Recommended Diameter 0.94 m
Designated Volume
Maximum Storage Volume
0.99 m3
0.83 m3
Designated Pressure
Designated Shell Thickness
0.17 N/mm2
0.46 mm
Material of Construction Carbon Steel A516 Grade 70
Tolerances
Standard
Rules of thumb
API 650
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E. Anti-freezing storage tank
Anti-freezing agent used to produce PPD is ethylene glycol. Storage tank for
ethylene glycol is made from carbon steel which same as solvent, dispersing agent,
stabilizing agent storage tank which showed in Figure 6.3 but the size of storage tank is
different. Table 6.05 shows the specification of the anti-freezing agent storage tank.
Table 6.05: The specification of the anti-freezing agent storage tank.
Equipment Name: Anti-freezing Storage Tank
Identification:
Item No
Supplier:
Price:
T104
Taian Luqiang Metal Vessel Co., Ltd.
US $ 6000
Function: To store anti-freezing agent
Design Data:
Orientation Vertical
Fluid Ethylene glycol
Functional Height 4.39 m
Recommended Diameter 2.93 m
Designated Volume
Maximum Storage Volume
29.53 m3
24.61 m3
Designated Pressure
Designated Shell Thickness
0.211 N/mm2
1.77 mm
Material of Construction Carbon Steel A516 Grade 70
Tolerances
Standard
Rules of thumb
API 650
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F. PPD storage tank
In the finishing process, PPD is been stored in the PPD storage tank which showed
in Figure 6.4. Table 6.06 is the specification of storage tank of PPD product.
Figure 6.4: The storage tank of the PPD product
Table 6.06: Specification of storage tank of PPD product
Equipment name: Pour Point Depressant storage tank
Identification:
Item No:
Supplier:
Price:
T105
Taian Luqiang Metal Vessel Co., Ltd.
US $ 15000
Function: To store pour point depressant
Design Data:
Orientation Vertical
Functional Height 6.79 m
Recommended Diameter 4.52 m
Designated Volume
Maximum Storage Volume
109.09 m3
90.91 m3
Designated Pressure
Designated Shell Thickness
0.234 N/mm2
3.66 mm
Material of Construction Stainless Steel 304 L
Tolerances
Standard
Rules of thumb
API 650
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36
6.2 The mixing vessel unit
During the manufacturing of PPD, homogenizing vessel is used in order to melt the
EVA and mixed the entire ingredient needed to form the product. Thus, several type of the
mixing vessel has been selected and went through the preliminary process in order to
determine which one is suitable for our process.
EXZA Company had chosen mixing vessel produced by Foshan JCT Machinery
Co., Ltd. This is because the specification and the quality of the vessel are on par with our
requirement as its price is also cheaper compared to the others.
Furthermore, the mixing process need to be done in certain temperature and
pressure; which we found that this type of homogenizing vessel is easy to deal with the
temperature problem and control. Below are the picture of the mixing vessel that been
choose in order to mix the ingredient and to manufactured our PPD product.
Figure 6.5: Homogenizing vessel
Referring to the Figure 6.5, the mixing tank is of simple design and consists of rotor
which comes in layer. This plays an important role in mixing in order to achieve the best
quality of our product. Below are the properties and the specification of the mixing vessel
that has been chosen by our company.
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Table 6.07: Specification of mixing vessel
Equipment name: Homogenizing vessel
Identification:
Item No:
Supplier:
Price:
R101
Foshan JCT Machinery Co., Ltd.
US $ 13500
Function: To mix all reactants to produce pour point depressant
Operation: Batch
Design Data:
Orientation Vertical
Fluid PPD material
Functional Height
Height of Cylinder
Height of Torispherical Head
Recommended Diameter
2.47 m
0.99m
0.74 m
1.65m
Vessel Volume
Designated Vessel Volume
Designated Pressure
Designated Shell Thickness
Operating Temperature
Number of Impeller
Type of Impeller
Size of Impeller
Impeller Location
Material of Construction
4 m3
4.8 m3
3000 psi
0.17 m
150 -160oC
1
Rotor/Stator
Diameter (0.41 m) and Width (0.21 m)
0.41 m liquid level off the bottom of vessel
Stainless Steel 304 H
Utilities Cooling Jacket is used to surround the vessel
Tolerance
Standard
Rules of thumb
ASTM/ASME: UNS S30409
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6.3 In-line mixer
During manufacturing of PPD, the size particle of PPD during mixing process inside
the homogenizing vessel is big. This is because the solvent and the EVA does not yet
completely dispersed, thus the reduction of the particle is needed in order to reduce of the
particle size of the EVA and other material. This reduction in particle size also important in
order to make sure the stability of our product is in the good condition.
To reduce the particle size, In-line mixer is used in order to get more nano-particle
of our final PPD product and save time. High Shear In-Line mixers are supremely efficient
and rapid in operation and are capable of reducing mixing times by up to 90%.
The high-speed rotation of the rotor blades within the precision-machined mixing
workhead exerts a powerful suction, drawing liquid and solid materials into the rotor/stator
assembly. Centrifugal force then drives the materials towards the periphery of the workhead
where they are subjected to a milling action in the precision-machined clearance between
the ends of the rotor blades and the inner wall of the stator.
This is followed by intense hydraulic shear as the materials are forced, at high
velocity, out through the perforations in the stator, then through the machine outlet and
along the pipework. At the same time, fresh materials are continually drawn into the
workhead, maintaining the mixing and pumping cycle. Figure 6.6 shows the In-line mixer
used.
Figure 6.6: In-line mixer
There are many type of In-line mixer in the market nowadays. However the In-line
mixer produced by Silverson has been selected by our company. Below is the specification
of the In-line mixer used by EXZA Company.
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Table 6.08: Specification of In-line mixer
Equipment name: In-line mixer
Identification:
Item No:
Supplier:
Price:
R102
Silverson
US $ 25000
Function: To reduce the size of PPD.
Design Data:
Orientation
Pressure
Mass Flow rate
Interaction Chamber Material
Plunger Material
Enclosure
Drive Method
Product Pressure Gage
Tolerances
Standard
Vertical
30000psi
1714.29kg/h
Diamond
Zirconia Ceramic
Stainless Steel
Electric
Mechanical
Rules of thumb
M700
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6.4 Piping system
There are 2 types of pipes used in the manufacturing PPD product which are
stainless steel pipe and carbon steel pipe. Table 6.09 shows the quantity of pipe use, price
and the supplier. Table 6.10 shows the different type pipe used in different storage tank.
Table 6.09: Quantity of pipe use in PPD plant
Type of Pipe Quantity Price
(m/USD) Company
Carbon Steel 57m 9 Tianjin Wanlei Steel Pipe Co., Ltd.
Stainless Steel 62m 12.84 Wuxi Shengshida Special Steel Co., Ltd.
Table 6.10: Type of pipe used in different material storage tank and cost
Material Type Of Pipe Pipe Length (m) Pipe Cost
(USD)
2-Ethylhexanol Carbon Steel 12 108
Sodium oleate Carbon Steel 13 117
Ethoxylated Nonylphenol Carbon Steel 15 135
Ethylene Glycol + Water Carbon Steel 17 153
EVA Stainless Steel 15 192.6
PPD Stainless Steel 15 192.6
Cooling and Heating System Stainless Steel 32 410.88
Total pipe cost (USD) 1309.08
In the piping system, there are equipment incorporated which plays an important
role in transporting and controlling the material flow centrifugal pump and valve.
Centrifugal pump help to pump the raw material of PPD from storage tank of feeding
material to the mixing vessel and later, towards the storage tank of PPD by pressure. The
valve is to control the amount of the feeding material allowed to flow inside the pipeline.
Table 6.11 shows the specification of centrifugal pump.
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Table 6.11: specification of centrifugal pump
Equipment Specification
Centrifugal pump:
Figure 6.7 : Centrifugal pump
Required no. = 7 unit
Design Data:
Operation : batch
Type : centrifugal
Operating Temperature: 33oC
Density : 813.60 kg/m3 Mass Flow rate : 360 kg/h Volumetric Flow rate : 0.65 m3/h Efficiency : 65 % Price: US $ 6000
Valves are a mechanical device that controls the flow and pressure within a system
or process. They are essential components of a piping system that conveys liquids, gases,
vapours, slurries etc. The function of valve are stopping and starting flow, reduce or
increase a flow, controlling the direction of flow, regulating a flow or process pressure and
relieve a pipe system of a certain pressure. Figure 6.8 and 6.9 show the butterfly and globe
valve. Table 6.12 shows the valve used in PPD plant.
Figure 6.8: Globe valve Figure 6.9: Butterfly valve
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Table 6.12: Type of valve used in PPD plant.
Materials Valve Type Mass Flow
rate (kg/min)
Mol. Fraction, mol
Price (US $)
EVA Butterfly 60 0.25 200
1-Hexanol Butterfly 80 0.61 187
Sodium oleate Butterfly 18 0.01 148
Ethoxulated
nonylphenol Butterfly 12 0.01 148
Ethylene glycol Globe 37.5 0.61 126
Water Globe 37.5 - 126
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7.0 SAFETY SYSTEM
All manufacturing processes are to some extent hazardous, but in chemical
processes there are additional, special, hazards associated with the chemicals used and
the process conditions. Thus being said, any organization should have a legal and moral
obligation to safeguard the health and welfare of its employees and the general public.
Loss prevention is an insurance term, the loss being the financial loss caused by an
accident. This loss will be not only the cost of replacing the damaged plant, paying fines,
and settling third-party claims, but also the loss of earnings from lost production and lost
sales opportunities.
In the event of a major incident, such costs can be large enough to overwhelm a
company. Thus, safety system is implemented inside the facility in order to avoid such
losses, and reduced the said risks to acceptable levels.
7.1 Instrumentation and Control Systems (I&C systems)
In EXZA plant, I&C systems is used for safety purposes. I&C systems incorporated
inside the facility are developed based on the data collected during hazard and operability
studies (HAZOP) carried out in the process design stage.
They are accomplished, as appropriate, using the structures, systems and
components provided to mitigate the consequences of accident conditions. I&C system
does not only focused on monitoring the safety of plant operation, it also gives control on
the production rate and cost, as well as provides information on overall energy consumption
of the facility.
However, I&C system is mainly developed to give accurate control on the equipment
present in the facility. Ultimately, process control and monitoring are closely related to
safety, in which I&C system helps;
To keep the process variables within known safe operating limits;
To detect dangerous situations as they develop and to provide alarms and
automatic shutdown systems;
To provide interlocks and alarms to prevent dangerous operating procedures
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7.1.1 Types of I&C system in plant
On the basis of the identification of safety functions that are required to be carried
out, I&C systems are established to perform functions important to safety. There are some
types of instruments implemented in order to monitor and relay information in case of
accident and potentially hazardous deviations in process condition. Some of them includes;
1. Alarms system
2. Automatic trip system
3. Interlock system
7.2 Emergency Situation Procedure
Accidents could be happened regardless of time and place. It is classified in
emergency situation which consider as out of control. Therefore it is a need to list the
emergency procedure guideline that is used in EXZA plant.
General Procedure
Some of the procedures that must be taken when the emergency situation happened in the
plant are:
i. Do not panic and stay alert.
ii. Assess the situation around your area.
iii. Wait for instructions from supervisor or shift manager.
Fire/Explosion/natural Disaster
This procedure should be taken for fire, explosion or natural disaster are the same. The
basic procedures for the above situation are:
i. Raise the alarm.
ii. Immediately inform the supervisor or shift manager.
iii. Assess the situation.
iv. Wait and follow the instruction from them.
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Hazardous Substance Discharge
If any hazardous substance discharge incident occurred, without taking any unnecessary
personal risk, the following procedure had to be followed:
i. Immediately inform the supervisor or shift manager
ii. Minimize substance discharge
iii. Identify substance and act accordingly
iv. Neutralize the substance discharge
v. Wait for the instructions from supervisor or shift manager
Table 7.1: Types of hazardous
Types of hazard/
exposure
Acute hazards/ symptoms
Prevention First aid/ fire fighting
Fire Combustible. NO open flames. Alcohol-resistant foam,
dry powder, carbon dioxide.
Explosion Above 63C explosive
vapour/air mixtures may be formed.
Above 63C use a closed system,
ventilation.
In case of fire: keep drums, etc., cool by spraying with water.
Table 7.2: Safety precaution
Exposure Acute hazards/
symptoms Prevention First aid/ fire fighting
Inhalation Cough / sore
throat.
Ventilation, local exhaust, or breathing
protection. Fresh air, rest.
Skin Dry skin. Protective gloves, wear
protective work clothing.
Rinse and then wash skin with water and soap.
Eyes Redness, Pain. Safety goggles.
First rinse with plenty of water for several minutes (remove
contact lenses if easily possible), then take to a doctor.
Ingestion Burning
sensation. Do not eat, drink, or smoke during work.
Rinse mouth. Give one or two glasses of water to drink. Do
NOT induce vomiting.
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46
8.0 ECONOMIC POTENTIAL
8.1 Total Capital Investment
We have divided the total capital investments into 2 parts in the early stages of plant
design, which are fixed capital investment and working capital investment. The fixed capital
investment is investment in fixed capital or to the replacement of depreciated fixed capital.
Thus, fixed capital investment is investment in physical assets which includes the cost for
machinery, land, services, vehicles and installation. The total fixed capital investment costs
Exza for about $ 2,165,288.16 which include the direct and indirect cost. The working
capital investment is 15% from the fixed capital investment.
8.2 Fixed Capital Investment
Figure 8.1: Fixed Capital Investment.
Fixed Capital
Investment
Machinery
Land
Vehcles (Truck)
Services
Installation (Equipment,
Piping, Electrical,
Safety)
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47
Figure 8.2: Equipment used in our plant.
Table 8.1: Equipment required and estimated costs for 2 production line.
Instrument Cost Per Unit ($) Unit Purchase Cost ($)
Mixing Tanks 13,500.00 2 27,000.00
Silo (Polymer) 10,000.00 3 30,000.00
Solvent Storage Tank 10,000.00 1 10,000.00
Dispersing agent Tank 6,000.00 1 6,000.00
Stabilizing agent Tank 6,000.00 1 6,000.00
Antifreezing Storage Tank 6,000.00 1 6,000.00
PPD Storage Tank 15,000.00 3 45,000.00
Centrifugal Pump 6,000.00 10 60,000.00
Valve 1,335.00 2 (set) 2670.00
Heat Exchanger 10,000.00 2 10,000.00
Reboiler 10,000.00 2 10,000.00
In-line mixer 25,000.00 2 50,000.00
Piping 1,309.08 2 (set) 2618.16
Total Cost 265,288.16
Equipments
Mixing vessel In-line mixer
Pump
Storage Tank Reboiler
Heat Exchanger
Piping system
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Table 8.2: Direct cost and indirect cost of fixed capital investments.
Direct Cost
Component cost Cost ($)
Total Equipment cost 265,288.16
Equipment Installation 250,000.00
Electrical Installation 100,000.00
Service Facilities 50,000.00
Process and auxiliary 100,000.00
Yard Improvement 100,000.00
Transportation 100,000.00
Total 965,288.16
Indirect Cost
Engineering and supervision
Construction Expenses
500,000.00
Legal Expenses 100,000.00
Contractor Fee 600,000.00
Total 1,200,000.00
Fixed Capital Investment
(Direct + Indirect Cost)
2,165,288.16
8.3 Working Capital Investment
It is including the costs necessary to operate the plant. Working capital investment is
crucial to make sure that EXZA has sufficient funds for carrying out our everyday operations
in a smooth manner. Generally, working capital investment is simply 15% of the fixed
capital investment.
Working capital investment = 0.15 x fixed capital investment
= 0.15 x $ 2,165,288.16
= $ 324,793.23
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8.4 Material Consideration
In Exza, we produce 3 tonnes of pour point depressant (PPD) for each cycle and 18
tonnes per day by one production line. One day 6 cycle, 1 week 5 working days. 1 week
will produce 90 tonnes PPD by one production line. The entire tank for storing the material
can be filled up to 2 weeks of production of PPD. Therefore, for every two weeks of
production, the supplier will filled up the entire materials tank.
Figure 8.3: Operation cycle.
Table 8.3: Material costs for 1 production line
Material % Price per
Ton ($) Cycle ($) Day ($) Week ($) Year ($)
EVA 28% 30% 800 720 4320 21600 1123200
Ethoxylated
nonylphenol 2% 1500 90 540 2700 140400
2-ethylhexanol 40% 1000 1200 7200 36000 1872000
Sodium oleate 3% 23000 2070 12420 62100 3229200
Ethylene glycol
Water
3 : 2
25% 600 270 1620 8100 421200
Total 4350 26100 130500 6786000
Total cost of raw material to produce PPD for 2 production lines per year
= $6,786,000.00 X 2
= $13,572,000.00
3 hours
(3 tons)
1 hour (Cleaning)
3 hours
(3 tons)
1 hour (Cleaning)
3 hours
(3 tons)
1 hour (Cleaning)
Non- stop
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8.5 Salaries Consideration
Table 8.4: Salaries of each of the workers per month.
Quantity Position Salary ($) Total ($)
1 Chief Executive Officer (CEO) 15000 15000
1 General manager 10000 10000
1
Section manager
Administration 7000 7000
1 Sales and marketing 7000 7000
1 Research and development 7000 7000
1 Operation 7000 7000
1 Human resource 7000 7000
1 Quality control 7000 7000
1 Business development 7000 7000
1 Production 7000 7000
1 Marketing 7000 7000
1 Customer service 7000 7000
Engineer
3 Senior Engineer 5000 15000
2 Process Control Engineer 2400 4800
2 Equipment/Maintenance Engineer 2400 4800
2 Quality Assurance Engineer 2400 4800
2 Safety Engineer 2400 4800
Others
1 Financial advisor 2400 2400
1 Marketing executive 1900 1900
1 Quality assurance 1900 1900
1 Quality control inspector 2300 2300
2 Supervisor 2000 4000
26 Others 900-1200 24000
Total: $ 165,700
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8.6 Loan
EXZA hopes to obtain investment amount $ 2,000,000 from investor and obtain
$ 2,000,000 from bank. The interest rate of loan is 1.5% per annum.
Table 8.5: The conditions required by CIMB and UOB.
Commerce Investment Merchant Bank(CIMB)
United Overseas Bank (UOB)
Term up to 15 years is available Term up to 15 years is available
Medium to long term lending facility Medium to long term lending facility
Fixed monthly repayment over loan tenure. Flexible repayment over the loan tenure
Interest rate pegged to the banks Base Lending Rate (BLR) Malaysian-owned
company Daily rest interest
- Fast turnaround for approvals
- Early drawdown of up to 50% of loan facility
Private Limited Companies. Private Limited Companies
After considering all the terms and conditions required by both of the bank, we
decided to choose UOB as it provides a better efficiency in withdrawing the loan. Besides,
the repayment is flexible over the loan tenure. EXZA targets to pay the loan quicker so that
the loan is expected to completely pay back within 10 years instead of 15 years.
UOB also provides lower interest rate as daily rest interest rate is an advantage due
to calculation based on the previous days outstanding balance. Thus, if we make
outstanding payment in the middle of the month, it will reduce the loan interest at the next
day.
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8.6.1 Loan Agreement Details
Figure 8.4: Loan payment details.
Table 8.6: Sources of capital.
Source Amount ($)
Capital 2,000,000
Bank Loan 2,000,000
Investors 2,000,000
8.7 Sales of PPD per year
In one year EXZA Company is capable of producing 9360 tons of PPD by 2
production lines. Estimated 60% of total PPD produced were sold to contracted company.
The total income is shown below:
Table 8.7: Income of sales 60% PPD produced
PPD Price per ton ($) Income ($)
EXZA 28 4500 25,272,000.00
LOAN DATE : 1ST OF JUNE 2015
MATURE DATE : 1ST OF JUNE 2024
INTEREST RATE : 1.5% OF THE LAST PRINCIPAL BALANCE
PAYMENT : 10% YEARLY + INTEREST RATE AFTER THE MATURE DATE
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8.8 Estimated Total Budget
Figure 8.5: Estimated expenses.
Table 8.8: Early Budget
Aspect Cost , $
Capital 2,000,000.00
Bank 2,000,000.00
Investor 2,000,000.00
Total Capital 6, 000,000.00
(-)
Equipments 2,165,288.16
Land 1,230,147.41
Building 2,000,000.00
Remaining Balance 604,564.43
Equipments and Transportation,
31.69%
Land, 32.11% Materials, 3.38%
Human Resources Expenses,
19.38%
Maintanence and Loan Payment,
7.59%
Others, 5.85%
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Table 8.9: Expected total net profit for first year
Estimated Total Budget US ($)
Sales 25,272,000.00
Remaining Balance 604,564.43
Total Budget 25,876,564.43
(-) Estimated Total Expenses US ($)
Materials 13,572,000.00
Loan 163,333.00
Salary ( Include bonus) 1,988,400.00
EPF & SOCSO 596,520.00
Insurance 500,000,00
Bills ( water, electrical) 1,200,000.00
Packaging 300,000.00
Shipping 800,000.00
Maintenance 500,000.00
Others 1,000,000.00
Total Expenses 20,120,253.00
Total Profit 5,756,311.43
Expected Profit after Tax (10% income tax) 5,180,680.29
Repayment (Investor 5%) 259,034.01
Expected Total Net Profit 4,921,646.28
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8.9 Projection of Paying Back
Table 8.10: Percentage of repayment
Source Percentage of Repayment (%)
Bank Loan 1.5
Investors 5
Table 8.11: Estimation of pay back amount
Year Debt Interest Debt + Interest Paid
0 2,000,000.00 0.00 0.00 0.00
1 2,000,000.00 30,000.00 2,030,000.00 163,333.00
2 1,866,667.00 28,000.005 1,894,667.01 163,333.00
3 1,731,334.01 25,970.01 1,757,304.02 163,333.00
4 1,593,971.02 23,909.57 1,617,888.58 163,333.00
5 1,454,547.58 21,818.21 1,476,365.79 163,333.00
6 1,313,032.79 19,695.49 1,332,728.29 163,333.00
7 1,169,395.29 17,540.93 1,186,936.22 163,333.00
8 1,023,603.22 15,354.05 1,038,957.26 163,333.00
9 875,624.26 13,134.36 888,758.63 163,333.00
10 725,425.63 10,881.38 736,307.01 163,333.00
11 572,974.01 8,594.61 581,568.62 163,333.00
12 418,235.62 6,273.53 424,509.16 163,333.00
13 261,176.16 3,917.64 265,093.80 163,333.00
14 101,760.80 1,526.41 103,287.21 103,287.21
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56
9.0 CONCLUSION
EXZA Company is expanding the PPD plant in Perak because of low cost and
strategic place. EXZA Company is producing PPD for oils and gas industries to help the
industries solving the problem of oils transportation. PPD are lubricant additives for crude
oils which can help to prevent congelation of crude oils in pipelines during transportation
and processing equipment at low temperature. This report has the details on designing and
constructing the plant to produce EVA based PPD. This report also has shown the
expenses from constructing plant until earning profit from the selling. Moreover, EXZA
company also has do improvement on their product, so that they able to compete with other
companies. This company also has considered on the safety of employee in the plant
during the processing from storage of the ingredient to finishing product.
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