2017CHE003 FinalPaper Draft 8 1

MAPUA INSTITUTE OF TECHNOLOGY AT LAGUNA Academic Year 2017 –  2018  2018 (1st Term)

SIMULATION AND ECONOMIC FEASIBILITY STUDY OF METHYL ISOBUTYL KETONE (MIBK) MANUFACTURING PLANT IN THE PHILIPPINES

Submitted to: Engr. Jesuniño Aquino Submitted by:

Ashraf Dizon HELMY MOHAMED YEHIA Russel Marc Legacion PEPITO Yves Robin Cuevas PINES

Date

August 30, 2017

Table of Contents 1.

2.

INTRODUCTION 1.1 Background of the Study 1.2 Objectives 1.2.1 General Objective 1.2.2 Specific Objectives 1.3 Significance of the Study 1.4 Scope and Limitations of the Study 1.5 Statement of the Problem 1.6 Company Profile 1.6.1 Description of the Company 1.6.2 Vision 1.6.3 Mission 1.6.4 Core Values 1.6.5 Company Logo 1.7 Review of Related Literature 1.8 Methodology MARKET STUDY 2.1 Situational Analysis 2.1.1 Situational Environs 2.1.1.1 Global Consumption and Production. 2.1.1.2 Demand based on import in the Philippines 2.1.1.3 Demand based on import in Asia 2.1.1.4 Availability of Raw Material 2.1.1.5 Project Location 2.1.1.5.1 Proposed Location 2.1.1.5.2 Plant Location Criteria 2.1.1.5.3 Selected Plant Location 2.1.2 Competitor Environs 2.2 Target Market 2.2.1 Local Market of Methyl Isobutyl Ketone 2.2.1.1 Local Market of Methyl Isobutyl Isobutyl Ketone 2.2.2 Export Market for Methyl Isobutyl Isobutyl Ketone & Isopropyl Alcohol 2.2.2.1 Export Market Based on Location 2.2.2.2 Export Market Based on Organizational Partnership 2.2.2.3 Export Market Based on Demand 2.3 SWOT Analysis 2.4 MARKETING OBJECTIVES AND GOALS 2.4.1 Market Share 2.4.2 Market Volume 2.5 Marketing Strategy 2.5.1 Logistics 2.5.1.1 Packaging 2.5.1.2 Transportation Transportation 2.6 Marketing Tactics

Table of Contents 1.

2.

INTRODUCTION 1.1 Background of the Study 1.2 Objectives 1.2.1 General Objective 1.2.2 Specific Objectives 1.3 Significance of the Study 1.4 Scope and Limitations of the Study 1.5 Statement of the Problem 1.6 Company Profile 1.6.1 Description of the Company 1.6.2 Vision 1.6.3 Mission 1.6.4 Core Values 1.6.5 Company Logo 1.7 Review of Related Literature 1.8 Methodology MARKET STUDY 2.1 Situational Analysis 2.1.1 Situational Environs 2.1.1.1 Global Consumption and Production. 2.1.1.2 Demand based on import in the Philippines 2.1.1.3 Demand based on import in Asia 2.1.1.4 Availability of Raw Material 2.1.1.5 Project Location 2.1.1.5.1 Proposed Location 2.1.1.5.2 Plant Location Criteria 2.1.1.5.3 Selected Plant Location 2.1.2 Competitor Environs 2.2 Target Market 2.2.1 Local Market of Methyl Isobutyl Ketone 2.2.1.1 Local Market of Methyl Isobutyl Isobutyl Ketone 2.2.2 Export Market for Methyl Isobutyl Isobutyl Ketone & Isopropyl Alcohol 2.2.2.1 Export Market Based on Location 2.2.2.2 Export Market Based on Organizational Partnership 2.2.2.3 Export Market Based on Demand 2.3 SWOT Analysis 2.4 MARKETING OBJECTIVES AND GOALS 2.4.1 Market Share 2.4.2 Market Volume 2.5 Marketing Strategy 2.5.1 Logistics 2.5.1.1 Packaging 2.5.1.2 Transportation Transportation 2.6 Marketing Tactics

CHAPTER 1: INTRODUCTION 1.1 Background of the Study

Methyl Isobutyl Ketone (MIBK) is a chemical known for its high solvency. Due to this property, it has long been used in the manufacturing of paints, rubbers, pharmaceuticals, industrial cleaners, germicides, fungicides, and electroplating solutions. MIBK is also considered to be non-toxic enough to  be considered as a Food and Drug Administration Administration (FDA) Approved indirect food additive for paper, adhesives, and polymers (American Chemistry Council, nd). It is also considered as an active solvent for various synthetic resins including cellulosics, vinyl copolymers, acrylics, alkyds, polyesters, and epoxies. MIBK is also has a low density. With this property, together with its high solvent power, it has been found to be very useful in developing high-solids coatings. MIBK is also used as an extracting agent in the dewaxing and deoiling deoiling of petroleum petroleum products (Eastman Solvents, Solvents, nd). nd).

Afshar of TransTech TransTech

Consultants Inc. stated that in 2014 18% of international MIBK is exhausted as a solvent in transportation, refurnishing and marine coatings, 9.2% in construction coatings, 8.5% in wood coatings and 8.1% in metal coatings. Globally, 59% of total MIBK output is consumed as a solvent, 16% as an extraction solvent, 13% as rubber processing chemicals and 4% as surfactants. World supply stood at about 485,000 ton/year in 2013, having 170,000 ton/year from Asia Pacific, followed by 85,000 ton/year from Western Europe, 65,000 ton/year from Japan, 50,000 from Mexico and 45,000 ton/year from the US. Global demand for MIBK in 2013 was found to be 383,000 ton/year (TransTech Consultants Inc., 2014).

Figure 1.1 Global MIBK Supply in 2013 On parallel with being the largest supplier of MIBK, Asia Pacific is also the largest consumer with demand of 167,000 ton/year, which is then followed by the US with 60,000 ton/year, then Western Europe with 55,400 ton/year. These data shows that Asia Pacific market will need an additional capacity of 75,000 ton by 2018 (TransTech Consultants Inc., 2014). The IHS Markit stated in May 2015 that the global consumption of MIBK gave an annual rate increase of almost 7% at years 2011 to 2014. It was also stated that the increase in consumption, driven  by China’s increased tire production, resulted in MIBK’s use in rubber antiozonants has developed over

the last three years, from approximately 25% of total MIBK consumption in 2011 to 32% in 2014 in the major exhausting countries/regions (TransTech Consultants Inc., 2014).

Figure 1.2 Global MIBK consumption in 2014

The process chosen by the TOPSIS from the three alternatives was the first alternative which is the Method and Apparatus for Producing Purified Methyl Isobutyl Ketone (MIBK). In this process diacetone alcohol (DAA) is produced from the condensation of two acetone molecules. Then, the DAA is dehydrated to produce mesityl oxide (MSO) which would then be hydrogenated to produce the MIBK. An acidic catalyst is needed in the condensation and dehydration reaction, and the presence of a hydrogenation catalyst such as a noble gas is required in the hydrogenation of MSO (Hahn,T.E , et al, 2010). In producing the MIBK, comprises a reactor, a hydrogen separator, a liquid-liquid separator, a first distillation column, a second distillation column, and a third distillation column. The MIBK reactor is preferred to have a single process step and it should comprise a tubular reactor. The preferred reactor is a tubular trickled bed reactor. It is preferred that the hydrogen separator drum is located before the first distillation column. Then the hydrogen may be recycled from the hydrogen separator to the hydrogen feedline before the MIBK reactor. The liquid-liquid separator should be located at the second distillation

column and it may comprise a decanter and a take-off line for removing the aqueous phase (Hahn,T.E., et al, 2010). In this process, the yield of MIBK is 99.8% wherein the 2% is acetone and other compounds. This process also yields other compounds such as Acetone, 2 Methyl Pentane, Di-isobutyl Ketone, and water and this will later be recycled or reacted. The hydrogenation catalyst used is mainly a palladium  based resin catalyst (Hahn,T.E., et al, 2010). 1.2 Objectives

1.2.1 General Objective

The goal of this study is to design and simulate a MIBK manufacturing plant in the Philippines that utilizes the Integrated Dual Process and assess its economic feasibility. 1.2.2 Specific Objectives

•

To conduct a market study that covers the supply and demand analysis, plant capacity, market share, and target market.

•

To use Decision Support Systems with to help select the optimal MIBK process and Plant Location

•

To simulate detailed operational procedures, control schemes and reactions in the production of MIBK via ASPEN HYSYS V8.8.

•

To provide design work such as process design and description, heat and material balance, piping and a 3D model of the plant using AutoCAD 3D Modeling.

•

To assess the economic feasibility of the overall project by analyzing cost of the design and operation.

1.3 Significance of the Study

The importance of this study is to provide information on the production and profitability of a MIBK manufacturing plant that utilizes the Integrated Dual Process. The study of the production of MIBK can later be used by students, researches, plant designers and other interested people in the scientific community. 1.4 Scope and Limitations of the Study

•

The prices of the equipment that will be used in the estimation of the manufacturing plant will solely be based on the calculations in the book Chemical Engineering Design by Towler and Sinnott.

•

The simulation of the reactions and unit operations involved in the manufacturing process will be limited to the capability of ASPEN HYSYS V8.8.

•

The market study will only focus on the Philippines and some countries in Asia that have significant demand for MIBK.

•

The market study on the supply and demand analysis will only be based on the data that are available for public viewing, mainly the import and export data of the different countries.

1.5 Statement of the problem

Throughout the years, the MIBK demand had been steadily increasing, especially in the Asia Pacific. The current manufacturing plants that provide the supply in Asia does not satisfy the incredible increase in the demand. The top suppliers of MIBK up to this day are still mainly from African and European countries. This is the reason to establish a manufacturing plant in Asia, specifically the Philippines which is somewhat in the middle of the largest demanding countries for MIBK and has a great number of ports that provide easy transport of the product in neighboring countries.

1.6 Company Profile

1.6.1 Description of the company

MiKCo is a company that manufactures Methyl Isobutyl Ketone (MIBK) for the demand of the Philippines and other Asian countries. The company’s aim is to be a world class manufacturer of MIBK

that satisfies the increasing demand of MIBK in the Market, especially in the Asia Pacific countries. The company name “MiKCo.” means Methyl Isobutyl Ketone Corporation. 1.6.2 Vision

•

MiKCo will be the leading provider of quality MIBK locally and internationally.

1.6.3 Mission

•

To provide premium quality MIBK in the Philippines and in the Asia Pacific

•

To dominate the MIBK Market locally and internationally

1.6.4 Core Values

•

Leadership

•

Integrity

•

Communication

•

Quality

•

Team

1.6.5 Company Logo

The name of the company MiKCo was derived from the combination of an alternative name for the product it wants to produce, Methyl Isobutyl Ketone (MIK), and the word “Corporation”. The Hexagon at the back of the logo is also a word play from an alternative name of MIBK, “Hexanone”. The

Erlenmeyer flask in the logo represents that the company is an industrial chemical manufacturer. The color yellow of the name of the company represents mind and intellect while the turquoise background represents communication and clarity. Overall the logo tells that the company uses intellect that is backed up by communication to make its way to the top of the market. 1.7 Review of Related Literature

 Manufacturing of MIBK

In the practical preparation of Methyl Isobutyl Ketone by stepwise Isopropylation reaction of acetone, fine Methyl Isobutyl Ketone (MIBK) will generate no H 2 and wastes since green and practical

 procedures are used. Isopropanol will also be used instead of H 2 in the process to provide a safe hydrogen source and the solvent, by-product and catalyst will be recyclable and reusable. The process will start through acetone conversion and a recoverable Pt/C-catalyzed transfer hydrogenation of Mesityl Oxide (MO) with isopropyl alcohol (IPA). Almost 99.9% MO will be converted and there will be 99.3% selectivity of Methyl Isobutyl Ketone (Fang Wang, 2017). A gas phase process will be used in the one-step Methyl Isobutyl Ketone synthesis from two  propanol. This process will be an alternative from the traditional procedure in producing MIBK from acetone. The catalysts are bifunctional copper/acid-base catalysts since these catalysts are able to operate at mild temperature and at atmospheric temperatures. Cu-Mg-Al mixed oxide catalysts are found to have a high yield of MIBK (G. Torres, 2007). One-synthesis of MIBK from acetone and hydrogen was investigated using a Pd/Nb 2O5.nH2O catalyst. Compared to Pd/y-Al2O3, Pd/Nb2O5.nH2O showed higher selectivity and catalytic reactivity. Since, isopropanol was barely formed in the Pd/Nb 2O5.nH2O catalyst. This is due to the fact that Palladium metal, supported on niobic acid, seems to inhibit hydrogenation of C=O. Pd/Nb 2O5.nH2O catalyst also showed good resilience in the MIBK formation. (Yasuhiko Higashio, 1996).  Isopropyl Alcohol

Isopropyl Alcohol is commonly known as rubbing alcohol is a common ingredient in chemicals such as detergents and antiseptics. Due to its properties, it offers a lot of household applications such as removing hairspray residue from windows and mirrors. It can also remove fingerprints from delicate  plastic of the discs such as DVDs and CDs, counter tops, and other commonly touched surfaces. Like MIBK, IPA also have uses in the automotive industry since it is used to remove brake fluid traces from the hydraulic braking system to prevent contaminating the brake pads.

According to the Food and Drug Administration, Isopropyl Alcohol (IPA) may be present in spice oleoresins as a residue from the extraction of spice but it should not exceed 50 ppm, in lemon oil as a residue in the production of oil but it should not exceed 6 ppm, in hops extract as a residue from the

extraction of the hops but it should not exceed 2.0 wt% providing that the hops extract is added to the wort before the hops is manufactured as a beer.

1.8 Methodology

The market trend of MIBK was determined by analyzing the import and export of Indonesia, Thailand, China, Vietnam and Philippines. Then the available market share was determined by calculating the growth of the total import forecasted until 2027. In order to have a realistic market share, 51% of the available market was assumed to be the market share according to Towler and Sinnot. Using SMART Decision support system, the plant location was chosen among the three alternatives. The TOPSIS decision support system was used to select the best process among the three alternatives. There was a criterion set in order to maintain objectiveness among the three processes. The third process which is the "Integrated Dual Process for the production of MIBK and IPA" was chosen via DSS. In this process pure acetone and hydrogen feed enters the reactor where it is converted to MIBK, IPA, Mesityl Oxide (MO), Diisobutyl Ketone (DIBK), and Diacetone (DA). Before the vapor stream from the reactor enters the distillation column, it passes through a series of heat exchangers in order to achieve the target temperature which is 35 °C. Then, the MIBK is purified by three distillation columns up to 99.67%. In the second reactor, recycled hydrogen and acetone, and pure hydrogen and acetone is fed. Hydrogen, Acetone, Diacetone, IPA, Mesitylene, and water is produced from the second reactor before it enters the distillation column, it passes through a series of heat exchangers to reach the target temperature which is 35 °C. Then acetone is separated from the stream which is then recycled.

Then, IPA is purified up to 99.89%. Exothermic reactions occur in both of the tubular reactors that contain palladium for the first reactor and rubidium catalyst for the second reactor. ASPEN HYSYS V8.8 was used to simulate the chosen process using the required operating conditions and parameters. The heat and material balance is then presented along with the process flow diagram and the necessary calculations were also presented.

CHAPTER 2: MARKET STUDY

2.1 SITUATIONAL ANALYSIS

2.1.1 Situational Environs

The process that has been chosen for production has two main products, Methyl Isobutyl Ketone (MIBK) and Isopropyl Alcohol (IPA). This part of the study shows the current state of the MIBK & IPA global market. This part contains the demand and supply in the Philippines, Asia, and the world. 2.1.1.1 Global Consumption and Production.

 Methyl Isobutyl Ketone

The global market of methyl isobutyl ketone was found to be worth 827.4 M US dollars in the year 2015. It has also been predicted to have a compound annual growth rate (CAGR) of 7.5% over the  periods between 2016 and 2024. The value of the MIBK market is predicted to become 1,572.3 M US dollars by the year 2024 due to the steady increase in its market price. Most of this CAGR is due to the increase in demand of MIBK that is used in the consumption of solvents for surface coatings and rubber  processing chemicals mainly in the global automotive industry (Transparency Market Research, 2015). The major global use of MIBK is known to be as a solvent that accounts for 59% of its total consumption, 16% of that is used as an extraction solvent, 13% as rubber processing chemicals, and 4% as surfactants. Furthermore, 18% of global MIBK is used as a solvent in transportation, refurnishing and marine coatings; 9.2% in construction coatings; 8.5% in wood coatings and 8.1% in metal coatings. The world production stood at about 485,000 ton/year in 2013, having 170,000 ton/year from Asia Pacific, followed by 85,000 ton/year from Western Europe, 65,000 ton/year from Japan, 50,000 from Mexico and 45,000 ton/year from the US. Global demand for MIBK in 2013 was found to be 383,000 ton/year. The (TransTech Consultants Inc., 2014).

Figure 2.1 Global MIBK Supply in 2013 In the year 2015, the largest global producer and consumer of MIBK have been found to still be the Asia Pacific. It is also accounted, in terms of revenue, for having the leading share in the MIBK market of over 42% that year (Transparency Market Research, 2015).

Figure 2.2 Global MIBK consumption in 2014

The IHS Markit stated in May 2015 that the global consumption of MIBK gave an annual rate increase of almost 7% at years 2011 to 2014. It was also stated that the increase in consumption, driven  by China’s increased tire production, resulted in MIBK’s use in rubber antiozonants has developed over

the last three years, from approximately 25% of total MIBK consumption in 2011 to 32% in 2014 in the major exhausting countries/regions (TransTech Consultants Inc., 2014).  Isopropyl Alcohol

According to Product Complexity Index (PCI) isopropyl alcohol is 1744 th most traded product and the 789 th most complex product.

Asia

Europe

North America

South America

Africa

1% 8%

29%

32%

30%

Figure 2.3 Global IPA Exports According to OEC the top Exporter of IPA is North America wherein it is exporting ($ 369M), followed by Europe ($ 351M), Asia ($ 337M), Africa ($ 93.7M), and South America ($ 12.7M). The companies operating the market are the Shell Chemicals, Mitsui Chemicals Inc., Sasol Olefins, DOW Chemicals, Exxon Mobil Chemical Company, and CNPC Jinzhou Petrochemical Corp (IMARC Group, n.d.).

Asia

Europe

North America 5%

19%

2%

South America

Africa

Oceana

1%

39%

34%

Figure 2.4 Global IPA Demand in 2016 According to OEC the top importer of IPA is Asia wherein it is importing ($ 455M), followed by Europe ($ 395M), North America ($ 224M), South America ($ 62.9M), Africa ($19.4M), and Oceana ($ 7.86M). It was reported that Europe and North America were the leading consumers of IPA, but Asia Pacific shown high growth rates and became the largest consumer of IPA (Merchant Research and Consulting, 2017). It was also reported that the IPA has grown at a CAGR of 2.5% from 2008 to 2015 wherein it reached a sales volume of 2 M Tons as of 2015. The leading factors that affected the market growth of IPA are the various industries such as chemicals and materials, pharmaceuticals, industrial, and cosmetics (IMARC group, n.d.).

2.1.1.2 Demand based on import in the Philippines

 Methyl Isobutyl Ketone

Table 2.1 Yearly MIBK import in the Philippines Year

Quantity (Kg)

Value (USD)

2011

1,261,816

2,447,462

Estimated Price (USD/kg) 0.886602

2012

1,708,434

2,903,879

0.965153

2013

2,919,128

1,607,542

0.779055

2014

542,303

303,289

1.20645

2015

1,460,969

1,210,504

0.953671

2016

1,815,099

1,937,572

0.89161

The following data are obtained from the United Nations Commodity Trade Statistics Database. These numbers are validated using the values in the website of Department of Trade and Industries of the Philippines, Tradeline Philippines.

3,500 3,000 2,500     )    T    M2,000     (    t    r    o 1,500    p    m    I 1,000 500 0 2011

2012

2013

2014

2015

Year

Figure 2.5 Data of Import in the Philippines

Using the Trend Analysis via Linear Regression in Figure 2.5, it can be seen that the Demand in the imports for the Methyl Isobutyl Ketone (MIBK) from 2011 to 2016 is slowly depleting since there are already existing companies in the Philippines that is producing MIBK such as Chemisol Inc., Coastal Bay Chemicals, California Chemical Corp., and SBS Philippines Corp. The Demand for the import of MIBK  by 2027 will be 1,481,878 Kg. The aim of the company is to first meet some of the remaining demand in the Philippines for the next couple of years and then start exporting on nearby countries with high demand of MIBK. Table 2.2 Yearly MIBK Value in the Philippines Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Estimated Price (Dollar/kg) 0.68 0.8 1.08 1.47 1.09 0.61 1.03 0.76 1.26 1.94 1.7 0.55 0.56 0.83 1.067

The data provided by the United Nations Commodity Trade Statistics Database on the demand and trade value of MIBK import in the Philippines.

Figure 2.6 Data of MIBK Estimated Market Value based on Philippine Import By analyzing the data provided by the United Nations Commodity Trade Statistics Database for the import data and trade value then using the Trend Analysis via Linear Regression, it can be seen that despite the decrease in net weight demand there is an Increase in the value of MIBK in dollars per kilogram in the Philippines from 2002 to 2016. If the trend continues the value of the MIBK per Kg will increase up to 1.11 Dollars per Kg by 2017. Currently there are no data for the Philippines’ export of MIBK. This is based on the data  provided by the United Nations Commodity Trade Statistics Database and validated by the website of Department of Trade and Industries of the Philippines, Tradeline Philippines.  Isopropyl Alcohol

Table 2.3 Demand quantity and value of IPA in the Philippines based on Import Year

Quantity (kg)

Value (USD)

2011

15,196,332

13,473,096

Estimated Price (USD/kg) 0.887

2012

15,796,376

15,245,919

0.965

2013

18,443,946

14,368,844

0.779

2014

16,581,009

20,004,157

1.206

2015

15,732,835

15,003,949

0.954

2016

24,465,956

21,814,084

0.892

The following import data on amount in kilograms and value in US Dollars of Isopropyl Alcohol are provided by the United Nations Commodity Trade Statistics Database. These numbers are validated  by the website of Department of Trade and Industries of the Philippines, Tradeline Philippines.

 30,000.00

 25,000.00

 20,000.00     )    g     k     (    y    t    i    t  15,000.00    n    a    u    Q  10,000.00

 5,000.00

2011

2012

2013

2014

2015

2016

Year

Figure 2.7 IPA Demand based on Philippine Import Using Linear Regression, the trend analysis can be seen as the red line in the graph. It can be  perceived that the Demand in the imports for the Isopropyl Alcohol (IPA) from 2011 to 2016 has a  positive slope because of the constant increase in the compound’s everyday usage, both in the domes tic

and industrial fields. The demand for the Philippines is estimated to be 35 M kg.

Table 2.4 Export of IPA in the Philippines Year

Export (kg)

2011

11,750

2012

8,019

2013

65,251

2014

345

2016

35,155

2011

11,750

 30,000.00

70 60

 25,000.00

50     )    T    M     ( 40    y    t    Q    t 30    r    o    p    x    E 20

    )    T  20,000.00    M     (    y    t    Q 15,000.00    t    r    o    p    m    I  10,000.00

 5,000.00

10

 -

0 2011

2012

2013 Import

2014

2015

2016

Export

Figure 2.8 IPA Visual representation of Import and Export The graph shows the visual representation of the import and export of IPA in the Philippines. It can be seen that the export value of IPA in the Philippines is almost negligible when compared to the Import value.

1.4 1.2     )    g    K     /    r 1    a     l     l    o    D0.8     (    e    c    i    r    P     d 0.6    e    t    a    m 0.4    i    t    s    E 0.2 0 2011

2012

2013

2014

2015

2016

Year

Figure 2.9 IPA Estimated Price based on Philippine Import The figure above shows that the estimated price per kilogram of IPA is slowly increasing over the years 2011-2016. The trend analysis of the price, represented by the red line, was obtained by the use of linear regression. The estimated price of IPA in the Philippines can be estimated to be 1.1083 US Dollar  per kilogram by the year 2017.

2.1.1.3 Demand based on import in Asia

 Methyl Isobutyl Ketone

1.40% 2.70%

China

4.10%

2.70% 1.80%

India South Korea

3.40%

Singapore

4.20% 39%

United Arab emirates

4.50%

Thailand

4.80%

Vietnam Indonesia

5.40%

Israel Philippines 26%

Malaysia Others

Figure 2.10 Percentage of MIBK imports in Asia in 2015 As previously stated in the Transparency Market Research in 2015, Asia Pacific was the largest  producer and consumer of MIBK in the world, making it the focused continent of this study. The data above is from The Observatory of Economic Complexity tool by Alexander Simoes from the MIT Media Lab. It can be seen in the pie chart that china is the greatest importer in Asia at 39% followed by Thailand at 26%. All of the other countries in Asia are below 10% in the import data, including the Philippines that sit at 1.4% of the imports in Asia. For this reason, the study will be focusing only on the demand of the top importing countries.

China

Table 2.5 Demand of MIBK based on import and export in China

Year

Import Trade Value (Dollar)

Net Weight (kg)

2011

36,729,312

20,602,674

2012

47,945,026

26,725,783

2013

93,298,603

51,659,242

2014

93,835,120

54,259,065

2015

53,621,783

48,556,640

2016

48,499,681

53,340,091

Year

Export Trade Value (Dollar)

Net Weight (kg)

2011

1,167,701

2,523,642

2012

10,185

277,041

2013

2,110

13,654

2014

2,244

19,566

2015

537,105

679,616

2016

62,920

56,103

 60,000

 1,400

 50,000

 1,200

    )    T  40,000    M     (    y    t    Q 30,000    t    r    o    p  20,000    m    I

 1,000     )    T    M     (  800    y    t    Q    t    r  600    o    p    x    E  400

 10,000

 200

 -

2011

2012

2013

2014

Import

2015

2016

Export

Figure 2.11 Comparison of MIBK Import and Export in China The data of above gives the MIBK demand of China based on their latest yearly imports. Figure 2.6 provides the visual representation of the growth of the demand in China. By assuming that the growth of the demand is linear, the growth gives a positive growth. The demand for 2017 can be extrapolated to  be about 62 M kg. Figure 2.11 also shows that the export of MIBK in China is relatively low. This means that the country does not have enough supply and needs more MIBK  India

Table 2.6 Demand of MIBK based on import and export in India

Year 2011 2012 2013 2014 2015

Import Trade Value (Dollar)

Net Weight (kg)

8,907,506

4,292,341

34,712,857

17,676,038

39,964,418

19,517,991

40,325,276

20,159,740

39,287,944

28,048,008

2016

24,871,125

23,556,818

Export Trade Value (Dollar)

Year

Net Weight (kg)

2011

1,186,782

586,107

2012

61,297

9,185

2013

65,019

40,716

2014

856,184

394,719

2015

154,924

133,417

2016

144,441

7,179

30,000

 700  600

25,000

 500     )    T    M     (  400    y    t    Q    t  300    r    o    p    x    E  200

    )    T 20,000    M     (    y    t    Q15,000    t    r    o    p    m10,000    I

5,000

 100

0

2011

2012

2013 Import

2014

2015

2016

Export

Figure 2.12 Comparison of MIBK Import and Export in India Figure 3.0 can be used to analyze the growth of demand of MIBK for India. Assuming that the growth is linear, the graph shows a positive slope implying a positive growth in demand. The demand for 2017 can be extrapolated to be about 28 M kg. The graph shows a trend of export that has a negative

slope,

this

means

that

the

country

still

lacks

manufacturing

plants

Thailand

Table 2.7 Demand of MIBK based on import and export in Thailand 

Year

Import Trade Value (Dollar)

Net Weight (kg)

2011

8,907,506

4,292,341

2012

9,602,417

5,174,444

2013

8,717,966

4,577,527

2014

7,431,050

3,911,549

2015

5,949,633

4,503,514

Year

Export Trade Value (Dollar)

Net Weight (kg)

2011

47602

25640

2012

0

0

2013

1212

19

2014

0

0

2015

38002

28341

2016

0

0

of

MIBK.

6,000

30

5,000

25

    )    T 4,000    M     (    y    t    Q3,000    t    r    o    p    m2,000    I

    ) 20    T    M     (    y    t 15    Q    t    r    o 10    p    x    E

1,000

5

0

0 2011

2012

2013 Import

2014

2015

2016

Export

Figure 2.13 Comparison of MIBK Import and Export in Thailand By analyzing Figure 2.13, it can be concluded that Thailand ’s MIBK demand based on import shows a positive growth and also gives an estimated value of 4.2 M kg by means of extrapolation. The export data in Thailand is very low and is zero in some years, this makes the export data almost negligible when compared to the import data. Vietnam

Table 2.8 Demand of MIBK based on import and export in Vietnam

Year

Import Trade Value (Dollar)

Net Weight (kg)

2011

2,875,347

1,657,817

2012

3,088,296

1,780,595

2013

4,029,363

1,956,517

2014

4,625,642

2,325,059

2015

5,188,926

2,630,271

Year

Export Trade Value (Dollar)

Net Weight (kg)

2011

47602

25640

2012

0

0

2013

1212

19

2014

0

0

2015

38002

28341

2016

0

0

 3,000

140 120

 2,500

100     )    T    M     ( 80    y    t    Q    t 60    r    o    p    x    E 40

    )    T  2,000    M     (    y    t    Q 1,500    t    r    o    p    m 1,000    I

 500

20

 -

0 2011

2012

2013 Import

2014

2015

Export

Figure 2.13 Comparison of MIBK Import and Export in Vietnam Table 2.8 and Figure 2.13 shows the available data on the import MIBK in Vietnam. The values from the previous years provide a positive slope of growth in demand based on imports. By the method of extrapolating, the demand for 2017 gives a value of about 3.3 M kg. The graph of the export of MIBK in Vietnam is greatly decreasing and has already reached zero. This implies the lack of manufacturing plants in the country.

 60,000

 50,000

 40,000     )    g    K     (     d    n  30,000    a    m    e    D  20,000

China India Thailand Vietnam Philippines

 10,000

2011

2012

2013

2014

2015

2016

Year

Figure 2.14 Import Trend 2011-2016 Figure 2.14 shows the visual representation of the import trends in the chosen target countries of the company. It can be seen that both China and India have a significant growth in the demand of MIBK On the other hand, Thailand, Vietnam, and the Philippines show very little growth relative to China and India’s growth. This reason makes the three countries have an almost stagnant demand line.

2.1.1.4 Availability of Raw Material

Table 2.9 Import and Export data of Raw Materials in the Philippines Acetone

Hydrogen

Year

Import (kg)

Export (kg)

Import (kg)

Export (kg)

2012

5,523,250

-

-

-

2013

4,704,023

23

-

-

2014

3,554,968

-

27

-

2015

2,837,296

1

361

-

2016

5,464,916

12

916

-

Table 2.9 shows that acetone is not readily available in the Philippines because of the high import data. This also implies that there are no acetone manufacturers in the Philippines. The data for hydrogen import is present in the table but it is small enough to be considered as insignificant. The lack of import and export data in hydrogen implies that there are manufacturers of the compound present in the country.

Figure 2.15 Percentages of Importers of Acetone in the Philippines The figure above helped the company to decide the primary country to consider when obtaining the raw material acetone. The data that was obtained from the Observatory of Economic Complexity tool showed that the main sources of the raw material Acetone will be coming from Singapore, Japan, and

Malaysia. It was also found that the existing Acetone distributor in the Philippines is the company A.P.C. Chemimcal Industries, Inc. in Pasig City. The company has found that there are three possible providers of the raw material Hydrogen gas. The companies and their addresses are stated below: Table 2.10 Companies that manufacture Hydrogen Gas Industrial Gases Manufacturers

Address

Linde

Laguna

Air Liquide

Metro Manila

INGASCO, INC.

Batangas

2.1.1.5 Project Location

In establishing a manufacturing plant, it is crucialthat the proposed location is located in an Industrial area and the development should be taken into consideration to avoid inconvenience to the manufacturing company and to the community as well. It should be near seaports, roads, and airports for faster transportation of the product to the manufacturers. It should also satisfy the assigned criterion. 2.1.1.5.1 Proposed Location

The three proposed locations for the MIBK manufacturing plant are (1) Light Industry and Science Park 4 (LISP IV), (2) SuntrustEcotownTanza (SET), and (3) Hermosa Ecozone Industrial Park (HEIP). Light Industry and Science Park 4 (LISP IV):

Figure 2.16 Light Industry and Science Park 4 (LISP IV) Location

Light Industry and Science Park IV includes a 200- hectare industrial area, and a 40  –  hectare   hectare residential area. It is strategically located near the Southern Luzon expressway to provide a convenient access for the transportation of products. It is also 35 Kilometers away from the Batangas International seaport, 59 Kilometers from the Ninoy Aquino International Airport, and 44 Kilometers from Alabang, Muntinlupa and 65 Kilometers from Makati city where the foreign expats and the central business resides. The location of the Light Industry and Science Park IV was able to withstand the worst floods in the area for a hundred years and is readily available for development. It already has a reliable electricity supply, steady water supply, and In-house security and firefighting f irefighting capabilities, capabilities, Transportation system. It also provides a people and business environmental haven since it is located in the grassy plains of Malvar, Batangas. It is also registered by the Philippine Economic Zone Authority (PEZA) as a Special Economic Zone. Table 2.11 General Information of Malvar, Batangas Country

Philippines

Region

Calabarzon (Region IV-A)

Province

Batangas

District

3rd  District

Barangays

15

Area

3300 hectares

Population

43,937

ZIP Code

4233

Dialing Code

43

Income Class

2nd  Class

Source: Malvarbatangas.gov.ph Malvarbatangas.gov.ph Malvar Batangas is surrounded by the City of Tanauan on the north, the Municipality of Sto. Tomas on the east, the City of Lipa on the south, and the Municipality of Balete on the west. It is located in the northeastern part of the Batangas Province. The municipality is mainly used for Residential (447.56 hectares), Industrial (499.50 hectares), Agricultural (1655.07 hectares), and solid waste facility (0.58 hectares) area. The power supply of Malvarbatangas is supplied by BATELEC II Electrical Cooperative, Inc. It was National Electrification Administration (NEA) registered on August 12, 1977. It is one of the two suppliers of electricity in the Batangas province. Table 2.12 Electric Charge for BATELEC II RATE CHARGE

Residential Residential

Commercial

(perKwH)

Average Rate

8.6322

7.2768

Industrial Small

Large

scale

scale

7.2768

6.1318

The water supply in MalvarBatangas is supplied by the Metro Lipa Water District (MLWD). MLWD chlorinates the water supplied to the consumers by using electromagnetic dosing pumps. For areas with high iron content, they are treated with a two-stage two -stage iron filtration system. MLWD also conduct regular water sampling in the pipes to ensure the quality of their water supply. MLWD is a DOHaccredited laboratory. SuntrustEcotownTanza SuntrustEcotownTanza (SET):

Figure 2.17 SuntrustEcotownTanza (SET) Location SuntrustEcotownTanza is a 160-hectare property in Tanza, Cavite but it is intended to extend up to 350 hectares of total land area. The industrial area will initially cover 111 hectares and will be Philippine Philippine Economic Zone Authority Authority (PEZA) registered. The SET will be environmental environmental friendly for commercial, residential, industrial, and institutional institutional development. It is 29, and 43 kilometers away from Makati Central Business District and Ortigas Central Business District, Respectively. It is also 36 kilometers away from the Manila port, and 28 kilometers

away from the Ninoy Aquino International Airport (NAIA). SET will give an advantage in transporting the product via Air and Sea transportation. Table 2.13 General Information of Tanza Cavite Country

Philippines

Region

Calabarzon (Region IV-A)

Province

Cavite

District

6th

Barangays

41

Area

9559.65 hectares

Population

226,188

ZIP Code

4108

Dialing Code

46

Income Class

1st

The municipality of Tanza is located 33 kilometers from the south of Metro Manila. It is also  bounded by Rosario on the north, General Trias on the east, and TreceMartires City on the southeast. While the Manila Bay and the Naic lies on the western and southwest of Tanza, respectively. The power supply of the municipality of Tanza is supplied by MERALCO, the largest distributor of electricity in the Philippines. MERALCO also supplies 36 cities and 75 municipalities here in the Philippines. Philippines. It already distributed electricity for 114 years.

Table 2.14 Rate of Charge of MERALCO in Cavite RATE CHARGE

Residential Residential

Commercial

Industrial

8.4433

7.9221

6.4152

(per KwH) Average Rate

The water Supplier for Tanza, Cavite is Tanza Water District. It provides sufficient supply of water for the community and deliver effective and efficient public service. It provides eight pump stations with ranging 40 –  60  60 hp and 220V –  460V.  460V. The pump used are vertical turbine and submersible.

Hermosa Ecozone Industrial Park (HEIP):

Figure 2.18 Hermosa Ecozone Industrial Park (HEIP): Hermosa Ecozone Industrial Industrial Park (HEIP) is located in the province of Bataan wherein it is a 478hectare with a 162-has provided for the Industrial estate. HEIP is a Philippine Economic Zone Authority

(PEZA) registered as special economic zone (Ecozone). HEIP is a township project of the Hermosa Municipality, which is managed by the Science Park of the Philippines, Inc. It is 20 and 96 kilometers away from the Subic Seaport and Manila South Harbor, respectively. It is also 99 kilometers and 35 kilometers away from the Ninoy Aquino International Airport (NAIA) and DiosdadoMacapagal International Airport (Clark), respectively. HEIP is strategically located in the growth corridor of Subic Bay Freeport Zone and Clark Special Economic Zone. HEIP is accessible through Subic-Clark-Tarlac Expressway (SCTEX). Table 2.15 General Information of Bataan Country

Philippines

Region

Central Luzon (Region III)

Province

Bataan

District

1st

Barangays

23

Area

15700 has

Population

65862

ZIP code

2111

Dialing Code

47

Income Class

1st

Sources: Hermosa.gov.ph Hermosa, Bataan is 21 kilometers from the capital of Bataan which is Balanga City and it is 105 kilometers away from Manila. It is mostly flat and gently rolling. The highest peak of the municipality is 400 meters above sea level which is located in the southwest of Barangay Mabiga and Tipo.

The Electricity distributor of the Hermosa Bataan is the Peninsula Electric Cooperative (PENELCO) and Manila Electric Company (MERALCO) but the power supplier of the HEIP is PENELCO since it provides a lower cost. Table 2.16 Rate of Charge of MERALCO in Bataan RATE CHARGE

Residential

Commercial

Industrial

Average Rate

7.665

6.663

5.52

The water supply in Hermosa, Bataan is being supplied by the Hermosa Water District Services. The HWDS supplies HEIP from a water recycling facility through a dual piping system. The piping system has a total capacity 18,000 m 3 per day. HEIP also has a centralized waste water treatment facility having a capacity of 12,000 m 3 daily. 2.1.1.5.2 Plant Location Criteria:

Table 2.17 Plant Location Criteria with description Criteria

Description

Availability of Saleable Area

The available saleable area should be considered in determining the plant location. since the size of the plant is yet to be determined, the alternative with the largest saleable area will be chosen.

Price of Area per sq. meter

The Price of Area should be considered to determine whether the area per sq. meter is too expensive.

Environmental Safety

The proposed plant should also not impose risks to the local communities. Nearby disposal location for the waste material should be considered

Consideration to nearby Communities

The proposed plant should be accepted by the local communities to avoid inconvenience in the operation of the plant.

Accessibility to Utilities

The proposed plant should be near the body of water suitable for its disposal. Cooling water can be taken from the river, sea, and lake.

Transportation of Raw Materials

The suppliers of the raw materials should be close to the proposed plant for

Transportation of Product

The convenience in transporting the product to the manufacturers is a factor to be considered. Faster delivery of products to the costumers is important.

Availability of Qualified Workers

Availability of Qualified Workers is a factor to  be considered since they are needed for the construction and the operation of the plant.

Climate

The temperature, relative humidity and dry seasons should be considered in choosing a  plant location

2.1.1.5.3 Selected Plant Location

Decision Makers: Member 1: Yves Robin Pines Member 2: Ashraf Helmy Mohamed Yehia Member 3: Russel Marc Pepito Alternatives:

•

Light Industry and Science Park 4 (MalvarBatangas)  –  100 has. Price per sq. area: Php 5,500.00

•

SuntrustEcotownTanza (Tanza, Cavite) –  90 has. Price per sq. area: Php 5,000.00

•

Hermosa Ecozone Industrial Park (Hermosa, Bataan) –  85 has. Price per sq. area: Php 4,000.00 Table 2.18 Rating of criteria Criteria

Member 1

Member 2

Member 3

Availability of Saleable

7

9

10

7

8

8

Environmental Safety

8

8

9

Consideration to

8

8

7

Accessibility to utilities

7

9

8

Transportation of Raw

7

9

9

7

9

9

6

8

8

7

7

6

Area Price of Area per sq. meter

nearby Communities

materials Transportation of Product Availability of Qualified Workers Climate

Table 2.19 Weights for the Criteria Criteria Availability of

Member

Weight

Member

Weight

Member

Weight

Average

1

1

2

2

3

3

Weight

7/64

0.109375

9/75

0.12

10/74

0.1351

0.1215

7/64

0.109375

8/75

0.1067

8/74

0.1081

0.1081

Saleable Area Price of Area per sq. meter

Environmental Safety

8/64

0.125

8/75

0.1067

9/74

0.1216

0.1178

Consideration to

8/64

0.125

8/75

0.1067

7/74

0.0946

0.1088

7/64

0.109375

9/75

0.12

8/74

0.1081

0.1125

7/64

0.109375

9/75

0.12

9/74

0.1216

0.1170

7/64

0.109375

9/75

0.12

9/74

0.1216

0.1170

6/64

0.09375

8/75

0.1067

8/74

0.1081

0.1029

7/64

0.109375

7/75

0.0933

6/74

0.0811

0.0946

nearby Communities Accessibility to utilities Transportation of Raw materials Transportation of Product Availability of Qualified Workers Climate

Table 2.20 Rubric Scale Criteria

Poor (0.00)

Availability of Saleable Area

The available area of has Is below 30

Price of Area per sq. meter

The price of land is overpriced

Environmental Safety

The location has no facility for waste water

Fair (0.40)

Good (0.60)

The available area of The available area of has Is between 31has Is between 6160 90 The price of land is The price of land is high compared to affordable and fair other prices The location has a facility for waste water

The location has a facility for waste water; Parameters for discharging waste water are controlled; programs for environment  protection are considered

Excellent (1.00) The available area of has Is above 91 The price of land is very affordable and reasonable The location has a facility for waste water; Parameters for discharging waste water are controlled; Excellent programs for environment  protection are considered

Consideration to nearby Communities

The plant is not accepted by the local community; The

Only Few people of the local community accepted the project

Most of people of the local community accepted the project

The plant is accepted  by the local

 plant is not safe for the local community ;  Not considered as a source of new jobs and economic opulence

in their community; The plant is safe for the local community; Considered as a source of new jobs for few and economic opulence

 plan in their community; The  plant is safe for the local community; Considered as a source of new jobs and economic opulence

community; The  plant is safe for the local community; Considered as a source of new jobs for many and economic opulence

Accessibility to utilities

Transportation of Product

The Airports, Bridges, Ports, Rail, Roads are not accesible

Some of the The Airports, Airports, Bridges, Bridges, Ports, Rail, Ports, Rail, Roads Roads are accessible are accessible and with a few hours too far from the location Transportation of Raw materials The location of The location of The location of manufacturer is too manufacturer is far manufacturer is near far from the location; from the location; from the location; Airplane or ship is Fuel cost for vehicle Fuel cost is fair required as a mean is quietly high for transportation

The Airports, Bridges, Ports, Rail, Roads are easily and instantly accessible

The location of supplier of raw material is too near from the location; Fuel cost is relatively low

Availability of Qualified Workers

Climate

Few skilled and unskilled workers are available in the area

The location of the  plant cause a hindrance in the  production because of the climate

Considerable number of skilled and unskilled workers are available in the area The location of plant may occur a few  problems regarding  precipitation, humidity, temperature and dry season.

A lot of skilled and unskilled workers are available in the area The location of plant has no problem regarding  precipitation, humidity, temperature and dry season.

Many skilled and unskilled workers are available in the area Factors affecting the  plant such as  precipitation, humidity, temperature and dry season are beneficial

Rating: Table 2.21 Member 1 Rating Criteria

Light Industry and

SuntrustEcotownTanza

Science Park 4 Availability of

Hermosa Ecozone Industrial Park

0.7

0.6

0.7

0.6

0.5

0.5

Environmental Safety

0.8

0.7

0.8

Consideration to

0.4

0.4

0.5

0.6

0.7

0.6

0.6

0.7

0.6

0.6

0.6

0.6

0.5

0.6

0.5

0.7

0.7

0.7

Saleable Area Price of Area per sq. meter

nearby Communities Accessibility to utilities Transportation of Raw materials Transportation of Product Availability of Qualified Workers Climate

Table 2.22 Member 2 Rating Criteria

Light Industry and

SuntrustEcotownTanza

Science Park 4 Availability of

Hermosa Ecozone Industrial Park

0.8

0.8

0.7

0.7

0.8

0.7

Environmental Safety

0.8

0.7

0.8

Consideration to

0.7

0.6

0.7

Saleable Area Price of Area per sq. meter

nearby Communities Accessibility to

0.8

0.7

0.6

0.6

0.7

0.6

0.7

0.6

0.6

0.6

0.7

0.7

0.7

0.8

0.6

utilities Transportation of Raw materials Transportation of Product Availability of Qualified Workers Climate

Table 2.23 Member 3 Rating Criteria

Light Industry and

SuntrustEcotownTanza

Science Park 4 Availability of

Hermosa Ecozone Industrial Park

1.00

0.90

0.80

0.80

0.90

0.90

0.70

0.90

0.80

0.90

0.80

0.60

0.60

0.80

0.80

0.70

0.70

0.80

0.80

0.90

0.70

0.90

0.80

0.90

0.90

0.90

0.90

Saleable Area Price of Area per sq. meter Environmental Safety Consideration to nearby Communities Accessibility to utilities Transportation of Raw materials Transportation of Product Availability of Qualified Workers Climate

Table 2.24 Average Scores Criteria

Average Weight 0.1215

Light Industry and Science Park 4 (Average Rating) 0.8333

SuntrustEcotownTan za (Average Rating) 0.7667

Hermosa Ecozone Industrial Park (Average Rating) 0.7333

Availability of Saleable Area Price of Area  per sq. meter Environmental Safety Consideration to nearby Communities Accessibility to utilities Transportation of Raw materials Transportation of Product Availability of Qualified Workers Climate Sensitivity Analysis

0.1081

0.7

0.7333

0.7

0.1178

0.7667

0.7667

0.8

0.1088

0.7333

0.6

0.6

0.1125

0.6667

0.7333

0.6667

0.1170

0.6333

0.7

0.6667

0.1170

0.7

0.7

0.6333

0.1029

0.6667

0.7

0.7

0.0946

0.7667 0.7191

0.8 0.7220

0.7333 0.6928

Sample Calculations: Sensitivity Analysis =0.1215(0.8333) + 0.1081(0.7) + 0.1178(0.7667) + 0.1088(0.7333) + 0.1125(0.6667) + 0.1170(0.6333) + 0.1170(0.7) + 0.1029(0.6667) + 0.0946(0.7667) = 0.7191 Conclusion:

Since the SuntrustEcotown Plaza has the highest sensitivity analysis, it’s the best option for the  plant location of the Methyl Isobutyl Ketone Plant.

Land Area (Class 5 Estimate)

Land Area estimation is based on a ratio-and-proportion calculation from MIBK and IPA plants that already exists in other countries. •

 MIBK

Carboclor Company is located at Campana, Argentina. 2.56 has is the total land area (for MIBK plant only). The capacity of their production is 8000 metric tons per year of MIBK •

 IPA

Dow Chemical Company is located at Texas, USA. 25.84 has is the total land area (for IPA plant only). The capacity of their production is 473,000 metric tons per year of IPA.

Summarized data for the capacity and land area

The calculated Class 5 estimate for land area is 4.88 has.

2.1. 2

Competitor Environs

 Methyl Isobutyl Ketone

In order for the proposed Manufacturing plant to be competitive in the ASEAN market, the companies from the neighboring countries were included in the analysis. These are: Table 2.25 ASEAN Manufacturers Country

Company

Location 20, Tuas Street, Singapore

Singapore

638457

Go Dau Industrial Zone Viet Nam

Long Thanh District, Dong  Nai Province  No.29, Jalan PJU 3/49

Malaysia

Sunway Damansara Technology Park 47810 Petaling Jaya Selangor Darul Ehsan.

Local Competitors:

Figure 2.19: Logo of Coastal Bay Chemicals, Inc.

Coastal Bay Chemicals, Inc. is located in the coastline of Bauan,Batangas Philippines. It specializes in the Importation bulk chemical raw materials, manufacturing of latex products, handling and storage of various chemicals, and delivery service of chemicals to its consumers.

Figure 2.20 Logo of California Chemicals Corporation California Chemical Corporation islocated in Facility Center 548 A Shaw Boulevard 1550 Mandaluyong, Philippines. This company is a major supplier of solvents and industrial chemicals. This company established in 1977 and now serving and evolving in various industries such as Paint and Ink Manufacturing, Flexible Packaging Converters, Automotive and Auto Parts Manufacturers, Plastic MouldingIndustries ,Personal Care and Household Products,Offset and Flexographic Printers.The company takes pride in supplying products from trustworthy principals to guarantee high quality  products.

Figure 2.21 Logo of Chemisol Incorporated

Chemisol Inc. is a major chemical supplier of solvents and chemicals in the Philippines.Chemisol serves the paint, ink, adhesive, resin, pharmaceutical, chemical, food, cosmetics, agricultural, and other industries. In 1995, it started out as Quebros Enterprise by four brothers. The business was firstly engaged in food oil blends, plastic colorants and snack food seasoning materials. The business eventually developed to include other chemical products to serve the textile industry, paint industry, and other chemical industry. The company has a highly regarded for the value it was offering for its client. The company gained the trust and confidence of the chemical industry because of always giving the best quality product with personalized service and the most competent technical service. In 2008, Chemisol Inc. was formed to focus on distributing Shell chemical products. Being its high-class distributor in the Philippines, Chemisol Inc. aims to give the Philippine chemical industry the best conceivable combination of world class Shell chemical products and services.

Figure 2.22 Logo of SBS Philippines Corporation One of the leading chemical trader-distributor in the Philippines is SBS Philippines Corporation,  providing a various customer base of more than 1,800 customers nationwide with 3000 chemical products sourced from more than 500 suppliers. The Company was newly admitted on the Main Board of the Philippines Stock Exchange with its shares traded under the ticker symbol “SBS”.

 Isopropyl Alcohol

Manufacturing plants of Isopropyl Alcohol in neighbouring countries were included in the analysis. These are:

Table 2.26 ASEAN Manufacturers Country

Company Singapore

Location The Metropolis Tower 1. 9  North Buona Vista Drive,

#06-01.Singapore 138588. Malaysia

No.23, Jalan 3/3C Sri Utara, Off Jalan Ipoh Mukim Batu 68100 Kuala Lumpur Malaysia.

Go Dau Industrial Zone Long Viet Nam

Thanh District, Dong Nai Province

Local competitors:

Figure 2.23 Philusa Corporation

Philusa Corporation is dedicated to providing high quality and competitive products and services to customers by exceeding their expectations on time. The company strive for continuous quality improvements in all, through team work, for the benefit of the customers, employees and other interested  parties. The employees, take ownership and responsibility for the quality of our products, services and  processes.

Figure 2.24 Century Chemical Corporation

Century Chemical Corporation (CCC) was established in 1962 by a group of Filipino businesspersons to answer the rising demand for quality paint products in the market. Hudson was launched to deliver  premium paints for households and industries. The success of HUDSON firmed up CCC's status as a  provider of superb paint and related products. CCC, is an innovative company. It was the first in introducing polyurethane paint in the Philippines through HUDSON wood varnish. In automotive refinishing industry, ANZAHL paint was accountable for commercializing the polyurethane paint system. CCC's ever commitment to quality, customer fulfilment, continuous product research and innovation, concern for the environment, as well as its employees, allow the company to reach the status as one of the leading chemical companies that it is today.

Figure 2.25 Cosmetique Asia

In 2001, Cosmetique Asia  was established. With the overview of its flagship brand, Silka Papaya, the company decided to venture into the rising growth of cosmetic industry in the Philippines. Cosmetique Asia is directed by its founder Mr. Alexander S. Co, who has over 40 years of experience in cosmetic retailing. After a worthy market acceptance of the Silka Papaya product line, Cosmetique Asia launched another brand, Juicy Cologne, the company’s first foray in the perfume industry.  Currently, Cosmetique Asia is continuously growing and adding variation of cosmetic products for the benefit of its consumers.

2.2 TARGET MARKET

 Methyl Isobutyl Ketone is a chemical known for many uses such as: Solvent: MIBK is mainly used as a solvent in cellulose-based and resin-based coatings and adhesives. It

is also used as a solvent in:

•

Metal extraction. MIBK is used as a solvent for metal separation.

•

Pharmaceutical. Solvents used for extracting the pharmaceutical products and antibiotics.

•

Agrochemical.  MIBK is being used extensively with agrochemical areas such as germicide,

fungicide and pesticides. Rubber: MIBK is used as a raw material in the manufacture of rubber antiozonants and protects diene

rubbers such as natural rubber, styrene-butadiene rubber and nitrile-butadiene rubber. Diene rubbers have high percentage of unsaturation and are susceptible to ozone attack which leads to surface cracking. Cleaner: MIBK is used as a industrial cleaner. It acts as a degreaser or deoiler of petroleum product.

 Isopropyl Alcohol is a chemical known for many uses such as: Solvent: IPA is used widely as a solvent and as a cleaning fluid, especially for dissolving oils. Intermediate: This compound may serve as a chemical reagent in itself, by acting as a dihydrogen donor

in transfer hydrogenation.

Medical: Rubbing alcohol, hand sanitizer, and disinfecting pads typically contain a 60 – 70% solution of

isopropyl alcohol in water. Automotive: IPA is a major ingredient in "gas dryer" fuel additives. Laboratory:  IPA provides a comparatively non-toxic alternative to formaldehyde and other synthetic

 preservatives. It is used in DNA extraction. It is added to a DNA solution in order to precipitate the DNA which then forms a pellet after centrifugation. 2.2.1 Local Market of Methyl Isobutyl Ketone

Listed below are the local manufacturing companies that can be a conceivable buyer or consumer of MIBK with address and contact detail. Table 2.27.Philippine Manufacturers that use solvent in manufacturing Company name

Address

Telephone number

Benquin Triple 8 Chemicals, Inc.

Blk 110 Lot 5 Villa Vienna

63--4613084

 NeopolitanSubd.,Regalado Ave., cor. Mindanao Ave.Brgy. Greater Lagro, Quezon City TOPLINECHEM

Marketing 022 Rose Road, Sea Breeze

Corporation

+63 46 431-1392

Subdivision, Sta. Cruz, Cavite City, Cavite

Obetech Pacific Philippines

Ph8 VgpCenter

+639089553253

6772 Ayala Avenue 1226 Makati City,Philippines AIK MOH Paints and Chemicals

Unit 1809, Medical Plaza Ortigas

+63 2 637 8532

Building, San Miguel Avenue, OrtigasCenter, 1605, Pasig City Alkemia Industrial Supply

Unit 10-01 One Global Place 5th Avenue

corner

25th

St.,

Bonifacio Global City, Metro

09176358979

Manila  Nextlube

18B Basilio Street Brgy Acacia Malabon

City

09272957316

Philippines,

Malabon, Metro Manila LjsIntracs Corp

8481 Sandoval Ave. Greenwoods +63(2)6425608 Subdivision

Emtec Philippines Inc.

Phase

IV, +63(921)4331980

Pinagbuhatan Pasig City, Pasig

+63(2)7383865

City, Metro Manila

+63(2)6643864

72 Mayor Ignacio S. Diaz Street,

(+63-7239121 and 7268368)

Brgy. San Martin De Porres, Cubao,

Quezon

City,

Metro

Manila Benquin Triple 8 Chemicals, Inc.

Block 110 Lot 5, Villa Vienna

02-4613084

 Neopolitan

Subdivision,

02-4613113

Regalado Ave., Brgy. Greater

02-4613115

Lagro,

Quezon

City,

Metro

Manila CHEMREZ Incorporated

L B L Building 65 Industria

6350680

Road Bagumbayan 1100, Quezon City  NIPPON Paint Philippines Inc.

#4 Hologram St. Lisp Brgy.

(049)543-0763 / 845-1176

DiezmoCabuyao Laguna Crystal Resins Incorporated

Pacific

Paint

Philippines, Inc.

(Boysen)

141 Cabrera Road, SitioBurol

022863011

San Juan Taytay Rizal

022863011

292 D. Tuazon St. Quezon City,

364-3505; 365-0561 to 64

 NCR - Second District 1115

361-7164; 367-8881

Table.2.28 Rubber manufacturers in the Philippines Company name

Address

Telephone number

Manila Rubber Corporation

50

JP

Ramoy

Road 0917 5000096

TalipapaNovaliches , Caloocan City, Metro Manila, Philippines Precision

Seals

&

Rubber

Products, Inc.

Rimas

Street, 09152334934

BrgyWilfredoAquino,

Agdao, 09209699262

Davao City, 8000 Philippines, Region 11, Davao City, Davao del Sur Manhattan Rubber & Plastic

1422

Gov.

Manufacturing Corporation

Malinta

I.

Santiago

Valenzuela

St.,

294-60-56

Metro

Manila Kings Rubber International, Inc.

Main Road cor. 4th St., FCIE

(63-46) 402-1201; (632) 928-

Governors Drive, Dasmariñas, 6791 4114 Cavite Cavite Region 4 Fukai Rubber Phils. Inc.

#

6

(049)5314

BatallonesWhouseBanaybanay , (049)520 Cabuyao, Laguna Orion

Rubber

Manufacturing Raminel Road., T. Santiago St.

Corporation

294-1370

Valenzuela, Metro Manila

Table 2.29 Industrial cleaner Manufacturers in the Philippines Company name

Address

Telephone number

Chemlux, Incorporated

Building 4A, CCMC Compound

+63(2)8392380

Veterans

Center,

Western

+63(2)8370259

Bicutan. P.C. 1631, Taguig City, Metro Manila. Super Sphere Inc.

UG14 Cityland Pioneer Building,

63-9157927588

128

Pioneer,

Metro

Manila,

Philippines

2.2.1.1 Local Market of Methyl Isobutyl Ketone

Listed below are the local manufacturing companies that can be a conceivable buyer or consumer of IPA with address and contact detail. Both MIBK and IPA acts as a solvent. Manufacturers of solvents are included in the MIBK section. Table. 2.30 Intermediate Manufacturers in the Philippines Company name

Address

Telephone number

JG summit Petrochemicals

Barangay Simlong, Batangas +63 43 740 5600 City, Philippines 4200

Table. 2.31 Automotive Manufacturers in the Philippines. Company name

Address

TOYOTA

Telephone number

MOTOR Toyota Special Economic Zone

PHILIPPINES CORP.

(TSEZ),

Santa

Rosa

+632 819-2912

City,

Laguna

ISUZU

PHILIPPINES 114

CORPORATION

Technology

Avenue, +6349 541-0224 (Laguna), +632

Laguna Technopark, Phase II,

584-4081 to 06 (Manila)

Biñan, Laguna HONDA CARS PHILIPPINES,

105

South

Main

Avenue,

INC.

Laguna Technopark, Sta. Rosa,

+632 857-7200

 

Laguna

2.2.2 Export Market for Methyl Isobutyl Ketone & Isopropyl Alcohol

According to the Product Complexity Index (PCI), Methyl Isobutyl Ketone is the 3444th most traded product and the 1234th most complex product. Asia dominates the demand for Methyl Isobutyl Ketone. The company does not only focus on the demand in the Philippines but also focus on other countries that have high demand on MIBK. Asia countries that have high demand of MIBK are China, India, Vietnam and Thailand. The company’s purpose in selecting these countries as its market is based

on the following criteria: location, based on organizational partnership and demand. The company will not be exporting IPA because the available market on the Philippines is already too large compared to the amount that the plant will be producing. 2.2.2.1 Export Market Based on Location

India and Thailand are the countries that have high demand of Methyl Isobutyl Ketone (MIBK). Mumbai, India distance from Tanza, Cavite, Philippines is about 5125.40 kilometers and it takes 6.88 hours. Bangkok, Thailand distance from Tanza, Cavite, Philippines is about 2196.40 kilometers and it takes 3.25 hours to travel.

Figure 2.26 Tanza, Cavite, Philippines to Mumbai, India travel distance

Figure 2.27 Tanza, Cavite, Philippines to Bangkok, Thailand travel distance Photos and data retrieved from distancefromto (2017). China is one of the top importer of MIBK. Tanza, Cavite, Philippines is 2877.13 kilometers away from Beijing, China, the time of arrival is about 4.08 hours. Vietnam is a country that has a high demand of MIBK. Hanoi, Viet Nam is 1756.47 kilometers away from Manila, Philippines and it takes 2.48 hours to travel.

Figure 2.28 Tanza, Cavite, Philippines to Beijing, China travel distance

Figure 2.29 Tanza, Cavite, Philippines to Hanoi, Viet Nam travel distance Photos and data retrieved from distancefromto (2017).

2.2.2.2 Export Market Based on Organizational Partnership

Since Vietnam, Indonesia and Thailand are part of Association of South East Asian Nation (ASEAN) which also includes Brunei, Cambodia, Singapore, Lao, Malaysia, Myanmar and Philippines. In spite of the fact that, there would be still import tariffs in some products, being part of this organization will be a great advantage for the company since there are still other goals of this organization like the mutual support and active cooperation of mutual interest in the cultural, scientific, technical, social, administrative and economic fields. 2.2.2.3 Export Market Based on Demand

Based on the data of import in the past 6 years, the five countries below are the one that are considered to have a steadily increasing demand growth. This makes them the primary target of the company once the demand in the Philippines is satisfied. China

China is the top importer of MIBK in the world. Based on the plot of the import, the growth is  positive which shows an increase in demand. It is projected that 62 kilograms of MIBK will be imported in 2017.  India

India being the second importer of MIBK in the world. The projected demand for 2017 is 28 M kg of MIBK. Vietnam

Viet Nam being one of the neighboring countries in the Philippines has a high demand of MIBK. Based on the graph of the import, the demand trend line is linear and positive. The projected demand in 2017 in Vietnam is 3.3 M kg.

Thailand

Thailand being one of the top importer of MIBK in the world. The growth in demand is positive which means the slope is positive. Based on Figure 2.29, the projected demand for 2017 of MIBK is 4.2 M kg. The growth rate of IPA is increasing and the projected value in 2017 is 31 M kg.

2.3 SWOT ANALYSIS

Table 2.32 SWOT Analysis Matrix Strengths

1.

2.

3.

The country will depend less on the import of Methyl Isobutyl ketone and Isopropyl alcohol The company will be a domestic supplier of Methyl Isobutyl Ketone and Isopropyl Alcohol Raw materials are readily available in the country

Opportunities 1. There’s a growing dema nd

2. 3.

1.

2. 3.

Brand name is not yet recognized High Start-up Cost Employees needs Training

1-1 Aggressive Marketing 1-2 build and maintain a good relationship with suppliers to get the lowest price of raw materials in the market - this will give the company the advantage of providing a competitve price to attract customers. S-T strategy

There are already established companies locally and internationally

1.

W-O strategy

locally Improving economy and employment of the country Decreasing imports

Threats

Weaknesses

1-1 build partnership with investors: business to business dealings with customers and suppliers 1-2 widen reach in the market: set up an effective distribution strategy to reach customers. 1-3 provide a competitive pricing strategy in the market to attract customers

2.4 MARKETING OBJECTIVES AND GOALS

This part of the study tackles the plans of the company for the years of its planning, building, and starting capacity then up to the year of it achieving its full capacity.

2.4.1 Market Share

To obtain the estimated capacity of the plant, first a forecast of the demand must be done. In this study, the forecasts are to be reflected in the next 10 years. To obtain the optimal forecast system, three methods from the software POM-QM were considered, Moving averages method, Naïve method and the Trend Projection Method in the software POM-QM.

Figure 2.30 Sample Result in Moving Averages method forecast for 2027

Figure 2.31 Sample Result in Naïve method forecast for 2027

Figure 2.32 Sample Result of Trend Projection Method forecast for 2016 - 2030 Looking at the standard error of the results of each method, it can be seen that Trend Projection Method has the lowest value, making it the ideal method for the forecast of demand in the following years. The company envisions achieving its full manufacturing capacity after a year of its opening which will be on year 2022.

Table 2.33 Total Demand based on Import of MIBK Year

Total Available Market (kg)

2011

32,106,989

2012

53,065,294

2013

80,630,405

2014

81,197,716

2015

85,199,402

Forecasted amount at target year

187,325,500

(2022)

 200,000  180,000  160,000     )  140,000    T    M 120,000     (    e     l     b  100,000    a     l    i    a  80,000    v    A  60,000

 40,000  20,000 2016

2017

2018

2019

2020

2021

2022

Year

Figure 2.33 Forecasted Available Market for MIBK Table 2.34 Total Demand based on Import of IPA Total Available Market (kg) 2011

15,196,332

2012

15,796,376

2013

18,443,946

2014

16,581,009

2015

15,732,835

2016

24,465,956

Forecasted amount at target year

28,460,010

(2022)

30000 25000     ) 20000    T    M     (    e     l     b 15000    a     l    i    a    v    A10000

5000 0 2017

2018

2019

2020

2021

2022

Year

Figure 2.34 Forecasted Available Market for IPA The following calculations are based on the book Towler and Sinnott (2008). Since the manufacturing plant to be constructed is only new, the estimated capacity was chosen to not exceed the largest manufacturing plant of MIBK in the world, Celanese in La Cangrejera, Mexico which has 50,000MT capacity per year. The company decided to target an annual capacity that is about the same as the average capacity of existing MIBK manufacturing plants, which is 30,000MT. The estimated market share was obtained by dividing the estimated capacity by the total forecasted amount of MIBK. The estimated capacity of the IPA part of the plant would be determined by using the 30,000MT capacity of MIBK and using the ratio of IPA produced per MIBK stated in the manufacturing process to be used.

Estimated Market Share for MIBK:

30,000,000  = 0.1601 187,325,500  MIBK to IPA production ratio:

  =  

19.13

Estimated IPA Capacity:

30,000,000  = 1,568,217.46 kg 19.13 Estimated Market Share for IPA:

1,568,217.46  = 0.0551 28,460,010  The estimated capacity of the plant is to be approximately 30,000 MT of MIBK and 1,600 MT of IPA. The market share of MIBK and IPA will be about 16% and 5.5% respectively. 2.4.2 Market Volume

The planning phase will start at 2018 and last for a year and the construction phase of the manufacturing plant will last for two years, the company will be producing MIBK by the year 2021. For its first year, the manufacturing plant will be producing 50% of its capacity. The plant will then its capacity to reach the intended 30k MT of MIBK and 20k MT of IPA. The company will be in stable full capacity by 2022.

2.5 MARKETING STRATEGY

Since the trend of MIBK imports here in the Philippines is decreasing and there are already established companies producing MIBK such as California Chemicals Corporation, Chemisol Inc., and SBS Philippines corporation, the company will be selling locally, in ASEAN countries, and countries in the Asia Pacific since there is a growing demand in our neighboring countries. Also, the Philippines is currently not exporting MIBK. The target market of the company in ASEAN countries are: Vietnam and Singapore. As for the countries in the Asia Pacific, these are: China and India. With the increasing demand of MIBK in Asia, the company will also expand to satisfy the growing demand in Asia and  provide a reasonable price with a premium quality to avoid bankruptcy. IPA import in the Philippines is increasing. Since there are already companies that produce IPA such as Philusa, Century Chemical Corporation and Cosmetique Asia, imports from other country will be lessen. The company will expand as the demand of IPA is increasing in Asia to maximize profit.. 2.5.1 LOGISTICS

This part of the study discusses handling of the products of the company. This includes the  packaging, storage, and transport of the products. 2.5.1.1 Packaging

 Methyl Isobutyl Ketone

Suitable packaging material for MIBK is stainless or mild steel drum. Since, mild steel is more economical and cheap than stainless steel. Mild steel contains approximately 0.05 – 0.25% carbon making it malleable and ductile. The container should be stored in a well-ventilated area in a fire resistant container. The capacity of the mild steel drum is 210 liters and the thickness is 1mm. The weight of the drum excluding the MIBK product is about 19 kilograms. The price range of the drum is Php 3600 to 3800. The storage temperature should be ambient condition to prevent explosion. Metal containers should  be bonded and grounded for transfers to avoid static sparks. Static electricity is generated by the contact and separation of different material. Non-sparking tools and equipment should be used when opening or

closing metal container such as mild steel drum. The unsuitable material for packaging MIBK are plastic, aluminum, natural neoprene and nitrile rubbers because MIBK can physically change the container by absorption, resulting in softening and swelling of the plastic; permeation of MIBK through the plastic.  Isopropyl Alcohol

Suitable packaging material for IPA is plastic drum. Carbon steel drum can be used for the storage of IPA but plastic drums are cheaper than metal containers. Plastic drums are made out of HDPE (High Density Polyethylene), and most are UN Certified as well as FDA Approved. IPA should be kept in a closed container in a cool, dry, well-ventilated area. Due to the chemical’s extreme flammability, it must  be kept away from all possible ignition sources, including heat, sparks, and flames. The capacity of the drum is 200 liters. The drum has a close top with two holes. The weight is about 8 to 9.2 kilograms. The  price ranges to Php 800 to 1000 depending on the supplier’s price. The handling temperature should be

ambient. The thickness of the drum would range from 4 to 5 mm. 2.5.1.2 Transportation

The mode of transportation to be used for transporting tanks is isotrucks. This is suitable for land transportation. For exporting MIBK and IPA products, cargo ships are used by sea. Retrailer trucks are used for transporting drums.

Figure 2.35 An Isotruck

Figure 2.36 A Cargoship

Figure 2.37 A Trailer Truck 2.6 MARKETING TACTICS

Marketing tactics are done to promote MIBK product with the goal of increasing sales and maintaining a competitive product. The purpose of this tactics is to return the capital money invested. Several factors that must be considered for marketing tactics are:  Pricing

Price is a critical part of marketing. Selecting a good price for products will help the company to make the most of profits. By pricing efficiently, severe financial consequences can be avoided that can occur if you price too low (not sufficient profit) or too high (not sufficient sales). Skilled Manpower

Skilled professionals are to be assigned evenly among the production staffs, accounting, engineering,researchand management to ensure the quality of Methyl Isobutyl Ketone product. The company will provide incentives to motivate workers working in the company (which includes salary, and others benefits for the workers and the company capability on it).They must be qualified and trained so that the quality of the operation, the maintenance and control for the unit operations and the product will  be ensured.  Market Partner

Having a market partner with target market can be a benefit for less transportation cost which leads to higher profit. Partnership marketing brings bigger marketing exposure and shares in the strength of partner's brand.  Plant Location

Plant location can be considered as a factor for marketing tactics. Target market that is near from the plant location minimizes transportation cost and time. Time and cost considered as a big factor for sales and production.

Preliminary Economic Evaluation: Class 5.

The following correlation is used for estimating the capital cost of a plant by using the Cost of Plant Equipment (Towler, 2013):

 =+  Where Ce =purchased equipment cost on a U.S. Gulf Coast basis, January 2006 a , b = cost constants S = size parameter n = exponent for that type of equipment From the Table 6.6, Purchased Equipment Cost for Common Plant Equipment (Towler, 2013), the following values are for purchased equipment cost on a U.S. Gulf Coast basis. From the summation of calculated purchased equipment, there will be an estimation for the capital cost of the plant. The plant consists of eight U-tube Shell and tube Heat exchangers, two centrifugal compressors, three distillation columns and three separators. For U-tube shell and tube,

Slower  = 10.0 m2

Supper  = 1,000.0 m2

a = 10,000

b = 88

n= 1.0

From taking the value of S, there must be an average value of S lower and Supper ,

 =  +2  By substituting the given values, value of S is obtained.

 = 10.0+1000.0 = 505.0  2

By using the equation 6.15 (Towler,2013), Cost of Equipment will be obtained.

 =10,000+88505. =$54,440 Since the plant has 8 shell and tube heat exchanger, the obtained value for the cost will be multiplied by 8.

   ℎ ℎ    ℎ = $544404 = $ 217760 For Centrifugal compressors,

Assumptions considered: Centrifugal compressor. S upper is used. Slower  = 132.0 kW

Supper  = 29,000.0 kW

a = 8,400

b = 3,100

n= 0.6

From taking the value of S, there must be an average value of S lower and Supper ,

 =  +2  By substituting the given values, value of S is obtained.

 = 132+29000 = 14566 2 By using the equation 6.15 (Towler,2013), Cost of Equipment will be obtained.

 =8,400+3,10029,000. =$984211.38   ℎ   = $984211.381 =$.

For distillation columns; Pressure vessels, Packing, and Trays are being considered on calculation. a. Pressure vessels Assumptions considered: Vertical, 304 ss Pressure vessel used. Slower  = 90.0 kg Supper  = 124,200.0 kg

a = 10,000

b = 600

n= 0.6

From taking the value of S, there must be an average value of S lower and Supper ,

 =  +2  By substituting the given values, value of S is obtained.

 = 90+124200 =62145 2 By using the equation 6.15 (Towler,2013), Cost of Equipment will be obtained.

 =10,000+ 60062145. = $ 461019.10 Since the plant has 3 distillation columns used in the plant, the obtained value for  pressure vessel will be multiplied by 3.

     = $ 461019.104 =$1844076.53  b. Packing Assumptions considered: 304 ss Raschig rings a=0

b = 3,700

n= 1.0

By using the equation 6.15 (Towler,2013), Cost of Equipment will be obtained.

 =3700. =$3,700.00 Since the plant has 3 distillation columns used in the plant, the obtained value for packing will be multiplied by 3.

    = $37004 =$14,800 c. Trays Slower  = 0.5 m Supper  = 5.0 m

a = 100

b = 120

n= 2.0

From taking the value of S, there must be an average value of S lower and Supper ,

 =  +2  By substituting the given values, value of S is obtained.

 = 5+0.5 2 =2.75 By using the equation 6.15 (Towler,2013), Cost of Equipment will be obtained.

 =100+ 1202.75. =$1007.5 Since the estimated number of trays in the distillation column is 167. The obtained value will be multiplied by 167.

       = $1007.5167 =$168252.50      =      + +  =$1844076.53+$14800+$168252.5 =$.

For separators,

Slower  = 100.0 m3

Supper  = 10,000.0 m 3

a = 53,000

b = 2,400

n= 0.6

From taking the value of S, there must be an average value of S lower and Supper ,

 =  +2  By substituting the given values, value of S is obtained.

 = 100+10000 =5050 2 By using the equation 6.15 (Towler,2013), Cost of Equipment will be obtained.

 =53,000+2,4005050. =$453116.1 Since the plant has 3 separators, the obtained value for the cost will be multiplied by 3.

    = $4,054,161.382 = $ . For Reactors

Assumptions: Jacketed and agitated reactor Slower  = 0.5 m3

Supper  = 100 m 3

a = 14000

b = 15400

n= 0.7

From taking the value of S, there must be an average value of S lower and Supper ,

 =  +2  By substituting the given values, value of S is obtained.

 = 100+0.5 2 =50.25

By using the equation 6.15 (Towler,2013), Cost of Equipment will be obtained.

 =53,000+2,40050.25. = $ 252954.91    = $ 252954.91 Since the cost of per equipment are already calculated, the capital cost for the plant can  be obtained through the summation of all equipment cost.

   = ∑    +    = 4388287.6+ $ 4,880,000 For Land Area, Estimated needed Plant Area= 4.88 has Price per square meter = 5000 Assumption: 1 USD = Php 50

1   )( ℎ 5000 )( 1  )=$4,880,000     = 4.88 ℎ(0.0001 ℎ 1   ℎ 50 ISBL (Inside Battery Limit Investment) Plant Co st.

The total ISBL Plant Cost using the ISBL for MIBK is

 = $ . Offsite cost or OSBL.

From Towler, et. al. 2008. Chemical Engineering Design, “For typical petrochemical

 projects, offsite costs are usually between 20% and 50% of ISBL cost, and 40% is usually used as an initial estimate if no details of the site are known.”

= 0.40$ .   = $ ,,. Engineering Costs.

From Towler, et. al. 2008. Chemical Engineering Design, “A rule   of thumb for

engineering costs is 30% of ISBL plus OSBL cost for smaller projects and 10% of ISBL plus OSBL cost for larger projects.”

For larger projects:

  = 0.10 +    = 0.10 $ . +$ 3707315.04   = $ .

Contingency Charges.

From Towler, et. al. 2008. Chemical Engineering Design, “A minimum contingency

charge of 10% of ISBL plus OSBL cost should be used on all p rojects.” For this project a contingency charge of 15% of ISBL plus OSBL cost is used to account uncertainties in the technology.

 ℎ=0.15+

 ℎ = 0.15$ . +$ 3707315.04   = $. Working Capital.

From Towler, et. al. 2008. Chemical Engineering Design, “A typical figure for

 petrochemical plants is 15% of the fixed capital (ISBL plus OSBL cost).

  = 0.40+   = 0.40$ 9268287.6 + $ 3707315.04   =$. Variable Cost

•

Raw Materials

➢

Hydrogen gas

The purchasing price of H 2 is $0.99/kg. The gas will be supplied by Linde. ➢

Acetone

The purchasing price of Acetone is $0.80/kg. This will be supplied by APC Chemicals . ➢

Catalyst

A nano-crystalline zinc chromite-supported nano-palladium (n-Pd/n-ZnCr2O4) catalyst is used for the production of MIBK. The price of the catalyst is $3,000/kg which will be supplied by Yurui(Shanghai) Chemical Co., Ltd, Ruiyuan Group.

Table 2.35 Summary of the prices and mass flows of the raw materials Raw Materials

Price per kg

kg per year

Amount per year

H2

$0.99

2619240

$ 2593048

Acetone

$0.80

47470440

$ 37976352

n-Pd/n-ZnCr2O4

$3,000

-

$ 184628400

*61,542.8 kilograms of catalyst is used in the MIBK reactor.

   = $ 2593048 + $ 37976352 + $ 184628400    = $ ,, Fixed Cost.

•

Operating Labor

From Towler, et. al.

2008, Chemical Engineering Design, “For initial

estimates, an average USGC salary of $50,000 per shift position per year, not including overhead, can be used.”

  = $, •

Supervision

From Towler, et. al. 2008, Chemical Engineering Design, “Supervision is usually taken as 25% of operating labor.”

  = 0.25$ 50,000  =$,

•

Direct Salary Overhead

From Towler, et. al. 2008, Chemical Engineering Design, “Direct Salary Overhead is usually 40% to 60 % of operating labor plus supervision.”

  ℎ = 0.5050,000+$12,500    = $,

•

Maintenance

From Towler, et. al. 2008, Chemical Engineering Design, “Maintenance is typically estimated as 3 to 5% of ISBL investment.”

  = 0.05$ 9268287.6   =$.

•

Property taxes and insurance

From Towler, et. al. 2008, Chemical Engineering Design, “Property and taxes insurance are typically 1 to 2% of ISBL fixed capital.”

    = 0.01$ 9268287.6      = $ . •

General plant overhead

From Towler, et. al. 2008, Chemical Engineering Design, “General plant overhead,

charges to cover corporate overhead functions such as human resources, research and development (R&D), information technology, finance, etc. Corporate overhead varies widely depending on the industry sector. Oil refining companies that carry out minimal R&D have much lower overhead than pharmaceuticals manufacturers. Plant overhead is typically taken as 65% of total labor (including supervision and direct overhead) plus maintenance.”

  ℎ  = 0.65  +  ℎ +     ℎ  = 0.65$12,500+$31250+$463414.4    = $.

•

Allocated environmental charges to cover superfund payments

From Towler, et. al. 2008, Chemical Engineering Design, “Allocated environmental

charges to cover superfund payments is typically 1% of ISBL plus OSBL cost.”

 ℎ = 0.01+  ℎ = 0.01$ 9268287.6 + $ 3707315.04   = $

   = $50,000 + $12,500 + $31,250 + $ 463414.4 + $ 92682.88 + $ 88681.37 +$ 129756    = $ . Total Investment.

  =    +    +     = $225197800 + $ 868284.65+ $ 3892680.79   = $ ,,. SIMPLE PAYBACK TIME

Selling price of MIBK = $2.5 /kg (Retrieved from  Jiangsu Tubang Technology Co., Ltd. as of 2017) Capacity= 30,003,000 kg/year

      = (2.2 $ ,, 

     = $

Selling price of IPA = $ 2/kg (Retrieved from Qingdao HanHaiDa Import And Export Co., Ltd.as of 2017) Capacity= 1568040 kg/year

      = (2$  

     = $    = $ + $     = $,,     =        = $ ,,. $,,    = 3.33     ≈ 4 years RETURN OF INVESTMENT (ROI)

 100% =     $,, 100% = $ ,,.

 = .% Comparison with a Pure MIBK Production Plant

A class 5 feasibility study was also made in a manufacturing plant that only produces crude IPA which is not really marketable. The layout of the equipment is similar with the process that distills the crude IPA, the main difference is the absence of the two distillation columns. The reduction of the two distillation column reduced the total investment to

$ 229,176,328. The unmarketable crude IPA resulted

$

on a lower annual revenue flow of  66,006,600. The new total investment and annual revenue resulted to a different simple payback time and ROI.

,,    = $$,,    = 3.48  = $$,, ,, 100%  = .% It can be concluded that the process that has a distillation portion for the crude IPA has a higher total investment but has a slightly lower simple payback time and a higher percent return of investment.

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Solvent and Petrochemical distributor - Solventis.  Methyl Iso Butyl Ketone | MIBK suppliers | Solventis. Retrieved from http://www.solventis.net/ketones/mono-iso-butyl-ketone/

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