Preliminary market analysis and plant capacity - Revision history

Jian: /* References */

2015-03-02T04:23:48Z

References

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	==References==		==References==
	:Biegler LT, Grossmann IE, Westerberg AW. Systematic Methods of Chemical Process Design. Upper Saddle River: Prentice Hall; 1997.

	~~:Peters~~ MS, ~~Timmerhaus~~ ~~KD.~~ ~~Plant~~ ~~Design~~ ~~and~~ ~~Economics~~ ~~for~~ Chemical ~~Engineers.~~ ~~5th ed~~. ~~New~~ ~~York~~: ~~McGraw~~ ~~Hill~~; ~~2003~~.		Biegler LT, Grossmann IE, Westerberg AW. Systematic Methods of Chemical Process Design. Upper Saddle River: Prentice Hall; 1997.

	~~:Seider~~ WD, ~~Seader~~ ~~JD, Lewin DR~~. ~~Process~~ Design ~~Principles:~~ ~~Synthesis,~~ ~~Analysis,~~ ~~and~~ ~~Evaluation~~. ~~3rd~~ ed. New York: ~~Wiley~~; ~~2004~~.		Peters MS, Timmerhaus KD. Plant Design and Economics for Chemical Engineers. 5th ed. New York: McGraw Hill; 2003.

			Seider WD, Seader JD, Lewin DR. Process Design Principles: Synthesis, Analysis, and Evaluation. 3rd ed. New York: Wiley; 2004.
⚫	:Towler G, Sinnott R. Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. 2nd ed. Boston: Elsevier; 2013.

		⚫	Towler G, Sinnott R. Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. 2nd ed. Boston: Elsevier; 2013.

Jian: /* References */

2015-02-24T18:00:05Z

References

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	:Seider WD, Seader JD, Lewin DR. Process Design Principles: Synthesis, Analysis, and Evaluation. 3rd ed. New York: Wiley; 2004.		:Seider WD, Seader JD, Lewin DR. Process Design Principles: Synthesis, Analysis, and Evaluation. 3rd ed. New York: Wiley; 2004.

	:Towler G, Sinnott R. Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. 2nd ed. Boston: ~~Butterworth-Heinemann~~; 2013.		:Towler G, Sinnott R. Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. 2nd ed. Boston: Elsevier; 2013.

Jian: /* References */

2015-02-24T17:01:06Z

References

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	:Seider WD, Seader JD, Lewin DR. Process Design Principles: Synthesis, Analysis, and Evaluation. 3rd ed. New York: Wiley; 2004.		:Seider WD, Seader JD, Lewin DR. Process Design Principles: Synthesis, Analysis, and Evaluation. 3rd ed. New York: Wiley; 2004.

	:Towler GP, Sinnott R. Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. ~~2ed~~ ed. Boston: Butterworth-Heinemann; 2013.		:Towler G, Sinnott R. Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. 2nd ed. Boston: Butterworth-Heinemann; 2013.

Jian: /* Introduction */

2015-02-24T16:56:53Z

Introduction

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	[[File:Design_basis_plant_size.PNG]]		[[File:Design_basis_plant_size.PNG]]

	<i>Figure 1</i>. Early market analysis, shown here by the yellow boxes, will affect many elements of later design work, so it is important to produce a detailed report before taking further design steps (Towler and Sinnott, ~~2012~~).		<i>Figure 1</i>. Early market analysis, shown here by the yellow boxes, will affect many elements of later design work, so it is important to produce a detailed report before taking further design steps (Towler and Sinnott, 2013).

	==Market Analysis==		==Market Analysis==

Jian: /* References */

2015-02-24T16:56:33Z

References

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	:Seider WD, Seader JD, Lewin DR. Process Design Principles: Synthesis, Analysis, and Evaluation. 3rd ed. New York: Wiley; 2004.		:Seider WD, Seader JD, Lewin DR. Process Design Principles: Synthesis, Analysis, and Evaluation. 3rd ed. New York: Wiley; 2004.

	:Towler GP, Sinnott R. Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. ~~Oxford~~: ~~Elsevier~~; ~~2012~~.		:Towler GP, Sinnott R. Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. 2ed ed. Boston: Butterworth-Heinemann; 2013.

Jian: /* References */

2015-02-24T16:51:51Z

References

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	==References==		==References==
		⚫	:Biegler LT, Grossmann IE, Westerberg AW. Systematic Methods of Chemical Process Design. Upper Saddle River: Prentice Hall; 1997.
⚫	# Seider WD, Seader JD, Lewin DR. Process Design Principles: Synthesis, Analysis, and Evaluation. 3rd ed. New York: Wiley; 2004.

⚫	# Biegler LT, Grossmann IE, Westerberg AW. Systematic Methods of Chemical Process Design. Upper Saddle River: Prentice Hall; 1997.
	# Peters MS, Timmerhaus KD. Plant Design and Economics for Chemical Engineers. 5th ed. New York: McGraw Hill; 2003.		:Peters MS, Timmerhaus KD. Plant Design and Economics for Chemical Engineers. 5th ed. New York: McGraw Hill; 2003.

⚫	# Towler GP, Sinnott R. Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. Oxford: Elsevier; 2012.
		⚫	:Seider WD, Seader JD, Lewin DR. Process Design Principles: Synthesis, Analysis, and Evaluation. 3rd ed. New York: Wiley; 2004.

		⚫	:Towler GP, Sinnott R. Chemical Engineering Design: Principles, Practice and Economics of Plant and Process Design. Oxford: Elsevier; 2012.

Jian: /* Examples */

2015-02-24T16:48:47Z

Examples

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	"An opportunity has arisen to satisfy a new demand for vinyl chloride monomer, on the order of 800 million pounds per year, in a petrochemical complex on the Gulf Coast, given that an existing plant owned by the company produces 1 billion pounds per year of this commodity chemical. Because vinyl chloride monomer is an extremely toxic substance, it is recommended that all new facilities be designed carefully to satisfy governmental health and safety regulations."		"An opportunity has arisen to satisfy a new demand for vinyl chloride monomer, on the order of 800 million pounds per year, in a petrochemical complex on the Gulf Coast, given that an existing plant owned by the company produces 1 billion pounds per year of this commodity chemical. Because vinyl chloride monomer is an extremely toxic substance, it is recommended that all new facilities be designed carefully to satisfy governmental health and safety regulations."

	The scale of this process is determined by the primitive design problem to be 100,000 lb/hr, which is approximately 800 million pounds per year assuming 330 operating days per year, giving an operating factor of .904.~~[1]~~		The scale of this process is determined by the primitive design problem to be 100,000 lb/hr, which is approximately 800 million pounds per year assuming 330 operating days per year, giving an operating factor of 0.904 (Seider et al., 2004).

Jian: /* Sizing */

2015-02-24T16:47:54Z

Sizing

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	<math>x*F = Y</math>		<math>x*F = Y</math>

	Where Y will be an initial estimate for the size of your plant. Depending on the confidence in the calculated yield rate, it may be necessary to slightly tweak Y. If there is low confidence in the value of "x", Y should be decreased to match, while if there is high confidence in the value of "x", no changes to Y will be necessary~~[1]~~.		Where Y will be an initial estimate for the size of your plant. Depending on the confidence in the calculated yield rate, it may be necessary to slightly tweak Y. If there is low confidence in the value of "x", Y should be decreased to match, while if there is high confidence in the value of "x", no changes to Y will be necessary (Seider et al., 2004).

	"F" is a variable largely dependent on your market analysis. The depth and scope of your market analysis will allow for a much more precise estimate for "F", which will allow for much more confident decision making when determining the size of your plant.		"F" is a variable largely dependent on your market analysis. The depth and scope of your market analysis will allow for a much more precise estimate for "F", which will allow for much more confident decision making when determining the size of your plant.

Jian: /* Plant Sizing and Decision Making */

2015-02-24T16:47:03Z

Plant Sizing and Decision Making

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	==Plant Sizing and Decision Making==		==Plant Sizing and Decision Making==

	The scale (e.g. flow rates, equipment capacities) of the process is determined based on projected demand for the product ~~[1]~~, which was determined in earlier market analyses. From this basic starting point, it becomes necessary to consider a variety of plant alternatives; it is sometimes advantageous to design beyond the requirement, as the market for chemical products will likely fluctuate over the lifetime of the plant, with both positive and negative swings for the company. These early decisions will dramatically affect the operation of the process for years to come. When considering the various attributes of a process, the overall company goals should be the guiding factor for design teams.		The scale (e.g. flow rates, equipment capacities) of the process is determined based on projected demand for the product (Seider et al., 2004), which was determined in earlier market analyses. From this basic starting point, it becomes necessary to consider a variety of plant alternatives; it is sometimes advantageous to design beyond the requirement, as the market for chemical products will likely fluctuate over the lifetime of the plant, with both positive and negative swings for the company. These early decisions will dramatically affect the operation of the process for years to come. When considering the various attributes of a process, the overall company goals should be the guiding factor for design teams.
	===Sizing===		===Sizing===

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	<math>OD = OF * 365 days/yr</math>		<math>OD = OF * 365 days/yr</math>

	Where MD is market demand, HP is hourly production, OD is the number of days/year plant is in actively producing material, and Operating Factor (OF) is the capacity the plant will run at (usually between .8 and .9). Both calculations are viable ways to estimate plant capacity, and the choice of calculation is dependent on how market analysis research was conducted~~[1]~~.		Where MD is market demand, HP is hourly production, OD is the number of days/year plant is in actively producing material, and Operating Factor (OF) is the capacity the plant will run at (usually between .8 and .9). Both calculations are viable ways to estimate plant capacity, and the choice of calculation is dependent on how market analysis research was conducted (Seider et al., 2004).

	The final sizing concern comes from considering the usage of process byproducts. In the following sections, details concerning side products will be discussed in more detail, but it is always necessary to know what will happen with any byproducts produced by your process, whether they are hazardous or beneficial. Hazardous materials may required additional processing, and those byproducts which may be used for other processes in the company may be shipped to other plants, or could be processed on site if the size is available and additional investment may be beneficial.		The final sizing concern comes from considering the usage of process byproducts. In the following sections, details concerning side products will be discussed in more detail, but it is always necessary to know what will happen with any byproducts produced by your process, whether they are hazardous or beneficial. Hazardous materials may required additional processing, and those byproducts which may be used for other processes in the company may be shipped to other plants, or could be processed on site if the size is available and additional investment may be beneficial.
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	[[File:Byproduct analysis.PNG]]		[[File:Byproduct analysis.PNG]]

	<i>Figure 2</i>. A simple flowsheet which describes the decision making process when determining potential uses of process byproducts. These byproducts may result in an expansion of the plant size, since additional processing may be economically beneficial for the company~~[4]~~.		<i>Figure 2</i>. A simple flowsheet which describes the decision making process when determining potential uses of process byproducts. These byproducts may result in an expansion of the plant size, since additional processing may be economically beneficial for the company (Peters and Timmerhaus, 2003).

	===Technology Alternatives===		===Technology Alternatives===

	Consider whether adding on to an existing plant, building at a new location, or tearing down an old plant and starting fresh will be the best move for the company. Could the new process piggy-back off technology the company is already running? The team must decide whether to use in-house chemistry; a common, well proven process; or a new, unconventional solution ~~[2]~~. Consulting any in-house experts should be the first step for a design team. Engineers, operators, and/or researchers with hands-on knowledge of the process can help to create an understanding of the problem and propose alternatives for improving the process ~~[2]~~. Sources of information on processes less familiar to the company include: patent literature, journal articles, encyclopedias of technology, handbooks, textbooks, external corporate files, and consultants. Businesses can also join organizations that carry out studies of their member companies ~~[2]~~. The company will need to pay royalties for the use of any patented chemistry that was not developed in-house. They must also consider environmental concerns and ensure that each process alternative satisfies the large number of environmental regulations.		Consider whether adding on to an existing plant, building at a new location, or tearing down an old plant and starting fresh will be the best move for the company. Could the new process piggy-back off technology the company is already running? The team must decide whether to use in-house chemistry; a common, well proven process; or a new, unconventional solution (Biegler et al., 1997). Consulting any in-house experts should be the first step for a design team. Engineers, operators, and/or researchers with hands-on knowledge of the process can help to create an understanding of the problem and propose alternatives for improving the process (Biegler et al., 1997). Sources of information on processes less familiar to the company include: patent literature, journal articles, encyclopedias of technology, handbooks, textbooks, external corporate files, and consultants. Businesses can also join organizations that carry out studies of their member companies (Biegler et al., 1997). The company will need to pay royalties for the use of any patented chemistry that was not developed in-house. They must also consider environmental concerns and ensure that each process alternative satisfies the large number of environmental regulations.

	===Safety Considerations===		===Safety Considerations===
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	===Utility Concerns===		===Utility Concerns===

	Rising utility costs will have an enormous impact on the financial viability of a process design. The cost of powering a larger plant can rise exponentially as the size of the plant increases, sometimes without a significant rise in revenues. Optimizing this balance is important when considering the sizing of an operation. Estimates of utility prices, such as electricity, cooling water, and steam, can be found tabulated in reference texts ~~[1]~~. For more accurate estimates local utility companies should be contacted.		Rising utility costs will have an enormous impact on the financial viability of a process design. The cost of powering a larger plant can rise exponentially as the size of the plant increases, sometimes without a significant rise in revenues. Optimizing this balance is important when considering the sizing of an operation. Estimates of utility prices, such as electricity, cooling water, and steam, can be found tabulated in reference texts (Seider et al., 2004). For more accurate estimates local utility companies should be contacted.

	===Next Steps===		===Next Steps===

	Once a process has been chosen, the design team generates and evaluates a conceptual flowsheet. The team considers various alternative designs and strategies to come up with the more detailed process flow diagram. The plant can then be modeled using simulation software. With each new level of detail considered, the team should be mindful of the needed investment and the expected return ~~[2]~~.		Once a process has been chosen, the design team generates and evaluates a conceptual flowsheet. The team considers various alternative designs and strategies to come up with the more detailed process flow diagram. The plant can then be modeled using simulation software. With each new level of detail considered, the team should be mindful of the needed investment and the expected return (Biegler et al., 1997).

	==Examples==		==Examples==

Jian: /* Market Analysis */

2015-02-24T16:44:35Z

Market Analysis

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	The first step when considering the development of a new product or process is to examine the existing market scenario. It is important to take a survey of current market situations in order to understand whether or not your product or process will be an economically successful venture.		The first step when considering the development of a new product or process is to examine the existing market scenario. It is important to take a survey of current market situations in order to understand whether or not your product or process will be an economically successful venture.

	Economic data are difficult to estimate due to inherent volatility in the marketplace ~~[1]~~; most companies use market studies to project future market size and prices. A risk analysis is performed using a range of chemical prices to determine the sensitivity of the project economics to specific prices. A commonly used source of national economic price data is the Chemical Marketing Reporter, which is updated biweekly ~~[1]~~. For more detailed estimates, e.g. for a specific region, the chemical manufacturer should be contacted. The supply and demand for feeds and products must be considered. This will, clearly, impact the price of these items. Consider the forecast for the supply and demand for these streams as well. Are there any niche markets that are underserved? Is there any technology on the horizon that could impact supply/demand levels? Additionally, are there any competitors running the same process? This could impact the company’s profitability, as your process must be unique enough to justify competition with existing organizations.		Economic data are difficult to estimate due to inherent volatility in the marketplace (Seider et al., 2004); most companies use market studies to project future market size and prices. A risk analysis is performed using a range of chemical prices to determine the sensitivity of the project economics to specific prices. A commonly used source of national economic price data is the Chemical Marketing Reporter, which is updated biweekly (Seider et al., 2004). For more detailed estimates, e.g. for a specific region, the chemical manufacturer should be contacted. The supply and demand for feeds and products must be considered. This will, clearly, impact the price of these items. Consider the forecast for the supply and demand for these streams as well. Are there any niche markets that are underserved? Is there any technology on the horizon that could impact supply/demand levels? Additionally, are there any competitors running the same process? This could impact the company’s profitability, as your process must be unique enough to justify competition with existing organizations.

	The scope of a project can also be limited by budget. Engineers must consider the budget they have to work with and various strategies for financing, including issuing more stock, selling bonds, and/or simply borrowing the funds ~~[2]~~.		The scope of a project can also be limited by budget. Engineers must consider the budget they have to work with and various strategies for financing, including issuing more stock, selling bonds, and/or simply borrowing the funds (Biegler et al., 1997).

	==Plant Sizing and Decision Making==		==Plant Sizing and Decision Making==