CHAPTER 1

PROCESS BACKGROUND, MARKET ANALYSIS AND SITE LOCATION

1.0 Process Background and Selection

1.1 Introduction

Design for a chemical manufacturing process used to fulfil a particular need. In

the design of Acetone chemical process, the main need to be concerned are the public
need for the acetone as product and also the commercial opportunity that can be
projected through sales and marketing organization. The objective of this project is to
design an economic Acetone chemical plant with safer ways of processes for a
production rate of 100 000 metric tonnes acetone from isopropanol annually. In
considering possible ways of achieving the objective of this acetone chemical plant, there
are a few constraints arise. Some of the constraints are fixed and invariable constraints
which arise from physical laws, government regulations and standard. Economic
consideration is the main constraint in each chemical plant. Acetone chemical plant must
make a profit in reasonable payback period. Besides, time will also be a constraint to this
acetone chemical plant design. The time available for the completion of the design
eventually limit the number of design alternatives that can be consider to maximize the
production annually.

Acetone with purity of 98% is a vital component in many laboratory and industrial
application as many organic compound dissolves readily in it. In industry, acetone can
be produced via two routes namely through cumene hydroperoxide hydration and
dehydrogenation of isopropanol (IPA). In cumene hydroperoxide hydration method,
acetone is produced as co-product together with phenol. In dehydrogenation of IPA,
acetone is produced as main product with hydrogen gas as the co-product. Therefore,
acetone produced from IPA via dehydrogenation reaction is the alternative road for the
production of acetone as it produced large amount of acetone in order to meet high
demand from industries.

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1.2 Overview of Acetone

Acetone (C3H6O) is a type organic compound that also can be known as 2-

propanone, propanone, dimethyl ketone or methyl ketone. Acetone is the simplest ketone
that exists as a colourless, volatile and flammable organic solvent with distinct taste and
smell. It dissolved in water and also have been conventionally used to dissolve others
substances. Figure 1.1 (a) and (b) showed structural formula and molecular formula of
acetone respectively.

a) b)

Figure 1.1: a) Structural formula of acetone b) Molecular structure of acetone

The carbon atom in the carbonyl group is bonded to two hydrocarbon group in
order to show ketone properties. The physical and chemical properties for acetone are
as view in the Table 1.1. Acetone suit to be used as a solvent because of its physical
properties that have high evaporation rate, low viscosity and able to miscible with water
and others organic solvents. Since it has potential to undergo many types of reaction
such as addition, oxidation or reduction, and condensation reactions, acetone is suitable
to be used as a raw material in the synthesis of many commercial products.

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 Table 1.1: Physical and Chemical Properties of Acetone

Property Information
Molecular weight 58.08
Colour Colourless
Physical state Liquid
Melting point -93.35C
Boiling point 56.2C at 1 atm
Density at:
20C 0.78998 g/mL
25C 0.78440 g/mL
30C 0.78033 g/mL
Odor Mildly pungent and aromatic
Odor treshold:
Water 20 ppm
Air (absolute) 13-20 ppm
100% odor recognition 100-140 ppm
Solubility:
Water at 20C Completely misicible
Organic solvents Soluble in benzene and ethanol
Partition coefficient:
Log Kow -0.24 (recommend value)
Log Koc 0.73 (estimated)
Vapor pressure at 20C 181.72 mmHg
Henrys Law constant (at 20C) 4.26 x 10-5 atm.m3/mol
Autoignition temperature 465C
Flashpoint -20C
Flammibility limits in air at 25C Lower; 2.15%, upper; 13.0%
Conversion factor in air at 25C 1 ppm = 2.374 mg/m3
Explosive limits Lower; 2.6% in air, upper; 12.8% in air

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1.3 Overview of Isopropanol

Isorpopanol (IPA) with chemical formula of (C2H8O) is the simplest secondary

alcohol that also can be known as dimethycarbinol and 2-propanol. IPA is soluble in
water, ether, alcohol, chloroform, benzene and most organic solvents and also it is
miscible with water, ether, alcohol and also can produce azeotrope with water.
Isopropanol is a highly flammable, colourless liquid with strong smell. IPA acts as
feedstock in the production of acetone, manufacture of methyl isobutyl ketone, methyl
isobutyl carbinol, isopropylamine and isopropyl acetate. Figure 1.2 below shows the
chemical and molecular structure of isopropanol.

a) b)

Figure 1.2: a) Structural formula of IPA b) Molecular formula of IPA

The physical and chemical properties of IPA can be view as in Table 1.2. IPA is
majorly employed as a solvent and also as a precursor for manufacturing other
chemicals. It can be produced via a few method likes indirect hydration of propylene
(sulfuric acid process), direct hydration of propylene, and catalytic hydrogenation of
acetone. Direct hydration is less corrosive than indirect hydration as it being mediated by
sulfuric acid. However, the direct method requires a pure propylene feed, in contrast to
the indirect process, which can use a dilute propylene feed.

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 Table 1.2: Physical and Chemical Properties of Isopropanol Alcohol

Property Information
Molecular Weight 60.09 g/mol 60.09 g/mol
Boiling Point @ 760mm Hg 82.2C (180.0F)
Freezing Point -88.5C (-123.7F)
Flash Point Closed Cup 12C (53F)
Autoignition Temperature 425C

Specific Gravity @ 20/20C 0.787

Vapor Pressure @ 20C 4.1 kPA
Evaporation Rate
(n-butyl acetate =1) 1.5
Refractive Index @ 20C 1.376
Viscosity @ 20C 2.4 mPa.s
Lower Explosive Limit 2 v/v%

Upper Explosive Limit 12 v/v%

Conductivity @ 20C 6 S/m
Dielectric Constant @ 20C 18.6
Specific Heat @ 20C 2.6 kJ/kg/C
Heat of Vaporization @ Tboil 664 kJ/kg

Heat of Combustion (net) @ 25C 31 000

Odor Threshold 22 ppm

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1.4 Uses of Acetone and Market Segment

Acetone is vital compound in the production of chemicals and act as a solvent.

Due to its ability to become completely soluble with water make acetone as a good
dehydrating agent while its capability to become miscible with others organic solvents
allow it to be use with the organic solvents therefore increasing their individual efficiency.
Acetone has a low boiling point to enable it to be used during extraction process with low
cost for fuel and less hazardous to decompose the final product. Commonly, acetone is
used as a direct solvent and as a chemical intermediate to methyl methacrylate (MMA),
and bisphenol-A (BPA), and aldol chemicals production. Direct solvent applications also
account for a portion of world demand. Acetone being used as solvent for fats, oils,
waxes, resins, rubber, plastics, lacquers, varnishes and rubber cements. It also acts as
versatile reagent in organic synthesis.

On the basis of application, the global acetone market is segmented into solvent,
MMA, BPA and others application as illustrated in Figure 1.3 below. From the figure, it
can be observed that global acetone market is mainly driven by the use of acetone in
chemical manufacturing and as a solvent. With technical grade of 98% purity, it is
convenient to be used in variety of application in laboratory, cosmetic, medical and etc.
MMA that originated in dental industry accounted for 25% of global market segment in
2013. Due to high demand of methyl methacrylate in LCDs for global electronics industry,
acetone global market is expected to growth significantly by the year of 2020. Rising
application of polycarbonate in the vehicle industry, which is produced with the use of
BPA was also help to boost the growth of acetone market about 24%. Besides that, usage
of BPA in manufacturing of dental fillings sealants, plastics, antioxidants, foundry
castings, lining of water pipes, and PVC also could contribute to the growing of acetone
market demand in future (Future Market Insight, 2015). Based on data reported by Grand
Review Research (2016) India, China, Indonesia, and Malaysia are expected to have the
highest growth rate of acetone market in Asia Pacific region due to the growth of the
automotive segment.

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Figure 1.3: Global market segment of acetone in 2013 (Grand Review Research, 2016)

1.5 Acetone Production Process

Acetone can be produced industrially via several routes which are cumene
hydroperoxide oxidation, dehydrogenation and also through oxidative dehydrogenation
of IPA. In the cumene hydroperoxide oxidation reaction, cumene or isopropylbenzene as
the starting material undergoes liquid phase oxidation by air into cumene hydroperoxide.
The cumene hydroperoxide then is cleaved in the presence of acid catalyst to form
phenol and acetone as a co-product [2].

Another alternative route to produce acetone are through dehydrogenation and

oxidative dehydrogenation of IPA (Abd El-Aziz et al., 2016). IPA being utilized as the raw
material for the production of acetone to eliminate the aromatic impurities presence in
product. In the dehydrogenation reaction, IPA as feed stock will catalytically converted
into acetone while in the oxidative dehydrogenation, IPA is oxidized by air to form
acetone.

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1.5.1 Cumene Hydroperoxide Oxidation Reaction

Production of acetone from cumene hydroperoxide oxidation basically involved

two reaction as shown in Figure 1.4. In the first reaction, isopropylbenzene or cumune
will undergo liquid phase oxidation to form cumene hydroperxide. Then cumene
hydroperoxide is cleaved in the presence of acid catalyst in order to form phenol and
acetone.

Both reactions are exothermic and the operating temperature and pressure is
between 60C - 70C and 3 atm respectively in the presence of sulphuric acid as the
catalyst. Increasing the concentration and temperature of cumene hydroperoxide will
result in the increased by product formation, in which some of it will inhibit the reaction
rate of acetone. Thus, this reaction is preferably to be carried out in a reactor with low
operating temperature and the concentration of cumene hydroperoxide is kept between
20 wt% and 30 wt% to minimize the formation of by product like a-methylstyrene (AMS),
cumyl phenol, and mesityl oxide.

Figure 1.4: Production of acetone from cumene

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 Figure 1.5: Block flow diagram for production of acetone from cumene

1.5.2 Dehydrogenation of Isopropanol Reaction

Beside cumene process, dehydrogenation of IPA as the feedstock is another

alternative that can be practice in industry for the production of acetone. The advantages
of this reaction over cumene process is that this reaction produce acetone as the main
product meanwhile cumene hyroperoxide oxidation reaction produce phenol as main
product and acetone as co-product. About 0.62 tons of acetone is produced per ton of
phenol obtained. The production of acetone from cumene process would require a
balancing market with the phenol that produce from the process.

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 Figure 1.6 illustrated the dehydrogenation reaction in which IPA with constituent
of 85-90 wt% IPA and 15-10% water is directly converted to acetone and hydrogen via
direct catalytic dehydrogenation reaction. Since gibbs free energy of dehydrogenation
reaction ( = 13.9 kJ/mol) is positive, the reaction can only proceed catalytically. Metal,
metal oxide or salt catalysts are the common catalyst that can be used in this reaction.
Dehydrogenation of IPA is an endothermic reaction.

Figure 1.6: Dehydrogenation reaction of isopropanol

Generally, dehydrogenation of IPA contains two procedures which are

endothermic dehydrogenation reaction of IPA in liquid and vapour phase. Comparing
between these two isopropanol dehydrogenation liquid-vapor phase reaction, the
dehydrogenation reaction in liquid phase is more advantageous in term of the operating
temperature. This is because when the reaction conducted in liquid phase, the reaction
can proceed at a lower temperature heat source of about 83.5 C and lower down the
operation cost. The conversion of IPA in vapor phase at low temperature (0.108 at 90C)
is low even though it has high rate of reaction (Xin, Xu, Huai, & Li, 2014). Undesired side
reaction of dehydrogenation can be eliminated by choosing appropriate catalyst and
operating temperature.

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 1.5.2.1 Catalytic Dehydrogenation of Isopropanol in Liquid Phase

One way to produce acetone is through dehydrogenation of liquid phase IPA.

Composition of IPA with water maintained in liquid phase when being feed to the reactor
for the reaction. The reaction temperature usually conducted below 82.5oC, which is
below the boiling point of the isopropanol. If the temperature exceeds the boiling point,
the reactant will turn to vapour phase and no longer proceed in liquid phase. Thus, the
low temperature should be maintained throughout the process. The process mostly used
zinc oxide as catalyst due to high yield percentage around 85% to 90% (Abd El-Aziz et
al., 2016).

1.5.2.2 Catalytic Dehydrogenation of Isopropyl Alcohol in Vapour Phase

Feed of IPA is introduced in liquid phase and will undergoes vapourization

process to convert the feed into vapour phase. The vapour phase reaction is carried out
with the present of nickel catalyst. The process produced endothermic reaction and the
reaction generally conducted at higher temperature than boiling point (250C) and at 1
atm pressure. The maximum conversion and selectivity of IPA to acetone obtained from
the reaction are 95% and 85% respectivly.

Figure 1.7: Block flow diagram for catalytic dehydrogenation of IPA in vapour
phase
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 1.5.2.3 Dehydrogenation of Isopropanol Without Presence of Catalyst

The process of this straight dehydrogenation reaction without presence of catalyst

is endothermic reaction, hence an increase in temperature increase the yield of acetone.
The operating temperature must be higher than 250C to maximize the rate of reaction.
However, according to La Chateliers principles an increase in pressure reduces the
yields of acetone (H. Lee & S.I. Hong,1994). In order to achieve higher yield, the pressure
must be below than 1 atm. The reaction medium use is water. As catalyst used to speed
up rate of reaction, then higher energy is required to break the hydrogen bond in
isopropanol to yield higher acetone without the presence of catalyst. It is not convenient
to apply this technology in industry as it will consume higher cost for energy consumption.

Figure 1.8: Process flow diagram for dehydrogenation of IPA in vapour phase

1.5.3 Oxidative Dehydrogenation

Beside dehydrogenation reaction, IPA can also be converted into acetone via
oxidative dehydrogenation reaction. In this reaction, isopropanol being dehydrogenized
into acetone with the help from oxygen and catalyst. Oxidative dehydrogenation is an
exothermic and requires more critical temperature control. As stated by Herkes, F., E.

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(1998), oxidative dehydrogenation must be conducted at temperature higher than 358C
for higher product yield (more than 77.3%).

Thus, to ensure higher yield, reaction usually performed at temperature of 400C

to 600C and catalyst used either silver or copper (Wittciff, H., A., Reuben., B., G., &
Plotkin., J., S., 2004). They also mention that oxidative dehydrogenation conducted at
low pressure and temperature of 550 C, zinc oxide will be employed as a catalyst to
increase product yield. Chemical equation for the oxidative dehydrogenation reaction of
isopropanol is illustrated in Figure 1.9.

catalyst
CH3CHOHCH3 + 0.5O2 CH3COCH3 + H2O

Figure 1.9: Oxidative dehydrogenation reaction of isopropanol

Figure 1.10: Process flow diagram for oxidative dehydrogenation of IPA

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1.6 Process Selection

Process selection is made by comparing the three processes according to several

factors. Factors that have been considered are operating conditions of temperature and
pressure, reactions, phase of reactions, percentage of yield, type of catalysts, product
produced, reaction medium used during the reaction, and others which refer to safety
condition. Furthermore, type of wastes produced by each processes also influenced the
selection of process as more waste requires more capital cost to be invested in order to
minimize waste. Table 1.3 below lists all the parameters that distinguish each process
available for dehydrogenation of isopropanol process.

Table 1.3: Process Selection for Three Different Process

Name of the Process 1: Process 2: Process 3:

process Catalytic Catalytic Dehydrogenation of
Dehydrogenation Dehydrogenation Isopropanol in Vapour
of Isopropanol in of Isopropanol in Phase Without
Liquid Phase Vapour Phase Catalyst)

Temperature Below 82.5 oC 250 oC 450C

Pressure 10 atm 1 atm Below 1 atm
Reaction Isopropanol is Isopropanol in liquid Isopropanol in vapour
Process directly fed into phase is converted phase being react
reactor in liquid to vapour phase. without the presence of
phase. catalyst
Reaction Liquid phase Vapour Phase Vapour Phase
Phase
Yield 85% - 90% 98% 85% - 90%
Catalyst Zinc Oxide Nickel metal None
Product Acetone (l) with Acetone (l) with Acetone (l) with
Produced hydrogen (g) hydrogen (g) hydrogen (g)

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 Reaction Water Water Water
medium
General cost Cost can be Additional cost Additional cost needed
minimized without needed for for vapourizer to change
using vapourizer vapourizer to the liquid phase of feed
change the liquid IPA
phase of feed IPA

Others Minimum Can withstand with High reaction

temperature high temperature to temperature required
required during prolong catalysts during reaction.
the reaction. life.

1.6.1 Process of Selection

Selection of the best process to be applied in the acetone production is important

for economical and high yield of acetone being produced. In order to select the suitable
process for the production of acetone, comparison between each of the process has
been made and each of the characteristic has been rated between 5 until 1 with the score
as described in Table 1.4 with the evaluation from excellent to very poor.

Table 1.4: Process Selection Score

Score Indication

5 Excellent
4 Very Good
3 Good
2 Satisfied
1 Poor
0 Very Poor

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Table 1.5 below shows the comparisons between each process available for
dehydrogenation process with the score for each characteristic that has been evaluated.

Table 1.5: Scoring Table for Each Characteristic for Dehydrogenation Process

Name of the Process 1: Process 2: Process 3:

Process Catalytic Catalytic Dehydrogenation
Dehydrogenati- Dehydrogenati- of Isopropanol
on of on of (Vapour Phase
Isopropanol Isopropanol Without Catalyst)
Parameters (Liquid Phase) (Vapour Phase)
1. Temperature 5 4 3
2. Pressure 2 4 4
3. Reaction 5 4 4
4. Reaction 3 5 5
phase
5. Yield 3 5 3
6. Catalyst 4 5 3
7. By-Product 4 4 4
8. Reaction 3 4 4
medium
9. General cost 4 3 3
10. Others 4 4 4
TOTAL 37 42 37

From the selection analysis, the Process 2 which is catalytic dehydrogenation of

isopropanol that react in vapour phase gave the higher score compared to the other two
processes. This process has a few points that made this process give off to be the best.
In dehydrogenation reaction of IPA in vapour phase, the operating temperature is 250C.
It is the optimum temperature that will favor equilibrium conversion for endothermic

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reaction and slightly improved the selectivity up to 85%. Besides that, at 250C, the
reaction rates will be higher comparing with the reaction rate when conducting the
reaction at liquid phase (temperature below 85C). However, for dehydrogenation
reaction of IPA in vapour phase but without the presence of catalyst, the operating
temperature is 450C. This condition is not preferable as it requires special materials for
construction of reactor and thus increased the construction cost. In some instances,
conducting the reaction at high temperature, which is exceeding the boiling point may
resulting high kinetics rate and reduces catalyst degradation by facilitating the removal
of the reaction products, acetone and hydrogen, from the catalyst via desorption and from
the IPA via vaporization. Thus, high temperature as 250oC is needed to obtain an
optimum reaction.

In term of operating pressure, dehydrogenation reaction of IPA in vapour offer

some advantages comparing to the dehydrogenation reaction of IPA in vapour without
the presence of catalyst. Operating pressure for dehydrogenation in vapour is 1 atm
which is the optimum operating pressure for mostly of chemical processing plant. This
pressure is optimum enough to maintain its gas phase while favor the equilibrium
conversion. Operating pressure for dehydrogenation reaction in vapour phase without
presence of catalyst is below than 1 atm. This condition is not favourable as it requires
large equipment in order to achieve equilibrium conversion. Meanwhile in
dehydrogenation reaction in liquid phase, the operating pressure is 10 atm in order to
maintain its liquid phase. To conduct reaction at this pressure, thicker walled reactor is
required and it is not convenient as it will increase the construction cost.

Phase has effect on the mobility of molecules and reaction rate. Molecules in the
gas phase are quite free to move around as they are separated by distance that are large
compared with the size of molecules. Thus, they are pretty well spread out.
Nevertheless, collisions in the gas phase happen rapidly, which might help gas phase
reactions happen more readily and increasing the rate of reaction. Maximum yield (98%)
of IPA to acetone obtained from catalytic dehydrogenation of IPA in vapor phase proves
that the catalyst has good stability towards the production of acetone comparing with
liquid phase dehydrogenation of IPA, the maximum percentage of yield that can be
achieve is only between 85% to 90%.

Catalyst used in dehydrogenation of IPA in vapour phase is nickel granules. The

nickel catalyst is used in a large number of industrial because of its stability and high

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catalytic activity at operating temperature. Moreover, it has ability to absorb huge
quantities of hydrogen, which therefore increases how efficient reactions are. Since the
hydrogenation process requires hydrogen elimination, this catalyst is suitable to be used.
In addition, nickel is less costly relative to competing materials of the platinum group.
This catalyst is cheap and efficient for industries to use (Fang X., et al., 2014).

However, for the general cost the basic idea of liquid phase operation is the
complete conversion of isopropanol to acetone in reactor in order to overcome the high
recovery cost problem in the vapor phase operations, in which the product contains
unreacted isopropanol vapor (H. Lee & S.I. Hong., 2000). Apart from that, the complete
conversion of isopropanol to the desired product can diminish recovery cost which
enhances the financial matters. It can be concluded that liquid phase reaction generally
requires less cost compared to vapour phase, but has low reaction rate due to its low
temperature. Moreover, the general cost for dehydrogenation of isopropanol without
using catalyst may reduce a great deal which improve the economic, but the rate of the
reaction might be the slowest between the other two processes. Therefore, the use of a
catalyst is very important to speed up the reaction.

In conclusion, the process is chose based on high operating temperature and low
operating pressure which can offer high reaction rate and maximum yield of acetone. The
usage of nickel metal catalyst in the reaction is also important to give efficient reaction
throughout the process.

1.7 Input/output Structure and Generic Block Flow Process Diagram

CH3CHOHCH3
H2

H2O CH3CHOCH3 CH3COCH3 + H2 CH3COCH33

CH3CHOHCH3

Input/output Structure

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 Block diagram for acetone production is shown in Figure 1.9 gives a clear
overview of the production of acetone and the process illustrated is as described. IPA
with composition of 85 wt% - 90 wt% IPA and 15 wt% - 10 wt% water converted in reactor
to form acetone and hydrogen gas. Hydrogen gas then is separated and discharged
through flash. The acetone product, unreacted IPA and water are then separated by
distillation and acetone is removed in the product stream. IPA is then recycled back to
the reactor and excess water removed in the waste water stream.

Flash

Figure 1.11: Generic Block Flow Process Diagram for Production of Acetone via
Dehydrogenation Reaction

1.7.1 Reactor Feed Preparation Block

It consists of mixer to mix feed and recycled isopropanol solution, and heater to change
the phase of the liquid isopropanol to vapour as the dehydrogenation reaction will be
conducted at vapour phase.

1.7.2 Reactor Block

It consists of Packed Bed reactor (PBR) and nickel granules as catalyst that placed inside
the tower. The reaction take place at temperature of 350oC and 1 atm pressure.

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1.7.3 Separator Feed Preparation Block

It consists of cooler which convert the temperature of reactors outlet from 350oC to 50oC
and turned the vapour acetone to liquid acetone.

1.7.4 Separator Block

It consists of flash separator that separate hydrogen gas from liquid mixture of acetone,
isopropanol and acetone, absorber to separate hydrogen from acetone, distillation
column 1 to separate acetone gas from liquid mixture of isopropanol and water, and
distillation column 2 and 3 to separate azeotropic mixture of isopropanol and water by
introducing dimethyl sulfoxide (DMSO) as a solvent.

1.7.5 Recycle Block

It consists of isopropanol stream which recycled isopropanol is feed back into the mixer,
and water stream which recycle water into absorber.

1.7.6 Environmental Control Block

It consists of absorber which impurities of hydrogen gas is being removed before keep in
a storage tank for further process.

1.7.7 The Recycle Structure of the Process

Effluent from distillation column 1 is recycled back to feed drum and mix together with
isopropanol feed.

1.7.8 General Structure of the Separation Process

The separation involved in the three-distillation column, which are named as distillation
column 1 that separate acetone from liquid mixture of isopropanol and water, while
another distillation column is to separate pure isopropanol from process water.

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1.7.9 Heat-Exchanger Network

Heat exchanger, which is combination of heater and cooler, is to increase the

temperature of outlet mixture of flash separator from from 20OC to 190OC, and to reduce
the temperature of reactor outlet mixture from 465OC to 78OC.

1.8 Process Flow Diagram (PFD) and Plant Item List

The raw material is IPA (90%) with small ratio of water (10%) as a solvent, are
fed into the mixer (M-101) at 25oC and 1 atm. The feed then enters the heater (E-101) to
heat up the temperature until 300oC and change the phase of IPA from liquid to vapour.
The reaction occurs in reactor to convert IPA into acetone and hydrogen gas with the
presence of catalyst. The mixture enters the flash separator (T-101) to separate
hydrogen gas from the liquid mixture of acetone, unreacted IPA, water and small amount
of DMSO. The liquid mixture then enters the distillation column 1 (T-102) to separate
acetone from unreacted IPA and water by volatility and remove as product. The mixture
of hydrogen and acetone enter the absorber (T-102) in order to get high purity of
hydrogen while acetone enter into distillation column 2 (T-103). Same goes to distillation
column 2 (T-103) and 3 (T-104) which to separate azeotropic mixture of IPA and water.
Separated IPA is then recycled to the mixer (M-101) and water is flowing out and being
recycle back into absorber (T-102). Process flow diagram (PFD) for acetone production
from isopropanol in vapour phase as being shown on the Figure 1.10.

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1-22
1.8.1 Stream Information

The main stream that have been installed in the PFD are recycle stream and
product stream, which the recycled isopropanol and process water are produced, while
product stream is produced hydrogen gas and acetone as the main product. Table 1.6
showed the description for recycle stream and Table 1.7 showed the description for the
product stream.

Table 1.6: Recycle Streams

Stream Process Description

RE-IPA,17 and Pure isopropanol from distillation column 2 (T-104) is pump back
18 to the mixer (M-101).
RE-H2O and 14 Water from distillation column 3 (T-105) is pump back to absorber
(T-102).
19 and 20 DMSO from distillation column 3 (T-105) is pump back to
distillation column 2 (T-104).

Table 1.7: Product Streams

Stream Process Description

ACETONE Treated hydrogen gas from flash separator (T-101) enter

absorber
(T-102) in order to get great purity of hydrogen.
H2 Acetone product from distillation column 1 (T-104) is produced.

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 1.8.2 Equipment

The equipment involved in the process are mixer, heat exchanger, heater, two
cooler, reactor which is packed bed reactor (PBR), flash separator, absorber and three
distillation columns. Table 1.8 briefly described each equipment being used in the
acetone production process. In addition, PBR is selected since it is most often used in
catalytic gas reactions. The selection of PBR are based on the follow criteria:

1) PBR has higher conversion per weight of catalyst than another catalytic reactor.

2) The reaction rate is based on the solid catalyst amount rather than the volume of the
reactor.

3) Low operating cost and low maintenance by using this kind of reactor.

4) The process using packed bed reactor operates continuously.

5) Little wear on catalyst and equipment.

6) Only practical, economic reactor at very high pressures.

7) Usually high ratio of catalyst to reactants long residence time complete reaction.

Table 1.8: Equipment Involved in the Process

Equipment Description

Mixer 1 (M-101) To mix IPA feed with the IPA recycle before enter reactor (R-101)

Mixer 2 (M-102) To mix recycled H2O with H2O feed before enter absorber (T-
102)
Heater 1 To increase the temperature of IPA from 25OC to 300OC and
(E-101) change liquid to vapour phase before it enters reactor (R-101)

Cooler 1 (E-103) To reduce the temperature of H2O-DMSO mixture to 81OC before

the mixture enter distillation column 3 (T-105)

Cooler 2 (E-104) To reduce the temperature of recycled IPA to 50OC and change
vapour to liquid phase before it enters the mixer (M-101)

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Heat exchanger To reduce the temperature of reactor outlet mixture from 465OC
(E-103) to 78OC before it enters the flash separator (T-101).
To increase the temperature of flash separator outlet mixture from
20OC to 190OC before it enters distillation column (T-103)
Pump 1 (P-101) To pressurize the flow from IPAFEED stream into the mixer (M-
101)
Pump 2 (P-102) To pressurize the flow from stream 2 into the heater (E-101)

Pump 3 (P-103) To pressurize the flow from FCOUT stream into distillation column
(T-103)
Pump 4 (P-104) To pressurize the flow from stream 9 into extractive distillation (T-
104)
Pump 5 (P-105) To pressurize the flow from stream 11 into cooler 1 (E-103)

Pump 6 (P-106) To pressurize the flow from stream 19 into distillation column 2
(E-104)
Pump 7 (P-107) To pressurize the flow from stream RE-H2O into mixer 2 (M-102)

Pump 8 (P-108) To pressurize the flow from stream WATER into mixer 2 (M-102)

Pump 9 (P-109) To pressurize the flow from stream 17 into mixer 1 (M-101)

Compressor To increase the pressure of reactor (R-101) outlet mixture from 1

(C-101) atm to 3 atm before the mixture enter heat exchanger (E-102)
Flash separator To separate 99.9% (split fraction) of hydrogen from mixture of
(T-101) IPA, acetone, water and DMSO

Absorber To separate 99.9% (split fraction) of hydrogen from remaining

(T-102) mixture of IPA,acetone, water and DMSO in order to get 96%
purity of hydrogen.
Reactor (R-101) IPA reacts with nickel catalyst inside the reactor at 350OC and 1
atm to produce water, hydrogen and acetone

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Distillation To separate acetone from the mixture of IPA and water
column (T-103)
Extractive To separate azeotrope mixture of IPA and water by introducing
distillation 1 dimethyl sulfoxide (DMSO) as an entrainer, while IPA flow out as
(T-104) top product and recycle back to mixer 1 (M-101)
Extractive To separate the mixture of DMSO and water, as DMSO recycle
distillation 2 back to distillation column 2 (T-104) while water flow out as top
(T-105) product

1-26
1.9 Process Details

Process details comprised of chemistry, kinetics and thermodynamic which are

important details for better understanding on the relationship and laws that governs
chemical reactions. The laws of thermodynamics will help to predict whether a reaction
will take place or not while chemical kinetics will provide answer for question about the
speed of reaction.

1.9.1 Chemistry

Dehydrogenation reaction of isopropanol with presence of nickel catalyst

produced acetone and hydrogen gas as the primary reaction. The reaction was shown in
Equation 1.1 below

Nickel

CH3CHOHCH3 (l) CH3COCH3 (l) + H2 (g) (1.1)

Isopopanol Acetone + Hydrogen gas

The mechanism in this reaction is

Ni2+ + CH3-CH-OH-CH3 CH3-C-CH3-OH + H+ + Ni + (1.2)

CH3-C-CH3-OH + Ni2+ CH3-CH3-C=O + H+ + Ni + (1.3)

Entalphy of dehydrogenation at standard operating pressure and temperature

() is taken as the basis. Standard heat of reaction of acetone from IPA is 71.4 kJ/mol,
thus the process is endorthermic. In their patent, Heyse, J. V., Johnson, G. P., and
Mulaskey, B., F. (1998) had mention that since dehydrogenation is an endothermic
reaction, the conversion levels are limited by chemical equilibrium, it is desirable to
operate the reaction at high temperatures and low pressure. High temperatures and low
pressures will shift the equilibrium favorably toward dehydrogenated products.

1-27
 Endothermic: heat is absorbed by
system from surrounding

Figure 1.12: Endothermic Mechanism of Dehydrogenation Process

The process comprises flowing the vaporize IPA onto the surface nickel granule
in the packed bed reactor. Reaction be conducted at high temperature higher than boiling
point of IPA to give high kinetic rate and to reduce catalyst degradation by initiating the
products (removal from the catalyst via desorption and from IPA via vaporization. By
operating the reaction at temperature below IPA boiling point will reduce the reaction
kinetics and reduced catalyst life due to the poisoning of the catalyst via desorption
process. Dehydrogenation reaction of isopropanol to produce acetone and hydydrogen
gas at temperature of 250C and at 1 atm to achieve 98% yield and 90% conversion of
IPA.

Catalyst is required in the reaction to boost the rate of reaction but on the same
time remains the process unchanged. Nickel catalyst employed in this reaction changes
the reaction rate by promoting different mechanism for the reaction.

1-28
Energy without catalyst

catalyst E

acetone

acetone + hydogen gas

Reaction Coordinate

Figure 1.13: Different reaction path with and without present of catalyst

Reaction coordinate shown in Figure 1.13 is a measure of the progress as IPA

collides and decomposed over the activation energy to form acetone and hydrogen gas.
Yellow line presented in the figure above showed that catalyst presence in the reaction
reduced enegy required to initiates a chemical reaction.

Hence, catalysts can assist reactions that would not run without the presence of
a catalyst, or perform them much faster at lower temperature and at high rate of reaction.
Presence of catalyst in dehydrogenation reaction able to reduce the amount of energy
required to break hydrogen bond in isopropanol to produce acetone.

Type of Ni used in this reaction is G-56 with the physical properties as figured in
Table 1.9. The following properties of catalyst are relatively applied for reaction with 2.5
hours residence time at 250 C and 1 atm (Couperet al., 2005). The key characteristic
of nickel that enables it to pose as excellent catalyst candidates in the reaction is its ability
to absorb huge quantities of hydrogen thereby increasing the efficiency of the reaction.
This nickel catalyst is more active compared to other catalyst.

1-29
 Table 1.9: Physical Properties of Commercial Nickel Catalyst (Chang et al., 2000)

Nickel content (%) 92

Surface area 90
Porosity 0.5
Apparent density (g/cm3) 3.76
Average particles diameter () 10

As described by Fogler., H. S. (2014), the heterogeneous catalytic reaction between IPA

and nickel metal can be summarized into the sequence of steps shown in Figure 1.13
below:

Mass tansfer diffusion of IPA from bulk fluid into external

surface of nickel granules

IPA diffused from pore mouth through the nickel pore to the
immediate vicinity of internal catalytic surface

IPA being adsorp onto nickel surface

Reaction between IPA and nickel occur on the nickel surface

to produce acetone and hydrogen gas

Acetone and hydrogen gas being desorp from nickel surface

Acetone and hydrogen gas then diffuse from interior pellet to

the pore mouth at the external surface

Acetone and hydrogen gas being transfer from external pellet

surface to bulk fluid

Figure 1.14: Step in catalytic reaction between isopropanol and nickel metal catalyst
(Fogler., H. S., 2014)

1-30
1.9.2 Kinetics Study

a) Rate Law and Mechanism

As the reaction involved heterogenous catalyzed reaction, the rate law may be
write in terms of partial pressure. Mechanism of acetone formation on Nickel catalyst can
be described by Langmuir-Hinshelwood kinetics mechanism as shown below;

kA
IPA + S IPA.S : Adsorption of IPA on surface of catalyst
k-A
ks
IPA.S A.S + H2 : Surface reaction to form adsorbed A and H2
k-s in gas phase

kD
A.S A+S : Desorption of acetone from surface of
k-D catalyst

Where

IPA=isopropanol, A=acetone, H2= hydrogen

i) The rate of adsorption (rAD):

rAD = kAPIPACv k-ACIPA.

where KIPA = kA/K-A, thus

rAD = kA (PIPACV CIPA.S / KIPA) (1.4)

1-31
 ii) The rate of surface reaction

rs = ksCIPA k-sCA.SPH2

where Ks = ks/ k-s, thus

rs = ks( CIPA.S CA.sPH2/Ks) (1.5)

iii) The rate of desorption

rD = kDCA.s k-DPACV

where KDA = kD/k-D, thus

rD = kD (CA.s PACv/KDA) (1.6)

Since that desorption is just the reverse of the adsorption of acetone, thus it is
easily can be shown that acetone adsorption equilibrium constat KA is just reciprocal of
the acetone desorption constant KDA ;

KA = 1/ KDA

rD = kD (CA.s PACv/KDA)

rD = kD (CA.s KA PACv) (1.7)

Assume that the adsorption of IPA is rate limiting, the rate law for catalytic
decomposition of IPA could be defined;

-rIPA = rAD

1-32
 For adsorption-limited reaction, kA is small and kS and kD are large. Consequently,
the ratio rs/ks and rD/kD are very small, whereas ratio rAD/kA is relatively large. Surface
reaction law is;

rs = ks( CIPA.S CA.sPH2/Ks)

r s/ k s 0

CIPA.S = CA.sPH2/Ks (1.8)

To express CIPA.S in term of partial pressure of species present, evaluation on CA.S

being performed. The rate of desorption of acetone is;

rD = kD (CA.s KA PACv)

rD/kD 0

CA.s = KA PACv (1.9)

Substituting equation 1.9 into equation 1.8,

CIPA.S = KA PACv PH2/Ks (1.10)

Substituting equation 1.10 into equation 1.4, yielding new rD,

rAD = kA [PIPACV (KA PACv PH2/Ks )/ KIPA]

rAD = kA CV [PIPA (KA PAPH2/Ks KIPA)]

Ks KIPA / KA = Kp

rAD = kA CV [PIPA (PAPH2/Kp)] (1.11)

1-33
 The concentration of vacant site, CV can be eliminated from equation 1.11 by
utilizing the site balance to give total concentration of sites, Ct which is assumed constant:

Total sites = vacant sites + occupied sites

Ct = Cv + (CIPA.S + CA.S)

Ct = Cv + KA PACv PH2/Ks + KA PACv

Ct = Cv (1 + KA PA PH2/Ks + KA PA)

Cv = [Ct / (1 + KA PA PH2/Ks + KA PA)] (1.12)

Combining equation 1.11 and equation 1.12, rate law for the decomposition of
IPA by assuming the adsorption of IPA as rate limiting step can be defined as follow;

-rA = rAD = kA [Ct / (1 + KA PA PH2/Ks + KA PA)][PIPA (PAPH2/Kp)] (1.13)

In which rA is the rate of acetone formation (mol.m-3.s-1), k is the reaction rate constant
(mol.m-3.s-1) for foward reaction, Ki is the adsorption coefficient (bar-1) and Pi is the partial
pressure (bar), respective component i (A= acetone, IPA=isopropanol, H2 = hydrogen).

Temperature plays vital role in the reaction. The dependence of the rate constant
of reaction on temperature can be expressed in Arrhenius equation from the following
equation:

ln ki = ln A exp - Ea / RT
(1.14)

where, A = pre exponential factor or frequency factor

Ea = Activation energy, J/mol

R = gas constant (8.314 J/mol)

1-34
 T = temperature (K/C)

The quantity of A repesent the frequency of collision. Equation 1.14 shows that
rate constant is diectly proportional to A or to the collision theory. Experiment conducted
by Lokras, S., P., D., & Kuloor, N. (1970) proved that activation energy for
dehydrogenation of IPA over nickel catalyst is 33.6 Kcal/mol. As the negative sign
associated with the exponent Ea/RT, the rate constant will decrease with increasing
activation energy and will increases with increasing temperature

b) Stoichiometry

A gas phase reaction of IPA to form acetone and hydrogen gas being conducted in
variable volume continuous flow reactor (tubular packed bed reactor). Referring to
equation 1.1, isopropanol (IPA) is taking as the basis in determining the stoichiometry
table.

Species Feed rate to reactor Change within Effluent rate from reactor (kmol/hr)
(kmol/hr) reactor (kmol/hr)
IPA (A) FA0 -FA0X FA = FA0 FA0X = FA0 (1 X)
Acetone (B) FB0 = B FA0 +FA0X FB = B FA0 +FA0X = FA0 (B + X)
H2 (C) FC0 = c FA0 +FA0X FC = c FA0 + FA0X = FA0 (C + X)

Where,

B = FB0 / FA0 = yB0 / yAo = CB0 / CA0

and C is defined similarly.

1-35
As this chemical plant aim to produced 100 000 tonnes of acetone annually with
conversion of 95% (X= 0.95), thus isopropanol feed rate could be determined.

i) Acetone effluent rate from reactor

100 000 tonnes 1 year1 day1000 kg

FB =
year 338 days 24 hours 1 tonne

FB = 12 327. 416 kg/hour

FB = 212.249 kmol/hour

ii) Isopropanol feed rate to reactor

FB = FA0 (B + X)

FA0 = FB / (B + X)

Since there is no feed rate of acetone to reactor (FB0 = 0), thus

B = FB0 / FA0 = 0

FA0 = 212.249 / (X)

FA0 = 212.248 / (0.95)

FA0 = 223.42 kmol/hr

Species Feed rate to Change within Effluent rate from reactor

reactor (kmol/hr) reactor (kmol/hr) (kmol/hr)
IPA (A) FA0 = 223.42 -212.25 FA = 11.17
Acetone (B) FB0 = 0 +212.25 FB =212.25
H2 (C) FC0 = 0 +212.25 FC = 212.25

1-36
For a flow system, the concentration (CA) at a given point can be determined from the
molar flow rate (FA) and the volumetric flow rate at that point. Equation in determining the
concentration of species involve in the production of acetone and hydrogen gas from
isopropanol are as shown;

FA FA0 (1) F (1) T P

CA =
=
= A0(1+ ) ( 0) ( )
0 0

FB FA0 (B + ) FA0 (B+) T0 P

CB =
=
= ( ) ( )
0 (1+ ) 0

FC FA0 (C + ) FA0 (C+) T0 P

CC = = = ( )( )
0 (1+ ) 0

Where

change in total number of moles for complete conversion

= total moles fed

N
= ( +
1) ( A0) = yA0
T0

= 1+1-1 = 1

= yA0 = 1

FA FA0 (1) F (1) T P 223.42 (0.05) T0 P 5.729 T0 P

CA =
=
= A0(1+ ) ( 0) ( ) = 0 (1.95)
( ) ( ) = 0
( ) ( )
0 0 0 0

FB FA0 (B + ) FA0 (B+) T0 P 223.42(0.95) T0 P 108.846 T0 P

CB = = = ( )( ) = ( )( ) = ( )( )
0 (1+ ) 0 0 (1.95) 0 0 0

FC FA0 (C + ) FA0 (C+) T0 P 223.42(0.95) T0 P 108.846 T0 P

CC =
=
= ( ) ( )
0 (1+ )
= 0 (1.95)
( ) ( ) = 0
( ) ( )
0 0 0

1-37
1.9.3 Thermodynamics

Thermodynamics is important in predicting whether or not a reaction will occur

when reactants are brought together under a specific set of conditions like temperature
and pressure. A reaction that does occur under the given set of conditions is called a
spontaneous reaction and for a reaction that does not occur under the specified
condition, it is said to be non-spontaneous. Gibbs free energy (G) or free energy is one
of the thermodynamic function used to express the spontaneity of a reaction:

G = H TS (kJ/mol ) (1.15)

The quantity in Equation 1.15 refer to the system where T is the temperature of a
system, H is the entalphy and S is the entropy in the unit of energy. Entropy is a
measurement on how spread out or dispersed the energy of a system is among the
differents possible ways that system can contain energy while entalphy is a
themodynamics quantity used to describe heat change taking placed.

From the unit, free energy can also be described as the energy that available to
do work. The change of free energy () of a system for constant temperature process
is

= (kJ/mol) (1.16)

Based on the value of , the conditions for spontaneity and equilibrium at

constant temperature and pressure can be summarized as follows (Chang. R., 2007) :

< 0 , the reaction is spontaneouns in the foward reaction

> 0 , the reaction is non spontaneous. The reaction is spontaneous in the opposite
direction.
= 0 , the system is a equilibrium. There is no net change

1-38
 Gibbs free energy and chemical reactions dependent on the reaction
temperature. Isopropanol is a vital component in the chemical and solvent manufacturing.
It is being produced through dehydrogenation process of isopropanol at high temperature
(as in equation 1.1). Temperature at which the reaction begin to favor product is an
important parameter to be identified. Reliable estimation of the temperature can be make
by first calculating Hf and which representing entalphy and entrophy of system at
standard operating condition (25C and 1 atm), using the data stated in the Table 1.10.

Table 1.10: Thermodynamic Properties for Acetone, Hydrogen Gas and Isopropanol
at 1 atm and 25C (Chang. R., 2007)

Substances Hf (kJ/mol) (J/K.mol)

Acetone (l) -246.8 198.7
Hydrogen (g) 0 131.0
Isopropanol (l) -318.2 190.8

Hrxn = m Hf (products) - n Hf (reactants)

(1.17)

Where m and n represent stoichiometry of the reactants and products in the reaction.

Hrxn = [ Hf (A) +Hf (H2) ] - [ Hf (IPA) ]

= ( -246.8 + 0 ) (-318.2) kJ/mol

= 71.4 kJ/mol

1-39
Srxn = m S (products) - n S (reactants)
(1.18)

Where m and n represent stoichiometry of the reactants and products in the reaction.

Srxn = [S (A) + S (H2)] [S (IPA)]

= (198.7 + 131.0) (190.8) J/mol.K

= 138.9 J/mol.K

From equation 1.17, standard gibbs free energy is describe as;

= (kJ/mol)

= 71.4 kJ/mol [(298 K)(138.9J/mol.K)(1kJ/1000J)]

= 30 kJ/mol

Because obtained is positive value, the reaction is not favored for products
formation at 25C and 1 atm. Temperature at which is zero must be calculated to
predict minimum temperature required so that reaction will proceed spontaneously in
forward reaction ( = negative value).

0 =

T=

71.4 .1000 ..
= .1 .138.9

= 514 K (241C)

1-40
 At temperature higher than 241C, becomes negative, indicating the
reactions now favor the formation of acetone and hydrogen gas. Dehydrogenation of
isopropanol reaction will proceed spontaneously at temperature higher than 241C to
produce desired product (acetone and hydrogen gas). Based on the calculation above,
it had proved that large amount of heat must be supply to the reactant system to avoid
equilibrium limitation on the conversion possible per pass.

Since the value of for dehydrogenation of isopropanol at temperature 25C

already known, thus equilibrium constant (K) for the process at any temperature can be
calculated by using the relationship between and K (Lower, S., 2007).

= -RT ln Kp (1.19)

ln Kp = -
(1.20)

From equation 1.10, Kp at temperature = 25C (298K);

30103

ln Kp = - 8.314
298
.

Kp = 5.5117 10-6

Comparing Kp at two different temperature;

T1 = 298 K

T2 (operating temperature) = 523 K

R = 8.314 J/mol.K

= 71.4 kJ/mol

1-41
(1) 1 1
(2)
= exp[
(1 2)] (1.21)

103
5.5117 106 71.4
= exp[ ( 1 1 )]
(2) 298 523
8.314
.

5.5117 106
= 4.1252 106
(2)

Kp(T2) = 1.3361

On equation 1.21, it showed the Kp value of dehydrogenation reaction of

isopropanol when conducted at temperature of 250 (523 K) equal to 1.3361. From the
value of Kp, certain judgement about the extent of chemic al reaction can be made. Since
Kp value for the dehydrogenation of isopropanol larger than 1, thus the mixture contains
mostly products.

1-42
1.10 Market Analysis and Economic

1.10.1 Introduction

Market analysis is the most important step that should be taken as when to start-
up an organization or introducing a new product. Basically, the market analysis will
provide important information about the market or industry such as supply and demands
trends, potential growth and the potential buyer.

On the design of the plant, it is necessary to conduct an evaluation or assessment

of investment with a view to determine whether the factory designed profitable or not. In
order to predict the demand of acetone, the availability of raw materials must also be
known. From there, profit margin can be calculated to predict the profitability. Besides,
there are a few more factor that must be considered such as the supply and demand of
acetone for worldwide market and also market on the industrial uses of acetone. In
addition, surveying the world price and market for raw materials are also included in this
section.

1.11 The Uses of Acetone

Acetone is a clear, colorless, volatile liquid with a sweet odor. Its main chemical
use as an intermediate in the manufacture of acetone cyanohydrin for methyl
methacrylate (MMA), bisphenol A and aldol chemicals. Direct solvent applications also
account for a large portion of world demand.

Direct solvent applications and MMA accounted for 35% and 25% of global
acetone consumption, respectively, in 2013, followed by bisphenol A at 24%. The next
largest end-use market for acetone is aldol chemicals (including methyl isobutyl ketone
[MIBK], methyl isobutyl carbinol [MIBC] and isophorone). Consumption of acetone for
MIBK accounted for 9% of total acetone demand in 2013. The market distribution is
expected to remain nearly unchanged through 2018 since the solvent segment will lose
market share (about 1%), which will be balanced by increased acetone consumption for
bisphenol A.

1-43
 Industrial Application of Acetone

16% 25%

24%
35%

MMA Direct Solvent Bisphenol Aldo Chemical

Figure 1.15: Industrial Application of Acetone

In addition about a third of the world's acetone is used as a solvent, and a quarter
is consumed as acetone cyanohydrin, a precursor to methyl methacrylate. Table 1.11
below shows the other uses of acetone and their description.

Table 1.11: The Uses of Acetone in Different Industry

Industry Description

Solvent Acetone is a good solvent for many plastics and some synthetic
fibers. It is used for thinning polyester resin, cleaning tools used with
it, and dissolving two-part epoxies and superglue before they harden.
It is used as one of the volatile components of some paints
and varnishes. As a heavy-duty degreaser, it is useful in the
preparation of metal prior to painting.

1-44
 Chemical One of the major use of acetone (about 20%) is synthesizing
Intermediate bisphenol A. Bisphenol A is a component of many polymers such as
polycarbonates, polyurethanes, and epoxy resins.

Laboratory In the laboratory, acetone is used as a polar, aprotic solvent in a

variety of organic reactions, such as SN2 reactions. Despite its
common use as a supposed drying agent, it is not effective except by
bulk displacement and dilution. Acetone is fluorescent under
ultraviolet light, and its vapor can be used as a fluorescent tracer in
fluid flow experiments.

Acetone is used in a variety of general medical and cosmetic

Medical and
applications and is also listed as a component in food additives and
Cosmetic
food packaging. Dermatologists use acetone with alcohol for acne
treatments to peel dry skin.

Domestic Acetone is often used for vapor polishing of printing artifacts on 3D-
printed models printed with ABS plastic. The technique, called
acetone vapor bath smoothing, involves placing the printed part in a
sealed chamber containing a small amount of acetone, and heating
to around 80 degrees Celsius for 10 minutes.

1.12 Market Survey on Acetone

Market study on acetone is the process of collecting data to determine whether

the main product which is acetone will meet customers satisfaction. With effective market
research, organization can gain invaluable information about the competitors, economic
shifts, demographics, the current market trends and the spending traits of customers.

1-45
1.12.1 Acetone World Production

Acetone Production Across Region - 2012

4.58 %

26.08%
43.13 %

26.21 %

Asia Europe U.S.A Other regions

Figure 1.16: World Acetone Production in 2012

(Retrieved from www.plats.com, 2013)

The total acetone production across four regions of Asia, Europe, United States
of America (USA) and the rest, is recorded at the value of 7.6 million tonnes during 2012.
It shows that Asia is the biggest manufacturer of acetone as much as 3.278 million tonnes
per annum, following by Europe countries with the total production of 1.992 million tonnes
per annum. While, USA produces 1.982 million tonnes per annum and the rest of world
produce 0.348 million tonnes per annum.

In some instances, the high acetone production basically due to high demands.
The high acetone demand is related to methyl methacrylate (MMA) industry. The
countries such as Japan, India, South Korea and Taiwan are likely to generate more
demand for acetone cyanohydrin in upcoming years owing to huge demand from MMA
industry. Moreover, the improvement of living standard has led to the growth of the
medical, electronics and automobile industries especially in Malaysia, thereby resulting
in increased acetone demand from the various industrial production. Hence, the increase
of industrial activity will increase the demand of acetone.

1-46
1.12.2 Acetone World Demand

Acetone Demand Across Region - 2012

7.84%

38.13%
28.44%

25.58%

Asia Europe U.S.A Rest of World

Figure 1.17: World Acetone Demand in 2012

(Retrieved from www.plats.com, 2013)

Acetone demand across four region of Asia, Europe, United States of America
(USA) and rest of world, is recorded at the value of 5.966 million tonnes during 2012. The
highest demand is recorded in Asia region with 2.275 million tonnes per annum, following
by USA with 1.697 million tonnes per annum of demand. While, Europe needs 1.526
million tonnes per annum to overcome their acetone demands and the rest of world need
0.468 million tonnes per annum respectively. Hence, the demand for MMA, bisphenol A
and acetone in direct solvent applications is greatly influenced by general economic
conditions.

1.12.3 Acetone Asia Demand

In terms of demand, Asia Pacific is the leading consumer for acetone market.
China have the largest demand for acetone cyanohydrin market owing to huge demand

1-47
from methyl methacrylate (MMA) industry. Huge demand for PMMA is the key factor for
growth of MMA industry. Moreover, other countries such as Japan, India, South Korea
and Taiwan are likely to exhibit more demand for acetone cyanohydrin in upcoming years
owing to huge demand from MMA industry.

Next, a significant increase in demand and lack of sufficient domestic acetone

supply in the region helped boost acetone production in the developed regions for exports
to Asia. Asia Pacific dominated the worldwide acetone market in 2012 with a share of
43.13% in terms of consumption. Improving standards of living and rise in disposable
income in Asia Pacific has led to the growth of the medical, electronics and automobile
industries, thereby resulting in increased demand for acetone. Easily available
petrochemical feedstock and economical labor rates have stimulated the development of
the acetone market in Asia Pacific.

Given the rise in demand for acetone from numerous end-use industries, the
global acetone market anticipates a steady growth over the coming years. Table 1.12
shows that the growth rate of acetone in Asia is 4% per annum. In view of this fact, the
production of acetone can be increase from years to years due to the high demand
around the Asia, which expected to gain 7.78 million tonnes per annum in year 2020
(ICIS, 2014).

Table 1.12: Growth Rate of Acetone (www.plats.com, 2013)

REGION GROWTH RATE (%)

USA 2 P.A.

EUROPE 1.4 P.A.

ASIA 4 P.A.

OTHERS 5 P.A.

OVERALL 3 P.A.

Note: Demand to grow from 5.97 Mn TPA in 2012 to 7.78 Mn TPA by 2020

1-48
 Besides major role played by China and India in the acetone market across Asia,
acetone availability in Asia especially outside China and India has been boosted by
capacity expansion in Thailand and South Korea, alongside increase of acetone capacity
utilization in Singapore and Taiwan (ICIS, 2016). Mitsui Phenols Singapore may be in a
position to raise its acetone output to around 90% capacity in August as its raw material
supply gradually returns to normal. In addition, in Taiwan, Taiwan Prosperity Chemical
Corp (TPCC) plans to maintain its acetone plant run rate at 60% capacity in August, after
stepping up its output to this level in June (ICIS, 2016). Figure 1.18 shows the import of
acetone in Asia region between the year 2010 until 2015.

Acetone import in Asia

600000

500000

400000

300000

200000

100000

0
2010 2011 2013 2014 2015

acetone import in Asia (tonne/year)

Figure 1.18: Acetone import in Asia between 2010-2015 (ICIS, 2015).

1.12.3.1 Price

Price of acetone around the Asia shows some inconsistency for some difficulty
and gain back the high price later. Figure 1.19 illustrated the price value for Jun 2012 to
May 2013 back in 2013.

1-49
 Asia acetone price, $/tonnes
1400

1200

1000

800

600

400

200

0
Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dis 2012 Jan-13 Feb-13 Mar-13 Apr-13 Mei
2013

Figure 1.19: Asia Acetone Price from June 2012 to May 2013 (ICIS, 2014)

Spot acetone prices into China, Asia's largest market, rise by 8.5% to an average
of $1,150/tonne Cost and Freight (CFR) China in mid-February 2013, from $1,060/tonne
CFR China in mid-November 2012. Prices were driven higher by demand from the
downstream solvents, isopropanol (IPA) and MIBK sectors in China, against a backdrop
of deep phenol output cuts.

Acetone prices in Asia remained on a downtrend from mid-February to

mid-March as the sharp decline in crude futures and upstream benzene and propylene
costs dampened sentiment. However, regional producers are maintaining strict price
discipline in view of tightened availability following the run rate cuts.

Spot acetone was firm at $1,120-1,130/ tonne CFR China in early June, but trade
was subdued amid tight supply and weak demand. In some instances, the Asia acetone
price can be maintained in current years due to high demand in Asia regions.

1-50
1.12.3.2 Main Manufacturer of Acetone in Asia

Since Asia is the biggest region for acetone production, there are a few identified
companies around the Asia that produce high annually capacity of acetone as tabulated
in Table 1.13.

Table 1.13: Main Manufacturer of Acetone in Asia (ICIS, 2015)

Company Location Capacity

(tonnes/year)

Farmosa Chemicals and Fibre Mailiao, Taiwan 250 000

Kumho P&B Chemicals Yeosu, South Korea 235 000
Taiwan Prosperity Chemical Lin Yuan, Taiwan 220 000
Chang Chun Petrochemical Kaoshiung, Taiwan 186 000
LG Chem Daesan, South Korea 180 000
LG Chem Yeosu, South Korea 180 000
Mitsui Phenols Singapore Sakra, Singapore 180 000
Mitsubishi Chemical Kashima, Japan 150 000
Chiba Phenol Chiba, Japan 138 000
Lihuayi Weiyuan Chemical Pet. Lihuayi, China 130 000
Sinopec Sabic Tianjian Tianjian, China 130 000
PTT Phenol Mao Ta Phut, Thailand 124 000
Mitsui Chemicals Takaishi, Japan 120 000
Sinopec Shanghai Gaoqiao, China 120 000
Petrochemical

In Malaysia, based on finding, there is some limitation regarding industry involved

in production of acetone. Most of the solvent produced in Malaysia are involving alcohol
and petroleum ether. Since this is the first large scale acetone plant that will be establish
in Malaysia, it will benefit us in term of less potential competitor in the country.

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1.13 Market Survey on Raw Material

In this section, market survey of raw material is been investigated. The main raw
material used is isopropyl alcohol with the presence of Nickel catalyst. Both of the raw
material are been supplied by local supplier.

1.13.1 Isopropyl Alcohol World Supply and Demand

Consumption of industrial-grade isopropanol or known as isopropyl alcohol (IPA),

as a direct solvent and for chemical derivatives, accounted for 77% of total IPA demand
in the major consuming regions in 2014, and direct solvent applications accounted for
approximately 63% of total industrial-grade demand. Figure 1.20 shows world
consumption of IPA in 2014.

World Consumption of Isopropanol - 2014

6%
7%
10 %
40 %

17 %
20 %

Asia U.S Western Europe Middle East Central/South America Other

Figure 1.20: World Consumption of Isopropyl Alcohol (IHS, 2015)

It is stated that Asia region lead the consumption of IPA and has been identified as
the main supplier of the IPA. It is important to increase the availability of acetone
feedstock especially around Asia.

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1.13.2 Isopropyl Alcohol (IPA) Supplier

ChemStation Asia started as a paint retailer and steadily expanded into a regional
chemical solvent distributor. Today, they source and distribute more than 130 types of
chemicals, making CSA one of the largest privately held chemical solvent stockist in the
Asia Pacific Region.

Companys Name : ChemStation Asia (CSA) Sdn Bhd

Address : Pahang Branch

Lot 1863A, Wisma ChemStationAsia,
Jalan Pelabuhan 3/3, Kuantan Port,
25720, Kuantan, Pahang.

Penang Branch
77 & 79 Jalan Industri Beringin,
Taman Perindustrian Beringin Juru,
14100 Bukit Mertajam,
Seberang Perai Tengah, Pulau Pinang.

Johor Branch
41-02, Jalan Molek 1/29, Taman Molek
81100 Johor Bahru, Johor.

Price sell per unit : RM884.41/tonne (ICIS, 2007)

Table 1.14 shows the identification of isopropyl alcohol produced by ChemStation Sdn
Bhd (Isopropanol, 99.5+%, pure, AGROS Organic).

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 Table 1.14: Characteristic of Isopropyl alcohol

CAS 67-63-0

Assay percent range 99.5 +%

Molecular formula C3H8O

Linear formula (CH3)2CHOH

Formula weight 60.10 g/mol

MDL number MFCD00011674

Synonym 2-propanol

Chemical name or material Isopropanol , 99.8+%

Assay 99.5%min.(GC)

Grade Pure

1.13.3 Nickel Catalyst Supplier

Companys Name : Greenwell Oleochemicals Sdn. Bhd.

Address : 18, Jalan Bulan H U5/H,

Bandar Pinggiran Subang,
40150 Shah Alam, Selangor.

Price sell per unit : RM 5.90/ kg (UN camtrade, 2015)

Table 1.15 shows the physical properties of Nickel catalyst G-56 obtained from Greenwell
Oleochemicals Sdn Bhd.

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 Table 1.16: Physical Properties of Commercial G-56 Nickel Catalyst

Nickel content (%) 92

Surface area 90
Porosity 0.5
Apparent density (g/cm3) 3.76
Average particles diameter () 10

1.14 Market Survey on By-Product

From dehydrogenation of isopropanol alcohol with the present of Nickel metal

catalyst at operating temperature and pressure of 250C and 1 atm respectively, main
product produced from the reaction is acetone and hydrogen gas as by product. Market
survey on the corresponding by products produced from the reaction is necessary to
evaluate the demand of hydrogen gas in market segment. Hence, the high demand for
hydrogen gas in Malaysia will increase the profit gained for organization.

1.14.1 Hydrogen World Demand

As a new company, the sale of the by-product can help in generate additional
profit. Hydrogen gas produced from the isopropyl alcohol dehydrogenation process can
be one the source of income as planned to sell the hydrogen gas to the company that is
specializes in marketing industrial gases. Due to the constant demand of hydrogen gas
in the industry, it is believe that it will be very a good step to generate income from the
hydrogen gas by-product rather than burning it as a fuel or vent it to the atmosphere.

Growth in the hydrogen market is driven primarily by the growth in transportation

fuels. Since the crude quality is debatable lower, it requires more hydrogen to produce
new solution of fuel. Hence, the hydrogen gas can be commercialize in large scale
across the world due to its various application and high demands. Figure 1.21 shows the
world consumption of hydrogen in 2014.

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 World Consumption of Hydrogen - 2014

5% 5%
8% 25%
8%

12%
25%

10%
12%

Southwest Asia Eastern Europe Western Europe

Southest Asia South/Central America Africa
Northest Asia Central Europe Ocenia

Figure 1.21: World Consumption of Hydrogen (IHS, 2015)

Higher growth rates are expected in China resulting from high levels of urban
pollution and thus, there are some efforts to reduce the pollution by replacing current
sulfur fuel. Though Western Europe and Japan have stagnant markets, North America is
expected to increase hydrogen consumption mostly because of the abundant petroleum
feedstock supply and advanced technologies.

In addition, ongoing oil sands processing, gas-to-liquid and coal gasification

projects require high amount of hydrogen. It will boost the demand significantly in the
next five years. Alberta and Canada has a huge area containing oil sands that can be
utilized to produce oil. Furthermore, hydrogen is also expected to increase the
consumption in the manufacture of methanol. Substantial methanol consumption in
direct-fuel use as motor gasoline especially in countries such as China, Russia, South
Africa, Venezuela and several Middle Eastern countries.

Overall global demand for hydrogen is expected to increase by around 5-6%

during the next five years, primarily as a result of demand from petroleum refinery
operations, and the production of ammonia and methanol. Asia will continue to lead

1-56
demand growth in line with the regions increasing growth of domestic economies (IHS,
2015).

1.14.2 Acetone Potential User in Malaysia Based on Industry

It has been identified a few manufacturing around Malaysia that used acetone as their
main raw material. Hence, those companies are categorized as main target market.
Table 1.17 shows the list of the related company. Since the purity of acetone that produce
is 98%, hence, the target markets that would use in their industrial product are solvent,
chemical intermediate (BPA/MMA) and domestic (3D printing).

Table 1.17: Potential User in Malaysia Based on Industry.

Industrial Product Companys Name

Chemfield Sdn. Bhd.

No. 1, Laluan Industri Lahat 3, Kawasan
Perindustrian Rima, 31500 Lahat, Ipoh,
Perak Darul Ridzuan, Malaysia.
Solvent
(Purity of Acetone: >95%) Duro Kimia Sdn. Bhd.
No.29, Jalan PJU 3/49
Sunway Damansara Technology Park
47410 Petaling Jaya
Selangor Darul Ehsan.

Mitsubishi Chemical Singapore PTE LTD

Chemical Intermediates
(BPA/MMA)
(Purity of Acetone: >95%)
60 Anson Road #10-01, Mapple Tree Anson,
Singapore 079914
Asia Poly Industrial Sdn. Bhd.
Lot 758, Jalan Haji Sirat, Mukim Kapar, 42100
Klang, Selangor Darul Ehsan, Malaysia

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 B.Braun Medical Industry Sdn. Bhd.
11900 Plot 92, Hala Kampung Jawa 1, Bayan
Lepas Industrial Estate, Phase 3,
Medical and Cosmetics 11900 Bayan Lepas,
(Purity of Acetone: 99.5% - Pulau Pinang, Malaysia
99.9%)
Cambridge Herbal Sdn. Bhd.
No. 6, Jalan SBJ 1,, Taman Perindustrian
Sungai Buloh Jaya,, 47000 Sungai Buloh,
Selangor, Malaysia.

Vagler International Sdn. Bhd.

Domestic (3D Printing)
(Purity of Acetone: >97% )
2006 Jalan Jelawat,
Seberang Jaya Industrial Estate,
Prai, 13700 Pulau Pinang,
Malaysia
Laytac Innovation Sdn. Bhd.
No. 11A, Lintang Bayan Lepas 6,
Bayan Lepas Industrial Park, Phase 4,
11900 Bayan Lepas,
Penang, Malaysia

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1.15 Production Rate and Profitable Study

1.15.1 Yearly costs and Stream Factors

In order to calculate the yearly cost of raw material, the fraction of time that the plant is
operating must be known. The most suitable range values of stream factor (SF) are in
range of 0.90 till 0.96.

Assuming maximum value of stream factor giving SF = 0.925

Stream factor SF = (number of days plants operate per year) / 365)

Therefore,

0.925= (number of days plants operate per year) / 365

Number of days plants operate per year = 365 x 0.925

= 337.6 338 days

1.15.2 Profit Margin

Profit margins are percentage and, in effect, measure how much out of every RM
of sales a company actually keeps in earnings and can be expressed as follow.

Profit = total revenue total cost

1.16 Estimation of Total Capital Investment

Besides focusing on the price of raw materials, a large sum of investment to

establish a fully operational plant must be made. Fixed capital cost is the sum of money
required to invest at early stage of the plant construction. Purchasing necessary
equipment plus installation is crucial as it will be themain investment that will determine
thecompatibility of of the plant together with piping installation, lan, instrumentation,
services and the land where the plant is going to be established. Assumption on the main
equipment cost necessary for production of acetone from isopropanol with capacity of

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100 000 MT per year is made to estimate fixed capital investment for the process.
Assumed installation cost for major equipment involved in the process being stated in
Table 1.18.

Table 1.18: Installation Cost for Major Equipments

(Felder, R. M. & R. W. Rousseau.,1986)

Equipment Unit Cost per unit in Total Cost in

millions (RM) millions (RM)
Storage tank 3 0.98 2.94
Pump 9 0.088 0.792
Heat exchanger 2 0.21 0.42
Vaporizer 1 0.9 0.9
Condenser 1 0.045 0.045
Compressor 1 0.8 0.8
Packed bed reactor 1 6.30 6.30
Flash 1 0.13 0.13
Acetone distillation 1 4.2 4.2
column
IPA distillation 1 4.2 4.2
column
Distillation column 1 4.2 4.2
Absorber 1 4.2 4.2
Total Cost of 29.127
Equipment

From Table 1.18, the total equiment cost required for 100 000 metric tonne per
year is RM 29,127,000. The fixed capital investment will be consisting of two category,
direct cost and indirect cost. The components of the direct costs and indirect costs are
justified based on the percentage from the total equipment cost. Summarized in Table
1.19 is the estimated fixed capital cost/investment for each category.

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 Table 1.19: Estimated Fixed Capital Investment

Components Estimations Cost (RM)

Direct Cost

Total equipments cost - 29,127,000

Equipment installation cost 40% of total equipment 11,650,800

(include installation and cost
painting)

Piping system installation 50% of total equipment 14,563,500

cost

Instrumentation and control 20% of total equipment 5,825,400

cost

Electrical system installation 15% of total equipment 4,369,050

cost

Services facilities 50% of total equipment 14,563,500

cost

Building, process and 40% of total equipment 11,650,800

auxiliary cost

Land RM150/sqmetre 17,027,027

Yard improvement 12% of total equipment 3,495,240

cost

Total of direct cost 112,272,317

Indirect cost

Engineering and supervision 10% of total direct cost 11,227,231.70

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 Construction fees

Legal expanses 10% of total direct cost 11,227,231.70

Contractor fees 5% of total direct cost 5,613,615.85

Contigencies 12% of total direct cost 13,472,678.04

Total of indirect cost 415,407,757.29

Fixed capital investment 153,813,074.30

1.16.1 Total Capital Investment

In general, the total capital investment in a chemical process is made up of two

components:

Total capital investment = Fixed capital + Working Capital

The amount of capital required to start up the plant and finance the first few months of
operation before revenues from the process start is called working capital. Typical values
for the working capital are between 15% - 20% of the fixed capital investment (Richard
T., et al).

Working capital = 15% x RM 153,813,074.30

= RM 23,071,961.15

Therefore,

Total capital investment = Fixed capital + Working Capital

= RM 153,813,074.30+ RM 23,071,961.15

= RM 176,885,035.20

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1.17 Operating Capital Cost

Operating capital cost which comprise of variable cost plus fixed capital cost is
necessary in order to operate chemical plant. Listed below are the components of the
working capital that need to be taken into account;

1. Raw material cost

2. Catalyst
3. Labors cost
4. Utilities

However, in this chapter only cost of raw material, catalyst and labors cost used have
been highlighted in calculated operating capital cost.

1.17.1 Annual cost for raw material (Isopropanol)

Price of isopropanol = RM884.41/tonne (ICIS, 2007)

Annual cost for isopropanol:

204.38kmol 60.09kg 338d 24hr RM 884.41 tonne

RM 88,109,388.13 / year
hr kmol yr 1d tonne 1000kg

Cost of raw material Raw material usage Annual cost for raw
(isopropanol) material
RM884.41 / tonne 99,625,047.35 kg/yr RM88,109,388.13/yr
(ICIS, 2007)

1.17.2 Annual cost for catalyst

For tubular packed bed reactor, catalyst weight up to distance of 200 meter tall
and 3.0 meter diameter can be calculated from equation below;

1-63
W = (1- )(Ac)(z) x pc

Where W is the weight of catalyst, is the porosity of catalyst, Ac is cross sectional area,
z is length down the packed bed reactor and pc is the density of solid catalyst particles.
All these data can be obtained from Table 2.2 above. Price of nickel catalyst is about
RM5.90/kg (UN comtrade, 2015).

W = (1- 0.5)(90m2)(200m) x (3760 kg/m3)

= 33 840 000 kg of nickel granules required per year

Price of catalyst required:

= 33 840 0000 kg nickel granules x RM5.90/kg nickel granules

= RM199 656 000/year

Cost of catalyst Catalyst usage Annual cost for catalsyt

RM5.90/kg 33 840 000 kg of nickel RM199 656 000/year

(UN comtrade, 2015) granules/ year

1.17.3 Annual cost for raw material (DMSO)

Price of isopropanol = RM1240/tonne (ICIS, 2007)

Annual cost for isopropanol:

204.38kmol 78.13kg 338d 24hr RM 1240 tonne

RM 160,622,302.20 / year
hr kmol yr 1d tonne 1000kg

Cost of raw material Raw material usage Annual cost for raw
(DMSO) material
RM1240 / tonne 129,534,114.70 kg/yr RM160,622,302.20/yr
(ICIS, 2007)

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Total operating cost = annual raw material cost + annual catalyst cost

= RM88,109,388.13 + RM160,622,302.20 + RM 199,656,000.00

= RM 448,387,690.30

1.17.4 Expected revenue

Expected revenue from acetone production:

100000MT 1000kg RM 130

RM 5,200,000,000 / year
YR 1MT 2.5kg

1.17.5 Labor Cost

The technique used to estimate operating labor requirements is based on data

obtained from five chemical companies and correlated by Alkayat and Gerrard.
According to this method, the operating labor requirement for chemical processing
plants is given by:

NOL = (6.29 + 31.7P2 + 0.23Nnp)0.5

where NOL is the number of operators per shift, P is the number of processing steps
involving the handling of particulate solids, for example, transportation and
distribution, particulate size control, and particulate removal. Nnp is the number of
nonparticulate processing steps and includes compression, heating and cooling,
mixing, and reaction. In general, for the processes considered in this text, the value
of P is zero, and the value of Nnp is given by:

Nnp =
A single operator works on the average 49 weeks a year (3 weeks time off for vacation
and sick leave), five 8-hour shifts a week. This amount is:

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 49 5

x
= 245

Basically a chemical plant operates 24 hours/day. This require,

5 361
Number of shift per year =
x
= 1805

The number of operators that needed to provide this number of shifts is,

1805

= 7.3 operators
245
/

Table 1.20: Result for estimation of operating labor requirement for the acetone
process using the equipment module approach.

Equipment type Number of equipment Nnp

Tank 3 -
Pump 9 -
Heat exchanger 2 2
Vaporizer 1 1
Condenser 1 1
Compressor 1 1
Pack bed reactor 1 1
Flash 1 1
Absorber 1 1
Distillation column 3 3
Total 23 11
*Pump and tanks are not counted in evaluating Nnp.

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By using equation,

NOL = (6.29 + 31.7P2 + 0.23Nnp)0.5

= (6.29 + 31.7(0)2 + 0.23 (11))0.5
NOL = 2.969

The number of operator required per shift = 2.969x 7.3 operators

= 21.673 22 operators per shift

Hence, the number of labor = 22 operator/shift x 2 shift

= 44 operators

Labor cost = 44 operators x RM 42000/year

= RM 1,848,000.00/year

Table 1.21: Total manufacturing cost

(Karl K. & Reni M.S., 2014)

Direct manufacturing cost Specification Cost (RM)

Patent and royalties 3% FCI 4,614,392.22

Operating labor cost 1,848,000.00
Maintenance and repairs 6% FCI 9,228,784.46
Operating supplies 0.9% FCI 1,384,317.67
Direct supervision and clerical 15% Operating Labor 277,200
labor
Lab charges 15% Operating Labor 277,200
Plant overhead 50% Operating Labor 924,000
Total Direct Manufacturing 18,553,894.34
Cost
Fixed manufacturing cost

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 Local taxes 1% FCI 1,538,130.74
Insurance 2% FCI 3,076,261.48
Total Fixed Manufacturing 4,614,392.22
Cost 23,168,286.56
Total Manufacturing Cost
General expanses
Administration cost 20% Operating Labor 369,600
Distribution and selling cost 7% FCI 10,766,915.2
Research and development 5% FCI 7,690,653.72
Financing 10% Total Capital 17,688,503.52
Investment
Total General Expanses 36,515,672.44

Thus, the total production costs are as below,

Total Production Cost = Total manufacturing expenses + total general expenses +

total raw

Material

= RM23,168,286.56 + RM36,515,672.44 + RM 448,387,690.30

= RM 508,071,649.30

Annual Depreciation = 10%FCI

= 0.1 x 153,813,074.30

= RM 15,381,307.40

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Total Expenses = Total production cost + Annual depreciation

= RM 508,071,649.30+ RM 15,381,307.40

= RM 523,452,956.70

Net Annual Profit = Revenue from sales total expenses

= RM 5,200,000,000 RM 523,452,956.70

= RM 4,676,547,043

Income taxes = 25% x Net Annual Profit

= RM 1,169,136,761

Net Annual Profit = RM 4,676,547,043 - RM 1,169,136,761

= RM 3,507,410,282

1.18 Break Even Analysis

One of the most common tools used in evaluating the economic feasibility of a
new enterprise or product is the break even analysis. The break even point is the point
at which revenue is exactly equal to costs. At this point, no profit is made and no losses
are incurred. The break-even point can be expressed in terms of unit sales (Rob
H.,1998). The break even units indicate the level of sales that are required to cover costs.
Sales above that number result in profit and sales below that number result in a loss.

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1.18.1 Break Even Point

Break even point:

TR = TC

PQ = FC +VC

Since VC = VQ then,

PQ - VQ = FC

Q( P-V) = FC

Q =

From the value achieved, the break point can thus be calculated as follows:

Q=

153,813,074.3
Q=
52000 8024.41

= 3497.69 tonnes

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1.19 Cumulative Cash

Table 1.22: Discounted after-tax cash flows (CAPCOST)

*All number is in RM 106

Payback period = 3 + ((cumulative cash flow for the third year + (cost of land +
working
capital)) / (cumulative cash flow for the third year cumulative
cash flow
for the fourth year)

=3 + ((2,439,660,000+ (17,027,027.00 + 23,071,961.15)) /

(2,439,660,000 - 4,815,790,000)
= 1.5 2 years

1.20 Conclusion

Based on the observed trends, Asian has emerged as an important manufacturer

of acetone and will continue to produce huge volumes based on the rapidly rise of
demands. Improving standards of living and rise in disposable income in Asia Pacific has
led to the growth of the medical, electronics and automobile industries, thereby resulting
in increased demand for acetone.

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 Factors that support the establishment of acetone manufacturer are high demand
of acetone supply in Asia, the availability of raw material across Asia especially in
Malaysia and Market availability of hydrogen by-product in Asia.

Based on the result of the economic analysis, the break-even point that obtained
is 3497.69 tonnes which mean this plant will only start to get the income after manage to
manufacture that volume of acetone. Based on calculation of cash payback period it
would take approximately 2 years for the plant to obtain its full investment back.

1.21 Site Location

Selecting strategic location for operating new plant is the hardest decision to
make. Many factors need to be consider, as they have crucial effect on the profitability of
a project. In order to setup up a chemical plant that produce 100,000 metric tonne/year
of acetone in economically and environmentally friendly, the practicability study need to
be done first. From the study, the selection of the site must give the priority to the location
that is available for raw material, low cost of operation, marketing of the product,
availability of the land, and also utility service such as water supply and electricity. The
brilliant site chosen will generate high profitability with low expenses of operation in the
future.

1.22 Factors in Selection Criteria

In order to select strategic location for the chemical plant, there are a few factors that
must be taken into consideration. The factors are:

a) Source of the raw materials

b) Industrial land pricing
c) Utilities support
d) Labour
e) Transport
f) Government incentive
g) Waste and effluent facilities
h) Safety issues

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 Each of the factors mentioned play different role in making the site location more
reasonable to be selected. All of these factors are important to the plant start-up operation
which will make sure the plant can operate successfully in long period of time.

1.22.1 Sources of the Raw Materials

The availability and price of raw materials is the most important factor that must be
consider when the site location is selected especially when the raw materials is required
in a large amount. Plant that producing bulk chemicals is good to be locate close to the
source of the raw material. The production of acetone required isopropyl alcohol as the
raw material. To meet the minimum target of 100,000 metric tonne/year of production of
acetone, bulk and continuous supply of isopropyl alcohol is needed and it is important to
ensure that the supply of isopropyl alcohol must not to be cut off. It is more convenient
that the supplier is nearby at the selected location. Advantage of availability of raw
material at the nearby location of industry is that it involves less cost in terms of
transportation cost.

1.22.2 Industrial Land Pricing

Sufficient land site must be available for acetone chemical plant setup and for future
expansion of the plant. The industrial land chosen should be ideally flat, well drained and
have suitable load-bearing characteristic to reduce construction cost involved. Building
on hilly area will add additional construction costs to the building process. Good drainage
is therefore essential. Sites that will built on clay based soil may need additional drainage
to avoid flooding which may cause another additional construction costs. Price of the land
should take into account in order to make full evaluation on site selection. Industrial land
not having the same value as commercial land. The value of industrial land is different
according to the location. The price of the potential location selected need to be low so
that high return investment could be obtained in a short term.

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1.22.3 Utilities Support

In petrochemical plant, high usage of utilities like power and water are needed for
general use in chemical plant. Acetone process required large quantities of water for
general process use and cooling. Adequate water supply at low cost may become a
dominant factor that effect selection process of industrial location. The plant must be
located near a source of water supply of suitable quality. Process water may be drawn
from well or purchased from local authority. Electrical power is highly required in every
chemical plant. Power situation should be studied with reference to its reliability,
adequacy, rates, power requirements, subsidy for standby arrangements and others. In
the acetone production process, it has a few heater and reactor which consumed high
electricity for the operation. To ensure the operation of plant does not disturb, it is
compulsory to make sure that the site location located close to a low-cost power source.

1.22.4 Labour Availability

The availability of labour is often related to transportation issues. Clearly, plants will
need to be located close to centres of population that is large enough to supply the
workforce required for the plant to operate. Professional worker is usually brought in from
outside the site area, but the adequate of unskilled workers should be available locally.
A high-quality transport infrastructure will enable the workforce to be drawn from a
greater distance.

1.22.5 Transport Facilities

Transportation facilities is the major factor that contribute to the successfulness of

chemical plant. It is practicable if the site selected close to at least two major forms of
transport; road, rail, water way (canal or river) or a sea port. The good transportation
facilities will help the expansion of the business in the future by import and export
activities. Road transport is suitable for local distribution from warehouse while rail
transport will be used for long distance transport of bulk chemicals at cheaper cost. Water
transport like seaport are most suitable for international activities which used tanker or
cargo ship as transporter while air transport is convenient to be apply for the movement

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of personnel and essential equipment and supplies. However, the distance of the site to
a major airport should be considered.

1.22.6 Government Incentive

The incentive from government to the factories is to attract new investment to

preferred location. The incentive involves the income tax, exception of the duty import,
sales tax and excise tax. The availability of such incentives can be the overriding
consideration in site location as it reducing initial operating cost.

1.22.7 Waste and Effluent Facilities

All chemical plant should consider about the environmental impacts that will be
caused by the waste they produce. The disposal of toxic or harmful effluents or emissions
will base on the local regulations, and thus appropriate authorities must be consulted
during the initial stage of site surveying to determine all the requirement and standards
that must be met. The selected location must have proper facilities to dispose waste if
the chemical plant is planning to treat the waste off-site or the management can pay other
authority to treat and dispose the waste. The registered authority should within the area
of site location to minimize management cost.

1.22.8 Safety Issues

The safety issues involved the emergency response when there is any accident
happen in industry. The location of site also depends upon the delivery of emergency
services like fire, police and hospital. The nearby residence area also need to take into
consideration if there is fire, explosion or toxic release from plant. Site should be well
away from residential area to avoid major accident effect the population. Fire safety
measures need to be taken into account where fire and heating is needed for production
process.

The other safety issues that need to focus is buffer zone. Buffer zone is classified as
the separation area or separation distance between two or more areas or activities in
order to prevent potential conflicts and for protection of the environment. Buffer zones

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are intended to safeguard and protect human lives, properties, comfort and well-being
and sensitive ecological resources from:

a) Fire or explosion
b) Noise and vibration
c) Air pollution
d) Water pollution
e) Smoke and fume
f) Odorous emissions
g) Artificial light
h) Aesthetic concerns
The presence of an adequate buffer zone represents the primary means to determine if
a site is appropriate for the particular industry or activity taking account of the immediate
and adjacent land use and characteristics of the receptor around the selected site.
Through the guideline for the manufacture of chemical and chemical products, the
minimum buffer zone prefer is 500 meters from site location gate to nearby residence
area or 600 meters from the plant building [1].

1.23 Site Location

Acetone production process involve in the production of chemical compound

that is volatile and flammable thus site location is important to minimize impacts on
operations, local community and environment in case of any accident happen. Acetone
chemical plant should be built in the industrial area that suit to it industry which is
petrochemical industry. According to the official website of Malaysian Investment
Development Authority, there are a few industrial parks that are focus on petrochemical
industrial zone [2]. The locations are:

i) Gebeng Integrated Petrochemical Complex

ii) Pengerang Intergrated Petroleum Complex
iii) Kerteh Petrochemical Complex

This three-site location are suggested according to certain criteria that must be
measure to meet the need for a new factory or industry to start the operation. All of these

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criteria need to be evaluated and make comparison with each other to select the best
industrial park for acetone production plant. The most important criteria are type of
industrial activity that is running at that industrial park. According to Malaysian Investment
Development Authority (MIDA), there are three major location that is highlighted as
petrochemical industrial zones which are Kertih at Terengganu, Gebeng at Kuantan and
Pengerang at Johor. The area for setup new factory at each location are available but it
also depends on the capacity of the location because each location has different
capacity. From the Table 1.23, the capacity for Kertih is smaller than to Gebeng and
Pengerang.

The location that is suggested by MIDA are already exist since 2000. In the article
stated in MIDA website, there is new petrochemical zones have been established at
Johor to support the request form the global investor. With that, Pengerang Intergrated
Petroleum Complex which petrochemical based industry is developed. This complex is
expected to fully operate on 2019. Table 1.23 below summarized the details of each
industrial zone that have potential to be chosen as plant location.

Table 1.23: Criteria of Site Locations

Location data Gebeng Pengerang Kertih

Distance from 25 km from Kuantan 30 km from Pasir 142 km from Kuala
city Town Gudang Terengganu

Type of industry Petrochemical, Petrochemical and Petrochemical and

chemical & any refinery refinery
compatible

Area available 1557 hectare 9105.42 hectare 24 hectare

Land price(per RM150 - RM194 RM64-RM88 RM60-RM90

m2)
Government Available Available Available
Incentive
Raw material Chemstation Asia, Chemstation Asia, Chemstation
Supplier Pahang Johor Asia,Pahang

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 Power Supply Gebeng TNB Sultan Iskandar Kerteh Gas Power
Power Station (TNB) Plant (216 MW)

Pasir Gudang Power Sultan Ismail Power

Station (YTL Power Station (TNB)
International Bhd) (1136MW)

PETRONAS Power
Plant (future
planning)
Electric tariff 29.60 RM/kW @ 29.60 RM/kW @ 29.60 RM/kW @
(Pricing and Tariff,
2016) 33.70 sen/kWh 33.70 sen/kWh 33.70 sen/kWh
Water Supply Pengurusan Air SAJ Holding Sdn Terengganu Water
Pahang Berhad Bhd Company (SATU)
(PAIP)

Water tariff 0 35m3 @ 0 35m3 @ RM1.15/m

[3] RM2.80/m3 RM2.80/m3
Minimum = RM50.00
> 35m3 @ > 35m3 @
RM3.30/m3 RM3.30/m3

Minimum = RM30.00 Minimum = RM30.00

Port Facilities Kuantan Port Pengerang Kuantan Port
Consortium Sdn. Petroleum Terminal Consortium Sdn.
Bhd Tanjung Langsat Bhd
Petroleum Terminal

Airport Kuantan Airport Senai International Kertih Airport

Airport, Johor and
Changi International
Airport, Singapore
Railway Gebeng Railway KTM Singapore- Kuantan-Kertih
facilities Kuantan-Kertih North peninsular Railway
Railway route

Roadways East coast highway Second Link East-Coast Highway

Expressway
Senai-Desaru
Expressway

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 North-South
Highway
Population 700 000 40 000 50 0000

Waste water Kualiti Alam Sdn Kualiti Alam Sdn Kualiti Alam Sdn
management Bhd, Bukit Nenas, Bhd, Bukit Nenas, Bhd, Bukit Nenas,
Negeri Sembilan Negeri Sembilan Negeri Sembilan

Kualiti Alam Sdn Bhd Kualiti Alam Sdn Kualiti Alam Sdn
Bhd Bhd
Safety issues 2.5 km from nearby 21.4 km from nearby 6.4 km from nearby
residence residence residence

14.3 km from nearby 3.5 km from nearby 10.0 km from

fire station fire station nearby fire station

5.8 km from nearby 82.6 km from 11.2 km from

clinic nearby hospital nearby clinic
78.0 km from nearby 11.5 km from
11.0 km from nearby
police station nearby police station
police station

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1.23.1 Site location Evaluation

In making the best selection of the site location, the metric scoring method is used
to ensure fairly judgement for each site location for acetone plant setup. The guideline
for the evaluation is prepared as Table 1.24.

Table 1.24: Guidelines for Site Evaluation

Factors 7-10 Marks 4-6 Marks 0-3 Marks

Supply of raw Able to obtain Source of raw Forced to
material large supply materials from import from
locally thus neighbouring foreign
saving on import states. countries.
cost Transport
Having long materials using
pipeline local
networks for transportation.
transportation of
raw material.

Price and Area of Land area Land area below Land area below
Land exceeding 1000 500 hectares 100 hectares
hectares Price of land Price of land
Price of land between RM more than RM
below RM 100 101-200 psm 201 psm
psm
Local Incentives from Incentives from No incentives
Government the local the local from the local
Incentives organization of organization of organization of
country country country
development development development
Incentives from
special company

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Safety Issues Near from public Far from public Far from public
service (police service (police service (police
station, fire station, fire station, fire
station, hospital) station, hospital) station, hospital)
Have save Have save Close distance
distance from distance from from residence
residence area residence area area

Transportation Complete Good federal Average road

network and well road and system
maintained highway system No highways or
highways, Limited railway expressway
expressways system access system in close
and roads More distant proximity
International from the ports No railway
Airport facilities Airport facilities system
access to the which may not Very distant
main location have from the ports or
around the world international harbours
Location near to flight facilities- Distant form the
international port only providing nearest airport
which import domestic flight more than
and export 100km away
activities
Reliable railway
lines to remote
areas not
accessible by
roads

Worker Supply Have enough Have moderate Do not have

professional professional professional
workers workers workers

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Utilities Have stable Have less Always have
utilities supply disruption of disruption of
utilities utilities

Waste Water Provide waste Only have own Does not have
Disposal water disposal waste disposal proper disposal
system by other system system
agencies
Have own
disposal system

Table 1.25: Evaluation Marks for Each Site Location

Criteria
Gebeng Pengerang Kertih

Supply of Raw
9 7 6
Material

Price 5 7 7

Area of Land 7 8 3

Local
Government 8 8 7
Incentives

Safety Issues 6 4 6

Transportation 8 8 8

Workers Supply 10 7 10

Utilities, water
7 7 7
and electricity

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 Type of industrial
8 7 7
and its location

Waste water
8 8 8
disposal

Total 76 71 69

Based on the evaluation made in Table 1.25, the selected location for acetone
plant construction is in Gebeng Industrial Park in Kuantan, Pahang. The location is
justified to be the most suitable and strategic compared to the others locations based on
all the criteria stated in Table 3.1. Acetone chemical plant suited to be built in this
industrial park as Gebeng Industrial Park is a land ready with infrastructure for a world
class chemical and petrochemical industrial zone. It is a thriving section of commercial
activity where numerous multinational corporations in the petrochemical sector are based
at thus will provide huge market potential for acetone marketing and give high return
investment in just a few years. Our main isopropanol suppliers which are ChemStation
Asia (CSA) Sdn Bhd and Amoco Chemical Sdn Bhd which located in the same district
will allow easy access between each other in supplying the raw material at low
transportation cost. Continuous supply of raw material is important to ensure that
production process can run smoothly without any restraint due to raw material problem.

With huge industrial land for chemical and petrochemical industry totalling 8,600
hectares of land, it is strategically located only 5 kilometres from the Kuantan Port. This
proved that Gebeng Industrial Park has good accessibility not only through main trunk
road (road via the East Coast Expressway connecting to Gebeng By-Pass and Kuantan
By-Pass) but also through sea lane. These two routes provide cost effective and
convenient means of transportation enabling more efficient transfer of product and raw
materials locally as well as for international channels. Besides these two routes, Gebeng
Industrial Park just 36 km away from Sultan Ahmad Shah Airport, Kuantan and there is
railway (Kuantan-Kerteh Railway) that provide a direct link between Gebeng and Kuantan
Port and offer a cost effective and efficient method in transporting of chemicals to and
from the industrial site. Moreover, a wide range of tax incentives is also available. These

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incentives are constantly reviewed by the government to ensure that industries in
Malaysia maintain their competitive edge [2].

Current infrastructure and facilities available there such as 9 kilometer common

pipe rack that connects the petrochemical plants of Gebeng Industrial Park to and from
the tank farm facilities at Kuantan Port function to boost Gebeng and Kuantan Port's
infrastructure capabilities. Besides, it also consists of liquid chemical berths to facilitate
safer and faster transportation of petrochemical products make it more convenient for
acetone chemical plant setup. The variety excellent berthing facilities include multi-
purposed berths, liquid chemical berths, palm oil berths, mineral oil berths & container
terminals totalling 2,981 metres in length. These kinds of facilities guarantee sufficient
supply of industrial gases, steam, demineralised water, cooling water and nitrogen to
industries presence in Gebeng area. Figure 1.23 below showed satellite view of Gebeng
Industrial Park. From the figure, it showed that there are a few residential areas like
kampong Hulu Baluk, Kampung Berahi, Padang Serai located nearby Gebeng Industrial
Park. With population about 70 000 people, adequate pool of skill and unskilled available
locally.

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Figure 1.22: Map of Gebeng Industrial Park [4]

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Figure 1.23: Satellite view of Gebeng Industrial Park

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 Figure 1.24: Suggested Site Location

Figure 1.24 above shown the suggested site location at Gebeng Industrial Park.
Figure 1.24 is at zoom condition where the site can be see clearly and related from figure
1.23. The other figure which is figure 1.25 is the plant layout for the site location. The
arrangement of the building and others structure are provided. The arrangement is made
by considering the area of the location and also the wind direction. The wind direction
data is collected from the nearest airport which is Kuantan Airport [5]. The wind direction
is identified coming from north east of the plant. The tanks are placed at the top to prevent
the fire reach the tanks when plant is caught by fire. If the tanks are in danger, the
distance between tanks and operation plant still can avoid the fire from causing fire.

At the moment data is gathered, the wind speed at 4 knot. The distance between
admin building and operation plant is at save condition where it can avoid fire from plant
to reach admin building. The assembly point is placed at open area and far from danger.

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Figure 1.25: Plant layout

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1.24 Conclusion

To fulfil the acetone demand in Malaysia as solvent and intermediates in chemical

manufacturing, acetone chemical plant is expected to be built in Gebeng Industrial Park
as it has the capacity to produce 100 000 metric tonnes of acetone per year. There are
a few factors that proved the capabilities of Gebeng Industrial Park as promising
petrochemical zone in Malaysia. The selection of Gebeng Industrial Park as preferred
site location for acetone production process is based on the source of the raw material
which can be supply by ChemStation Asia Sdn Bhd and Amoco Chemical Sdn Bhd which
located in the same district with the industrial park. This not only promise the continuous
supply of isopropanol as raw material but it also helps in reducing transportation cost due
to short distance between these locations. Besides that, Gebeng has huge potential
market as the site comprises petrochemical plants producing acrylic monomers, oxo
products and butanedi that used acetone as the intermediates in production process. In
nutshell, Gebeng Industrial Park prepared to serves as industrial land for high production
of acetone from isopropanol annually.

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