EBP 314 - A Report on Developing a PPD Manufacturing Plant (G3)

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POUR POINT DEPRESSANT (PPD) PLANT

1.0 ABSTRACT

PPD are used as lubricant additives for crude oils. In low temperature and winter

conditions, waxes in crude oils will deposited and congeal the pipelines and production

equipment during transportation and production. EXZA Company Sdn. Bhd. is producing

PPD for oils and gas industries to help these industries solve the problem of oils

transportation. This report details on the expansion of the chemical plant of EXZA Company

in order to incorporate new technology used to manufacture PPD. Organization chart of the

company is also included into this report. The report will be focused on the development of

new facilities to produce new type of PPD; namely the EVA-based aqueous PPD

dispersion. Details on the process, equipment and economy prospects were encrypted in

this report.

Keywords: crude oil, low temperature, PPD.

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2.0 INTRODUCTION

2.1 Company Profile

Name of company EXZA Company SDN. BHD

Business Type PPD manufacturer

Main Market Asia Pacific

Official Websites www.exza.com

Telephone Number +604 229 6141

Fax Number +604 229 1336

Address 12-03-C, Menara ABC, Jalan Sultan Ahmad Shah, 10150

Penang, Malaysia.

Date of Incorporation 23 March 2015

Company Registration No. 734113-P

Registered with Kementerian Kewangan Malaysia Government Bodies

(357 01011749)

No. of Employees 55

Tagline Extraneous Innovative Progressive

Vision To be viewed as the best PPD company in the world.

Mission We satisfy our customers by delivering results through

quality PPD and services. Our desire to grow drives our

passion to win in the marketplace. With a unified, low-cost

operating structure, well remain competitive across every

business and in every geographic region.

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2.2 Logistics

What is logistics? Logistics is the part of the supply chain process that plans,

implements and controls the efficient flow and storage of goods, services and related

information from the point of origin to the point of consumption, in order to meet the

customers requirements. Logistics industry is one of the catalysts for the development of

industrialization in Malaysia which is linked to the international trade. In Plant Design,

location or geographic of a plant is one of the very crucial factors to determine the

successful of any chemical business venture.

Based on few considerations, the ideal location of our plant is at Parit Buntar,

Perak. Figure 1 location of our plant. The details are displays in below:

Address: Lot 123, Jalan Perusahaan SatuDuaTiga, Kawasan Perusahaan Parit Buntar,

34200 Parit Buntar, Perak Darul Ridzuan, Malaysia.

Size: 87120 square feet (8093.7128 m2)

Cost: RM 4,500,000 = $1,230,147.41

There are many factors must be considered during selecting the desired plant site of

a plant. The location of plant should be:

Good access to liquids-rich natural gas resources, water, road and rail transportation

infrastructure

Be a good scope for plant expansion and a conducive environment, safe living

conditions for easy plant operation

A safe living conditions for plant personnel as well as the surrounding community

Power grids, economics, and sufficient acreage to accommodate facilities for a world-

scale petrochemical complex and potential future

Raw material availability: some of the raw materials required like Ethylene Glycol is in

the vicinity of the plant location. Besides, Parit Buntar is near to Penang jetty too which

it makes the transportation of raw material, equipment, and finish product more easy

and convenient.

Reasonable land price: after compare few industrial land in Parit Buntar, we found that

this land sell at the lowest price which is RM 40 per square feet. Table 1 displays the

land tax capacity and land tax effort indices by state governments in 2008. It can be

seen that Perak is having the moderate land tax capacity. This is beneficial for the

company future development.

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Good source of utilities

Excellent infrastructure and transportation: near to jetty, highway and railway.

Government incentives: Malaysia government encourages the establishment of more

new plant by giving special incentives. One of the incentives given is a 5 year

exemption on import duty. A company will be given the opportunity to apply for

Investment Tax Allowance (ITA). An allowance of 60% are given on its qualifying capital

expenditure (such as factory, plant, machinery or other equipment used for the

approved project) which incurred within five years from the date on which the first

qualifying capital expenditure is incurred. This exemption would help the company save

a lot of expenditure as most of our equipment are bought over from other country such

as China. Besides, from Malaysia Industrial Development Agency (MIDA), our

companies are eligible for Pioneer Status in which the company can offset this

allowance against 70% of its statutory income for each year of assessment. Any

unutilized allowance can be carried forward to subsequent years until fully utilized. The

remaining 30% of its statutory income will be taxed at the prevailing company tax rate.

In addition, when purchasing the land, 20-50% of discount is offered by the state

government base on the plant location, size of area, number of job created and value of

purchase. Another type of incentive given is the discount on monthly electrical bills for

the first 2 years.

Table 2.1: Land Tax Capacity Index and Land Tax Effort Index, 2008.

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Figure 2.1: Location of EXZA Sdn. Bhd.

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2.3 Organization Chart

Figure 2.2 shows the organization chart of EXZA Sdn. Bhd whereas Table 2.2

displays the project team for the PPD plant.

Figure 2.2: Organization Chart.

Table 2.2: Expansion project team.

Person Position/responsibilities

Ling Lee Ying Project Manager

Nurul Hamizah binti Mohd Nasir Technology Operations Manager

Jannatul Izzati binti Rajmi Finance Manager

Nur Syuhada binti Jamil Admin & Human Resources Manager

Asraff Raezar bin Ceanry Logistics & Distribution Manager

Shareholders

CEO

General Manager

Finance Department

Finance Marketing

Human Resources Department

Production Department

QC / R&D Department

Quality Control Research and Development

Engineering Department

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2.3.1 Support Group

Figure 2.3: The support group of EXZA Sdn. Bhd.

EXZA Sdn. Bhd. has recruited two specialists as consultants of the company to

address problems and improve organization results. The two specialists are from University

Sains Malaysia. Their duty is to overlook the entire project from the actual plant design to

the process flow of the manufacture. They able to help company achieve goals through

provide information, solve problems, realise latent opportunities, diagnose and refine

problems, recommend, implement, build consensus and commitment around corrective

action, and permanently improve organisational effectiveness.

2.4 Accreditations and Compliance Licenses & Acts

2.4.1 Accreditations

Table 2.3: Accreditations.

Type Accreditation

Quality Management System ISO 9001:2008

Occupational Health and Safety

Management Systems

OHSAS 1800:2007

Environmental Management System ISO 14001:2004

Project Consultants

Prof. Dr. Azlan b. Ariffin,

Universiti Sains Malaysia

Expertise: Plastic Technology Polymer Blending and

Modification

Dr. Zuratul Ain bt. Abdul Hamid,

Universiti Sains Malaysia

Expertise: Polymeric Dio Materials

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2.4.2 Compliance Licenses & Acts

Table 2.4: Compliance Licenses & Acts.

Activity Type of license/approval Approving authority

1. Registration Of:

(a) Company /Business

(a) Certification of Incorporation of

Company

Registry of Companies

(b) Certificates of Registration

of Business

Registration of Business

Office

2. Evaluation/Study On:

(a) Environmental

Impact

Approval on Environmental

Impact Assessment Report

[for 19 categories of

prescribed activities only as

stipulated in the

Environmental Quality

(Prescribe Activities)

(Environmental Impact

Assessment) Order 1987]

Department of

Environment

(b) Site Suitability

Approval on Site Suitability

Evaluation for non- prescribed

activities

Department of

Environment

3. Preliminary Licensing

All licenses Manufacturing License

Ministry of International

Trade and Industry

(Through MIDA)

4. Purchase Of Land For Industrial Purpose:

(a) Industrial Land -

Respective State

Government/ State

Economic Development

Corporation

(SEDC)/Regional

Development Authority

5. Building

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(a) Pre-construction:

i. Pollution

Control

Written Permission To

Construction Premises That May

Discharge Effluents

Department of

Environment

ii. Customs

Facilities

Licensed

Manufacturing

Warehouse

1. Licensed Manufacturing

Warehouse Licence.

2. Excise Manufacturing Licence

Royal Customs and

Excise Department

iii. Building Plans

Approval for Building Plans (other

plans to be submitted with

application:

Key Plan

Layout Plan

Elevation Plan for front, back

and side view of building

Details on open space

Plan on septic tank/sewerage

Plan on pipe installation

Plan on land works and

infrastructure

Respective Local

(b) During Construction

i. Construction

Works

1. Notice to Start Work and Date

of Completion.

2. Temporary Permits for

Construction Works such as:

Construction of a

Contractors workshed and

store-shed;

Construction of roadside

scaffolding;

Construction

platform/structures;

Construction on fencing

along the road; and

Depositing building materials

by the road.

3. Permit to remove sand/stone

Materials

Authorities

Respective District Land

Office

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ii. Temporary

Supply of

Utilities

Approval for Temporary Supply of

Utilities to the Project Site

Tenaga Nasional Berhad

Water Supply Department

iii. On Completion

of Construction

1. Letters of Certification from

respective technical

departments

2. Certificate of Fitness

Fire Services Department

Tenaga Nasional Berhad

Telekom Malaysia Berhad

Water Supply Department

iv. Premises for

Operating

Trade/Industries

1. Premises Licence for

trade/industry.

2. Approval for Sign

Boards/Advertisement Sign

Respective Local

Authorities

Respective Local

Authorities

v. Factory

Inspection Factory Inspection Report

Department of

Occupational Safety and

Health

6. Utilities

(a) Electricity

1. Approval for electricity supply.

2. Approval for construction of

electricity sub-station

3. Approval Install Standby

Generator.

4. License to Generate, Transmit

or Distribute Energy From any

Installation.

TenagaNasionalBerhad

TenagaNasionalBerhad

Department of Electricity

Supply

Department of Electricity

Supply

(b) Water Supply Approval for water supply Waterworks Department

(c) Telecommunication Approval for telephone lines Telekom Malaysia Berhad

7. Manpower

(a) Employment of

Workers

1. Permit allowing employers to

keep Employees Register in

the Companys Headquarters

2. Registration of workers with the

Employees Provident Fund

(EPF)

3. Registration of employees with

Social Security Organisation

Labour Department

(b) Limit of Working

Hours

1. Permit to exceed the limit of

working overtime Hours

2. Permit to vary hours of works

3. Permit to allow women working

at night

Employees Provident

Fund

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(c) Industrial Hygiene

Approval for of competent person/

Hearing Protectors/Breathing

Apparatus/Sound Level Meters

/Audiometric Silent Booth

Department of

Occupational and Health

8. Machinery And Equipment

(a) Commissioning and

Operation of

Certificated Machinery

Certificate of Fitness for Certificate

Machinery

Department of

Occupational Safety and

Health

9. Pollution Control

1. Written approval for installation

of incinerator, fuel burning

equipment and chimney

2. License to occupy and operate

prescribed premises

3. Written permission to increase

production capacity of

factory/plant

Department of

Environment

10. Transportation By:

(a) Land

1. Licence for commercial

vehicles

2. Driving licence for goods

vehicle

Commercial Vehicles

Licensing Board

Road Transportation

Department

(b) Sea

1. Notification of port entry and

port clearance

2. Port conveyance permit

3. Certificate to carry dangerous

goods

Respective Port Authority,

Royal Customs and

Exercise Department

11. Import And Export

(a) Import of Prohibited

Goods

Import licence for goods specified

in Customs (Prohibited of Imports)

Order 1988


Trade and Industry and

other Ministries,

Departments or Statutory

Bodies appointed by the

Director General of

Customs

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(b) Export of

Prohibited Goods

Export Licence for goods specified

in Customs (Prohibition of Exports)

Order 1988


Trade and Industry and

other Ministries,

Departments or Statutory

Bodies appointed by the

Director General of

Customs

12. Market

Sales Tax Licence

Royal Customs and

Exercise Department

13. Intellectual/Industrial Property And Consumer Protection

(a) Patent Certificate for Grant of a Patent

Ministry of Domestic

Trade and Consumer

Affairs

(b) Copyright Copyright Approval

Ministry of Domestic

Trade and Consumer

Affairs

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3.0 PRODUCT SPECIFICATIONS

Pour point depressant (PPD)

Our company excels in manufacturing EVA-based PPD for many years. The PPD

produced are of dispersion type and based on ethylene vinyl acetate (EVA) copolymer of

specific range of vinyl acetate content. Below is the technical specification of the PPD

produce by EXZA Company.

Table 3.1: Characteristic of PPD produced by EXZA Company

Product name EXZA 28

Appearance and color Pale yellow liquid

Physical state Aqueous dispersion

Flash point (ASTM D92) >45oC

Pour point (ASTM D97)

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4.0 FEEDING MATERIAL

4.1 Formulation

Table 4.1: Formulation of PPD.

Materials Percentage (wt%)

Polymer resin EVA 30

Dispersing agent Sodium oleate 3

Solvent 2-Ethylhexanol 40

Stabilizing agent Ethoxylated Nonylphenol 2

Antifreezing agent Ethylene Glycol 25

Medium Water

4.1.1 Polymer Ethylene Vinyl Acetate (EVA)

Figure 4.1: The structure of EVA copolymer

EVA is a copolymer of ethylene and vinyl acetate. The two key parameters that

determine their properties are weight percent vinyl acetate in the copolymer and melt index

(MI). As more vinyl acetate (VA) is added to the polymer, it disrupts the polyethylene

crystallinity, which in turn lowers the melting point, modulus, and hardness. The VA makes

the polymer more polar, which improves adhesion to polar substrates and aids in solubility.

In the case of application of EVA as pour point depressant of crude oil, a specific

value of VA content and melt index are required in order to increase its efficiency during the

injection. Table 4.2 shows the characteristic of EVA used in the formulation of PPD

aqueous dispersion in EXZA Company.

The EVA copolymer resins used in manufacturing of aqueous PPD dispersion in

EXZA Company comes in the form of small, free flowing pellets. At ambient temperature,

the EVA resins are quite inert, and resistant to attack by most aqueous acids and bases.

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The EVA resins used have a maximum handling temperature of 230oC. If exposed

to elevated temperature, EVA resin may undergo thermal degradation; in which it will

release fumes consist of possible decomposition product such as acetic acid, carbon

monoxide and acrolein which are highly toxicant. However, in the case of the processing

temperature applied during the manufacturing process which is of range 150 to 160oC

we believe this hazardous condition can be easily avoided.

Table 4.2: Properties of EVA used in EXZAs PPD formulation.

Ethylene vinyl acetate copolymer (EVA)

Vinyl acetate (VA) content 26 32%

Melt Index (ASTM D1238, 190oC/2.16 kg) 5 150 g/10 min

Mol. Weight 1000 - 2900

Melting point (DSC) 63 74oC

Density 0.948 0.957 g/cm3

Max. processing temperature 230oC

Recommended dosage 30 55 wt.%

4.1.2 Solvent 2 ethylhexanol

Figure 4.2: The structure of 2 ethylhexanol

2-ethylhexanol is an eight-carbon branched chain O-X-O alcohol having a high

boiling point and slow evaporation rate. It is a versatile solvent featuring excellent reactivity

as a chemical intermediate. It has low water miscibility and appears as colorless liquid -

functions as solvent in order to aid the melting process of EVA copolymer resins during the

manufacture of aqueous PPD dispersion. It also acts as the main dispersing medium which

will later diluted by the addition of water in order to reduce the overall cost of PPD

produced.

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Table 4.3: Properties of solvent used in EXZAs PPD formulation.

2-ethylhexanol

Appearance Colorless liquid

Boiling point 182 186oC

Melting point -76oC

Specific gravity (at 20oC) 0.83

Max. handling temperature 367oC

Recommended dosage 30 65 wt.%

2-ethylhexanol is immiscible (disperse) to EVA. This property will lead to a better

cold flow dispersion emulsion where the PPD is suspended as micrometer sized solid

particles in an aqueous-based alcohol (OH) carrier fluid; whereby it is suit to be applied at

temperature of -20 to -40C. Besides, this solvent was found suitable to be use in our PPD

formulation due to its higher boiling point that easily surpasses the processing temperature.

This will ensure the solvent can maintain its liquid state during the processing.

4.1.3 Dispersing agent Sodium Oleate

Figure 4.3: The structure of Sodium Oleate

Sodium oleate is the sodium salt of oleic acid, a monounsaturated fatty acid used as

anionic surfactant and emulsifier inside the PPD manufacturing process. It is mainly used

as agent to disperse the non-soluble ingredients inside the medium of the aqueous PPD

dispersion. As such, there are some requirements needed in order to achieve its maximum

effect, as listed in Table 4.4 below.

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Table 4.4: Properties of dispersing agent used in EXZAs PPD formulation.

Sodium Oleate

Appearance White to yellowish

Melting point 232 235oC

Specific gravity (at 20oC) >1.1

Recommended dosage

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4.1.5 Stabilizing agent Ethoxylated Nonylphenol

Ethoxylated Nonylphenol is a non-ionic surfactant used as stabilizing agent inside

the aqueous PPD dispersion manufactured by EXZA Company. It functions as agent to

stabilize the whole dispersion system of the product across a broad spectrum of conditions.

It also provides shear stability protection to allow the product to be transferred via a number

of different pumping systems, as well as maintain its stability during transportation period.

Table 4.6: Properties of stabilizing agent used in EXZAs PPD formulation.

Ethoxylated Nonylphenol

Appearance Pale yellow liquid

HLB 8.9

EO content (mol) 4

Pour point -28oC

Flash point (ASTM D93, CC) 238oC

Density (20oC) 1.027 g/ml

Recommended dosage

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In EXZA Company aqueous PPD dispersion formulation, water is used as

secondary medium of dispersion, due to the purpose of diluting the main dispersing

medium; 2-ethylhexanol. This step is essential in order to reduce material cost and

consumption, as well as to reduce the toxicity of the product produced.

4.2 Material shelf life and quality assurance

EXZA Company concerned about quality. Thus, the shelf life and quality of each raw

material received by our supplier was strictly taken into account. Table 4.7 shows the

durable time and proper storage handling for each raw material. This information is

important in order to keep tab on our feeding material supply and helps estimate the

production capability during peak time.

Table 4.7: the durable time and storage handling for each raw material

Material Shelf life

(months) Storage handling

EVA 24

Temperature : 21 - 32oC

Condition: 50% relative humidity, out of direct

sunlight

Remarks: Avoid contamination at all cost

Sodium Oleate 6-12

Temperature: -20C (Store under inert gas)

Condition: Dry and well-ventilated

Remarks: Air and light sensitive

2 Ethylhexanol 60

Temperature: 21 - 25oC

Condition: Dry, cool, and well ventilated place

Remarks: Keep away from source of ignition

Ethoxylated

Nonylphenol 60

Temperature: < 40C

Condition: Avoid contact with acids and bases

Remarks: High irritation upon contact

Ethylene

Glycol 18-19

Temperature: < 40C

Condition: Well-ventilated, away from sunlight

Remarks: Keep away from source of ignition

Avoid contamination at all cost

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Upon the arrival of raw material in the facility, few tests need to be run in order to

ensure we received the right material according to the requirement listed for processing.

This step is important in order to avoid faults and contamination during the storage and

processing period, as well as it serves as proves in case if any misunderstanding happens

with the contracted supplier. Table 4.8 listed the necessary test need to be run during QA

analysis of the raw materials.

Table 4.8: Test aspects and method for QA analysis

Material Aspects Testing method

EVA VA content FTIR

Melt Index ASTM D1238 (190oC/2.16 kg)

Sodium Oleate Purity Gas Chromatography

2 Ethylhexanol Purity Gas Chromatography

Ethoxylated

Nonylphenol

Purity Gas Chromatography

EO content ASTM D2959-95

Ethylene Glycol Purity Gas Chromatography

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4.3 Material costing and suppliers

There are few suppliers of materials that EXZA has list out. The selected suppliers

were shown and bolded in Table 4.9. The criteria during selecting suppliers are mainly

based on price offered while keeping tab on the quality at our acceptable range. The other

companies listed serves as back up if problem arises with the current suppliers.

Table 4.9: Suppliers list and cost of materials

Materials Suppliers

EVA (32)

Polytechnology & Net

Gbmh

USD1700-2500

Lanzhou Qianmiaonuo

Trading Co., Ltd

USD2100-4000

Usi Corporation

USD2200-4000

EVA (28)

Dalian Bona Biological

Co., Ltd

USD800-2000

Usi Corporation

USD800-2500

Xinji City Changxing

Plastic Machine Factory

USD900-3400

EVA (26)

Xingtai City Litang

Commercial & Trading

Co., Ltd

USD700-2250

Quanzhou Donging

Material Co., Ltd

USD800-2600

Dalian Bona Biological

Technology Co., Ltd

USD1400-1700

Sodium Oleate

Shanghai Yuanye

Biological Technology

Co., Ltd

USD23

Shanghai Macklin Co.,

Ltd

USD57

Shanghai Taitan

Technology Co., Ltd

USD79

2 Ethylhexanol

Beijing Huamaoyuan

Fragrance Flavor Co.,

Ltd

USD1-9 (kg)

Zheng Zhou Yi Bang

Industry Co., Ltd

USD1-4.5 (kg)

Haihang Industry Co.,

Ltd

USD1-10 (kg)

Ethoxylated

Nonylphenol

Shijiazhuang City

Horizon Chemical

Industry Co., Ltd

USD1500-2000

Jilin Zhongxin

Chemical Group Co.,

Ltd

USD1800-2100

Sterling Auxiliaries Pvt.

Ltd.

USD2000-2400

Ethylene glycol

Hebei Eminent

Chemical Technology

Co., Ltd

USD600-750

Shijiazhoung Yibell

Technology Co., Ltd

USD900

Lanzhou Qianmiaonuo

Trading Co., Ltd

USD1000-1500

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5.0 PROCESSING SYSTEM

5.1 Process description

Figure 5.1 shows the process flow diagram of the production of EVA-based PPD.

The process incorporate in this facility is a new technology of mixing, namely 2 step

process mixing. This technology shortens the mixing time by opting out melt kneading

process; in which usually used in order to prepare any type of dispersion.

The process of preparing the EVA-based PPD dispersion begins by melting the

copolymer of EVA inside the mixing vessel, aided by using 2-ethylhexanol as the main

solvent. This process is carried out at elevated temperature suitable with the standard

melting point of EVA copolymer used.

Upon the completion of melting process, the temperature of process is brought

down to 70oC in order to avoid any ignition during the addition of dispersing and stabilizing.

After another several minutes of mixing, a mixture of ethylene glycol and water of specific

ratio are added inside the vessel, and the mixing process continues until it achieves

homogenization. Note that the mixture of ethylene glycol and water was mixed beforehand,

and added inside the mixing vessel as soon as the heating system is turned off.

When the PPD dispersion inside the mixing vessel achieves desired

homogenization, it is then transported to the PPD storage tank according to the respective

grade produced. During this transportation process, the mixture will pass through an in-line

mixer for particle size reduction purposes. This is to increase the effective rate of the PPD

produced and keep the dispersion stable for longer storage duration.

During the entire process operation, a suitable heating and cooling system are used.

Proper safety system is being implemented in order to constantly monitor the hazard and

risk present during the process. Cleaning and maintenance are carried with strict schedule

in order to contain and avoid any risk of accident occurring inside the facility. Waste

treatment system is also incorporated inside the plant in order to maintain a pollution-free

environment.

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Figure 5.1: Process flow diagram of PPD production (by batch)

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Figure 5.2: Generated 3D layout of major unit operations

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5.2 Standard operation procedure

The mass flow rate of each component is set according to Table 5.1 as well as the pre-

determined temperature for the mixing process. Next, the procedures of operations are as

follows:

1. The addition of solvent into the mixing vessel by releasing the valve incorporated

inside the pipeline. On the same time, switch on the vacuum conveyer in polymer

feeding system.

2. The heater is switch on at 10oC/min heating rate. On the case of desired loading

and melting temperature of 150oC is achieved, the mixer was then turned on and

the melting process occurs for 1 hour.

3. Upon approaching the end of melting process, the temperature is renewing to 70oC

at cooling rate of -10oC/min. After approximately 10 minutes, both dispersing and

stabilizing agent are added into the mixing vessel by releasing the valve

incorporated inside the pipeline and mixing process continues for another 15

minutes.

4. At the same time of the start of cooling process, the pre-mixing process of EG and

water will occur in different vessel. Both component are added inside the vessel by

releasing the valve incorporated inside the pipeline at the given flow rate (refer

Table 1). The mixing temperature inside this vessel is set to follow the standard

room temperature (according to country climate).

5. After approximately 30 minutes since the start of cooling process, the EG and water

mixture is added inside the main mixing vessel and the mixing process continues for

another 20 minutes. Note: The heater is turned off at this point allowing the mixture

to cool down to room temperature.

6. The mixer is then turn off and the valve is open to allow PPD transportation into

storage tanks. During this step, the product will pass through the in-line mixer

incorporated along the pipeline system for particle size reduction purposes.

7. The PPD mixture that passed the QC inspection will later be stored inside the

storage tank before proceed to packaging line.

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Table 5.1: Mass flow rate initiated for optimum production of 3000 kg of EXZA 28

Materials Pathway Mass

(kg)

Mass

flow rate

(kg/min)

Time (minutes)

Addition Mixing

EVA

Addition from

storage tank to

main mixing vessel

900 60

15 60

2-ethylhexanol 1200 80

Sodium Oleate 90 18

5 15 Ethoxylated

Nonylphenol 60 12

Ethylene Glycol Addition from

storage tank to pre-

mixing

375 37.5

10 20

Water 375 37.5

EG + Water

(1:1)

Addition from

storage tank to

main mixing vessel

750 75 10 20

PPD

Pumping out from

main mixing vessel

to storage tank

3000 100 30

5.3 Process cycle

Figure 5.3: The process cycle for optimum production of PPD

Manufacturing of PPD dispersion in this company can achieve up to 36 tons per day

in an optimum runs. The production capability of our company ranging from 2-4 tons/cycle;

6 cycles/day and runs in two separate production lines. EXZA Company operates on

weekly basis of 5 days operations and 2 days off for maintenance and inspection purposes.

Upon receiving a large number of demands, the production capability can be

increased up to 48 tons/day without affecting the efficiency of the process.

3 hours

(3 tons production)

1 hour

(Cleaning)

3 hours

(3 tons production)

1 hour

(Cleaning)

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Figure 5.4: The allocated time duration for each processing step

5.4 Waste treatment

In terms of waste, the production of EVA-based PPD dispersion is expected to

produce zero chemical by-products. However, in case of accidental or damage product, the

disposal of the said PPD should be strictly taken care of.

In terms of contamination or leaking, the product must be disposed or incinerated in

accordance with local regulations. Disposal of said PPD are usually handle by licensed

waste disposal contractor due to its non-recyclable nature and toxicity upon contact.

Next, although the heat release during process cant be count as waste, it still

counts as by-products. These heat generated are used for energy recovery system in order

to minimized the cost used to power up the whole facility.

Due to extensive usage of water inside the PPD manufacturing process, EXZA had

developed an additional system for water waste treatment. In this part of the plant, waste

water is collected and transferred into multiple condensers in order to separate the waste

substances from it. This treated water is then can either be reused for other purposes or

released out of the plant through the drainage system.

Addition of EVA & solvent

(15 mins)

Heating to 150oC

(15 mins)

Melting process

(60 mins)

Cooling to 70oC

(10 mins)

Addition of stabilizing & dispersing agent

(5 mins)

Mixing

(15 mins)

Addition of EG & water

(10 mins)

Mixing

(20 mins)

Transport to storage

(30 mins)

Total duration per cycle = 180 minutes / 3 hours

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6.0 Processing equipment and sizing

According to the process flow diagram (PFD) in the Figure 5.1 above, it shows the

equipment needed in order to complete the process of the PPD. This report intends to deal

with specific information of continuous PPD manufacturing process and a production unit to

produce optimum 36 tons per day by 2 production line of PPD product. In order to produce

the PPD product, the equipment is classified into unit operations that consist of important

equipment.

1. The storage tanks of the feeding material and PPD product

2. The mixing vessel unit

3. The In-line mixer unit

4. The piping system

6.1 The storage of the feeding materials and PPD product

All raw materials are brought on site and stored in warehouse then transfer to the

storage tank. Storage tanks used in PPD manufacturing process normally is stainless steel

and carbon steel material. This is to prevent the raw material has chemical reaction with the

storage tanks which will affect the properties of the final product. The storage tank that

been use are actually consist of several type, this is due to the type material that been

stored in the storage tank (refer Figure 5.1). The storage tanks of the raw material consist

of 6 type of storage tank which is:

A. The polymer (EVA) silo storage tank

B. The solvent storage tank

C. The dispersing agent storage tank

D. The stabilizing agent storage tank

E. The anti-freezing storage tank

F. The PPD storage tank

In order to solve the problem of flow rate of the EVA feeding process, the

gravitational system is used due to its efficiency and superior economical aspect. Thus,

below are the properties of all the storage tank that been used during the manufacturing of

the PPD product. All of the storage tank for liquid form of the raw materials such as the

solvent, dispersing agent, stabilizing agent and anti-freezing agent are been stored in the

same type of storage tank but in different of size and the capacity of the tank.

29

A. EVA silo storage tank

Figure 6.1 shows the EVA storage tank used for the PPD manufacturing. The

storage tank use to store EVA is named as silo tank; which is suitable for storing bulk

materials. Silo tank used in PPD manufacturing are made from stainless steel to prevent

chemical reaction occur during storage time. Table 6.01 shows the specification of the silo

tank. Silo tank actually been closed at the top of the tank, this is because the safety

precaution that must be follow in order to avoid contamination and any problem occurs

during the manufacturing. EVA is in the solid form of material and cannot be expose to

direct sunlight as it may reduce its properties and may produce hazard.

Figure 6.1: EVA Silo tank

Loading EVA into silo tank can be carried out by the drivers themselves with

automatic loading end when the nominal value is reached. This can be seen from Figure 6;

whereby the EVA is transport from the warehouse by lorry and pumped into the silo tank.

Silo tank will be place at 45o above the mixing tank in order to transfer the EVA into

the mixing tank. This is to solve the difficulties faced during the feeding of the EVA which

comes in solid form; by using gravitational system of silo tank so that the flow rate of EVA is

mainly aided by gravity. This method contributed to reduction of cost of overall polymer feed

system due to lesser energy consumption and accurate control system.

30

Figure 6.2: Silo tank of the EVA feeding system.

Table 6.01: The specification of EVA Silo tank

Equipment name: Silo Tank

Identification:

Item No

Supplier

Price

M101

Taian Luqiang Metal Vessel Co., Ltd.

US $ 10000

Function: Structure for storing bulk materials Design Data:

Orientation Vertical

Tank Height 3.92m

Tank Diameter 2.61m

Material Construction Stainless Steel 316L

Conveyor Materials Galvanized sheet metals

Dimension 120cm X 75cm X 120cm

31

B. The solvent storage tank

Figure 6.3 shows the storage tank for solvent. Solvent used to produce PPD is 2-

ethylhexanol. Table 6.02 shows the specification of the solvent storage tank.

Figure 6.3: Solvent storage tank

Table 6.02: The specification of solvent storage tank

Equipment Name : Solvent storage tank

Identification:

Item No

Supplier

Price

T 101


US $ 10000

Function: To store solvent

Design Data:


Functional Height 4.63 m

Recommended Diameter 3.09 m

Designated Volume

Maximum Storage Volume

34.66 m3

28.88 m3

Designated Pressure

Designated Shell Thickness

0.196 N/mm2

1.74 mm

Material of Construction Carbon Steel A516 Grade 70

Tolerances

Standard

Rules of thumb

API 650

32

C. Dispersing agent storage tank

Dispersing agent used to produce PPD is sodium oleate. Storage tank for sodium

oleate is made from carbon steel which same as solvent storage tank showed in Figure 6.3

but the size of storage tank is different. Table 6.03 shows the specification of the solvent

storage tank.

Table 6.03: The specification of the dispersing agent storage tank.

Equipment name : Dispersing agent storage tank

Identification:

Item No:

Supplier:

Price:

T102

Guangdang Dafang Weiye Steel Structure

Engineering Co., Ltd.

.US $ 6000

Function: To store Dispersing agent

Design Data:




Designated Volume


1.19 m3

0.99 m3

Designated Pressure


0.169 N/mm2

0.49 mm

Material of Construction Carbon steel A516 gr 70

Tolerances

Standard

Rules of thumb

API 650

33

D. The stabilizing agent storage tank

Stabilizing agent used to produce PPD is ethoxylated nonylphenol. Storage tank for

ethoxylated nonylphenol is made from carbon steel which same as solvent and dispersing

agent storage tank showed in Figure 6.3 but the size of storage tank is different. Table 6.04

shows the specification of the stabilizing agent storage tank.

Table 6.04: The specification of the stabilizing agent storage tank.

Equipment name : Stabilizing agent storage tank

Identification:

Item No: T103

Supplier: Guangdang Dafang Weiye Steel Structure

Engineering Co., Ltd.

Price: US $ 6000

Function: To store stabilizing agent

Design Data:




Designated Volume


0.99 m3

0.83 m3

Designated Pressure


0.17 N/mm2

0.46 mm


Tolerances

Standard

Rules of thumb

API 650

34

E. Anti-freezing storage tank

Anti-freezing agent used to produce PPD is ethylene glycol. Storage tank for

ethylene glycol is made from carbon steel which same as solvent, dispersing agent,

stabilizing agent storage tank which showed in Figure 6.3 but the size of storage tank is

different. Table 6.05 shows the specification of the anti-freezing agent storage tank.

Table 6.05: The specification of the anti-freezing agent storage tank.

Equipment Name: Anti-freezing Storage Tank

Identification:

Item No

Supplier:

Price:

T104


US $ 6000

Function: To store anti-freezing agent

Design Data:


Fluid Ethylene glycol



Designated Volume


29.53 m3

24.61 m3

Designated Pressure


0.211 N/mm2

1.77 mm


Tolerances

Standard

Rules of thumb

API 650

35

F. PPD storage tank

In the finishing process, PPD is been stored in the PPD storage tank which showed

in Figure 6.4. Table 6.06 is the specification of storage tank of PPD product.

Figure 6.4: The storage tank of the PPD product

Table 6.06: Specification of storage tank of PPD product

Equipment name: Pour Point Depressant storage tank

Identification:

Item No:

Supplier:

Price:

T105


US $ 15000

Function: To store pour point depressant

Design Data:




Designated Volume


109.09 m3

90.91 m3

Designated Pressure


0.234 N/mm2

3.66 mm

Material of Construction Stainless Steel 304 L

Tolerances

Standard

Rules of thumb

API 650

36

6.2 The mixing vessel unit

During the manufacturing of PPD, homogenizing vessel is used in order to melt the

EVA and mixed the entire ingredient needed to form the product. Thus, several type of the

mixing vessel has been selected and went through the preliminary process in order to

determine which one is suitable for our process.

EXZA Company had chosen mixing vessel produced by Foshan JCT Machinery

Co., Ltd. This is because the specification and the quality of the vessel are on par with our

requirement as its price is also cheaper compared to the others.

Furthermore, the mixing process need to be done in certain temperature and

pressure; which we found that this type of homogenizing vessel is easy to deal with the

temperature problem and control. Below are the picture of the mixing vessel that been

choose in order to mix the ingredient and to manufactured our PPD product.

Figure 6.5: Homogenizing vessel

Referring to the Figure 6.5, the mixing tank is of simple design and consists of rotor

which comes in layer. This plays an important role in mixing in order to achieve the best

quality of our product. Below are the properties and the specification of the mixing vessel

that has been chosen by our company.

37

Table 6.07: Specification of mixing vessel

Equipment name: Homogenizing vessel

Identification:

Item No:

Supplier:

Price:

R101

Foshan JCT Machinery Co., Ltd.

US $ 13500

Function: To mix all reactants to produce pour point depressant

Operation: Batch

Design Data:


Fluid PPD material

Functional Height

Height of Cylinder

Height of Torispherical Head

Recommended Diameter

2.47 m

0.99m

0.74 m

1.65m

Vessel Volume

Designated Vessel Volume

Designated Pressure


Operating Temperature

Number of Impeller

Type of Impeller

Size of Impeller

Impeller Location

Material of Construction

4 m3

4.8 m3

3000 psi

0.17 m

150 -160oC

1

Rotor/Stator

Diameter (0.41 m) and Width (0.21 m)

0.41 m liquid level off the bottom of vessel

Stainless Steel 304 H

Utilities Cooling Jacket is used to surround the vessel

Tolerance

Standard

Rules of thumb

ASTM/ASME: UNS S30409

38

6.3 In-line mixer

During manufacturing of PPD, the size particle of PPD during mixing process inside

the homogenizing vessel is big. This is because the solvent and the EVA does not yet

completely dispersed, thus the reduction of the particle is needed in order to reduce of the

particle size of the EVA and other material. This reduction in particle size also important in

order to make sure the stability of our product is in the good condition.

To reduce the particle size, In-line mixer is used in order to get more nano-particle

of our final PPD product and save time. High Shear In-Line mixers are supremely efficient

and rapid in operation and are capable of reducing mixing times by up to 90%.

The high-speed rotation of the rotor blades within the precision-machined mixing

workhead exerts a powerful suction, drawing liquid and solid materials into the rotor/stator

assembly. Centrifugal force then drives the materials towards the periphery of the workhead

where they are subjected to a milling action in the precision-machined clearance between

the ends of the rotor blades and the inner wall of the stator.

This is followed by intense hydraulic shear as the materials are forced, at high

velocity, out through the perforations in the stator, then through the machine outlet and

along the pipework. At the same time, fresh materials are continually drawn into the

workhead, maintaining the mixing and pumping cycle. Figure 6.6 shows the In-line mixer

used.

Figure 6.6: In-line mixer

There are many type of In-line mixer in the market nowadays. However the In-line

mixer produced by Silverson has been selected by our company. Below is the specification

of the In-line mixer used by EXZA Company.

39

Table 6.08: Specification of In-line mixer

Equipment name: In-line mixer

Identification:

Item No:

Supplier:

Price:

R102

Silverson

US $ 25000

Function: To reduce the size of PPD.

Design Data:

Orientation

Pressure

Mass Flow rate

Interaction Chamber Material

Plunger Material

Enclosure

Drive Method

Product Pressure Gage

Tolerances

Standard

Vertical

30000psi

1714.29kg/h

Diamond

Zirconia Ceramic

Stainless Steel

Electric

Mechanical

Rules of thumb

M700

40

6.4 Piping system

There are 2 types of pipes used in the manufacturing PPD product which are

stainless steel pipe and carbon steel pipe. Table 6.09 shows the quantity of pipe use, price

and the supplier. Table 6.10 shows the different type pipe used in different storage tank.

Table 6.09: Quantity of pipe use in PPD plant

Type of Pipe Quantity Price

(m/USD) Company

Carbon Steel 57m 9 Tianjin Wanlei Steel Pipe Co., Ltd.

Stainless Steel 62m 12.84 Wuxi Shengshida Special Steel Co., Ltd.

Table 6.10: Type of pipe used in different material storage tank and cost

Material Type Of Pipe Pipe Length (m) Pipe Cost

(USD)

2-Ethylhexanol Carbon Steel 12 108

Sodium oleate Carbon Steel 13 117

Ethoxylated Nonylphenol Carbon Steel 15 135

Ethylene Glycol + Water Carbon Steel 17 153

EVA Stainless Steel 15 192.6

PPD Stainless Steel 15 192.6

Cooling and Heating System Stainless Steel 32 410.88

Total pipe cost (USD) 1309.08

In the piping system, there are equipment incorporated which plays an important

role in transporting and controlling the material flow centrifugal pump and valve.

Centrifugal pump help to pump the raw material of PPD from storage tank of feeding

material to the mixing vessel and later, towards the storage tank of PPD by pressure. The

valve is to control the amount of the feeding material allowed to flow inside the pipeline.

Table 6.11 shows the specification of centrifugal pump.

41

Table 6.11: specification of centrifugal pump

Equipment Specification

Centrifugal pump:

Figure 6.7 : Centrifugal pump

Required no. = 7 unit

Design Data:

Operation : batch

Type : centrifugal

Operating Temperature: 33oC

Density : 813.60 kg/m3 Mass Flow rate : 360 kg/h Volumetric Flow rate : 0.65 m3/h Efficiency : 65 % Price: US $ 6000

Valves are a mechanical device that controls the flow and pressure within a system

or process. They are essential components of a piping system that conveys liquids, gases,

vapours, slurries etc. The function of valve are stopping and starting flow, reduce or

increase a flow, controlling the direction of flow, regulating a flow or process pressure and

relieve a pipe system of a certain pressure. Figure 6.8 and 6.9 show the butterfly and globe

valve. Table 6.12 shows the valve used in PPD plant.

Figure 6.8: Globe valve Figure 6.9: Butterfly valve

42

Table 6.12: Type of valve used in PPD plant.

Materials Valve Type Mass Flow

rate (kg/min)

Mol. Fraction, mol

Price (US $)

EVA Butterfly 60 0.25 200

1-Hexanol Butterfly 80 0.61 187

Sodium oleate Butterfly 18 0.01 148

Ethoxulated

nonylphenol Butterfly 12 0.01 148

Ethylene glycol Globe 37.5 0.61 126

Water Globe 37.5 - 126

43

7.0 SAFETY SYSTEM

All manufacturing processes are to some extent hazardous, but in chemical

processes there are additional, special, hazards associated with the chemicals used and

the process conditions. Thus being said, any organization should have a legal and moral

obligation to safeguard the health and welfare of its employees and the general public.

Loss prevention is an insurance term, the loss being the financial loss caused by an

accident. This loss will be not only the cost of replacing the damaged plant, paying fines,

and settling third-party claims, but also the loss of earnings from lost production and lost

sales opportunities.

In the event of a major incident, such costs can be large enough to overwhelm a

company. Thus, safety system is implemented inside the facility in order to avoid such

losses, and reduced the said risks to acceptable levels.

7.1 Instrumentation and Control Systems (I&C systems)

In EXZA plant, I&C systems is used for safety purposes. I&C systems incorporated

inside the facility are developed based on the data collected during hazard and operability

studies (HAZOP) carried out in the process design stage.

They are accomplished, as appropriate, using the structures, systems and

components provided to mitigate the consequences of accident conditions. I&C system

does not only focused on monitoring the safety of plant operation, it also gives control on

the production rate and cost, as well as provides information on overall energy consumption

of the facility.

However, I&C system is mainly developed to give accurate control on the equipment

present in the facility. Ultimately, process control and monitoring are closely related to

safety, in which I&C system helps;

To keep the process variables within known safe operating limits;

To detect dangerous situations as they develop and to provide alarms and

automatic shutdown systems;

To provide interlocks and alarms to prevent dangerous operating procedures

44

7.1.1 Types of I&C system in plant

On the basis of the identification of safety functions that are required to be carried

out, I&C systems are established to perform functions important to safety. There are some

types of instruments implemented in order to monitor and relay information in case of

accident and potentially hazardous deviations in process condition. Some of them includes;

1. Alarms system

2. Automatic trip system

3. Interlock system

7.2 Emergency Situation Procedure

Accidents could be happened regardless of time and place. It is classified in

emergency situation which consider as out of control. Therefore it is a need to list the

emergency procedure guideline that is used in EXZA plant.

General Procedure

Some of the procedures that must be taken when the emergency situation happened in the

plant are:

i. Do not panic and stay alert.

ii. Assess the situation around your area.

iii. Wait for instructions from supervisor or shift manager.

Fire/Explosion/natural Disaster

This procedure should be taken for fire, explosion or natural disaster are the same. The

basic procedures for the above situation are:

i. Raise the alarm.

ii. Immediately inform the supervisor or shift manager.

iii. Assess the situation.

iv. Wait and follow the instruction from them.

45

Hazardous Substance Discharge

If any hazardous substance discharge incident occurred, without taking any unnecessary

personal risk, the following procedure had to be followed:

i. Immediately inform the supervisor or shift manager

ii. Minimize substance discharge

iii. Identify substance and act accordingly

iv. Neutralize the substance discharge

v. Wait for the instructions from supervisor or shift manager

Table 7.1: Types of hazardous

Types of hazard/

exposure

Acute hazards/ symptoms

Prevention First aid/ fire fighting

Fire Combustible. NO open flames. Alcohol-resistant foam,

dry powder, carbon dioxide.

Explosion Above 63C explosive

vapour/air mixtures may be formed.

Above 63C use a closed system,

ventilation.

In case of fire: keep drums, etc., cool by spraying with water.

Table 7.2: Safety precaution

Exposure Acute hazards/

symptoms Prevention First aid/ fire fighting

Inhalation Cough / sore

throat.

Ventilation, local exhaust, or breathing

protection. Fresh air, rest.

Skin Dry skin. Protective gloves, wear

protective work clothing.

Rinse and then wash skin with water and soap.

Eyes Redness, Pain. Safety goggles.

First rinse with plenty of water for several minutes (remove

contact lenses if easily possible), then take to a doctor.

Ingestion Burning

sensation. Do not eat, drink, or smoke during work.

Rinse mouth. Give one or two glasses of water to drink. Do

NOT induce vomiting.

46

8.0 ECONOMIC POTENTIAL

8.1 Total Capital Investment

We have divided the total capital investments into 2 parts in the early stages of plant

design, which are fixed capital investment and working capital investment. The fixed capital

investment is investment in fixed capital or to the replacement of depreciated fixed capital.

Thus, fixed capital investment is investment in physical assets which includes the cost for

machinery, land, services, vehicles and installation. The total fixed capital investment costs

Exza for about $ 2,165,288.16 which include the direct and indirect cost. The working

capital investment is 15% from the fixed capital investment.

8.2 Fixed Capital Investment

Figure 8.1: Fixed Capital Investment.

Fixed Capital

Investment

Machinery

Land

Vehcles (Truck)

Services

Installation (Equipment,

Piping, Electrical,

Safety)

47

Figure 8.2: Equipment used in our plant.

Table 8.1: Equipment required and estimated costs for 2 production line.

Instrument Cost Per Unit ($) Unit Purchase Cost ($)

Mixing Tanks 13,500.00 2 27,000.00

Silo (Polymer) 10,000.00 3 30,000.00

Solvent Storage Tank 10,000.00 1 10,000.00

Dispersing agent Tank 6,000.00 1 6,000.00

Stabilizing agent Tank 6,000.00 1 6,000.00

Antifreezing Storage Tank 6,000.00 1 6,000.00

PPD Storage Tank 15,000.00 3 45,000.00

Centrifugal Pump 6,000.00 10 60,000.00

Valve 1,335.00 2 (set) 2670.00

Heat Exchanger 10,000.00 2 10,000.00

Reboiler 10,000.00 2 10,000.00

In-line mixer 25,000.00 2 50,000.00

Piping 1,309.08 2 (set) 2618.16

Total Cost 265,288.16

Equipments

Mixing vessel In-line mixer

Pump

Storage Tank Reboiler

Heat Exchanger

Piping system

48

Table 8.2: Direct cost and indirect cost of fixed capital investments.

Direct Cost

Component cost Cost ($)

Total Equipment cost 265,288.16

Equipment Installation 250,000.00

Electrical Installation 100,000.00

Service Facilities 50,000.00

Process and auxiliary 100,000.00

Yard Improvement 100,000.00

Transportation 100,000.00

Total 965,288.16

Indirect Cost

Engineering and supervision

Construction Expenses

500,000.00

Legal Expenses 100,000.00

Contractor Fee 600,000.00

Total 1,200,000.00

Fixed Capital Investment

(Direct + Indirect Cost)

2,165,288.16

8.3 Working Capital Investment

It is including the costs necessary to operate the plant. Working capital investment is

crucial to make sure that EXZA has sufficient funds for carrying out our everyday operations

in a smooth manner. Generally, working capital investment is simply 15% of the fixed

capital investment.

Working capital investment = 0.15 x fixed capital investment

= 0.15 x $ 2,165,288.16

= $ 324,793.23

49

8.4 Material Consideration

In Exza, we produce 3 tonnes of pour point depressant (PPD) for each cycle and 18

tonnes per day by one production line. One day 6 cycle, 1 week 5 working days. 1 week

will produce 90 tonnes PPD by one production line. The entire tank for storing the material

can be filled up to 2 weeks of production of PPD. Therefore, for every two weeks of

production, the supplier will filled up the entire materials tank.

Figure 8.3: Operation cycle.

Table 8.3: Material costs for 1 production line

Material % Price per

Ton ($) Cycle ($) Day ($) Week ($) Year ($)

EVA 28% 30% 800 720 4320 21600 1123200

Ethoxylated

nonylphenol 2% 1500 90 540 2700 140400

2-ethylhexanol 40% 1000 1200 7200 36000 1872000

Sodium oleate 3% 23000 2070 12420 62100 3229200

Ethylene glycol

Water

3 : 2

25% 600 270 1620 8100 421200

Total 4350 26100 130500 6786000

Total cost of raw material to produce PPD for 2 production lines per year

= $6,786,000.00 X 2

= $13,572,000.00

3 hours

(3 tons)

1 hour (Cleaning)

3 hours

(3 tons)

1 hour (Cleaning)

3 hours

(3 tons)

1 hour (Cleaning)

Non- stop

50

8.5 Salaries Consideration

Table 8.4: Salaries of each of the workers per month.

Quantity Position Salary ($) Total ($)

1 Chief Executive Officer (CEO) 15000 15000

1 General manager 10000 10000

1

Section manager

Administration 7000 7000

1 Sales and marketing 7000 7000

1 Research and development 7000 7000

1 Operation 7000 7000

1 Human resource 7000 7000

1 Quality control 7000 7000

1 Business development 7000 7000

1 Production 7000 7000

1 Marketing 7000 7000

1 Customer service 7000 7000

Engineer

3 Senior Engineer 5000 15000

2 Process Control Engineer 2400 4800

2 Equipment/Maintenance Engineer 2400 4800

2 Quality Assurance Engineer 2400 4800

2 Safety Engineer 2400 4800

Others

1 Financial advisor 2400 2400

1 Marketing executive 1900 1900

1 Quality assurance 1900 1900

1 Quality control inspector 2300 2300

2 Supervisor 2000 4000

26 Others 900-1200 24000

Total: $ 165,700

51

8.6 Loan

EXZA hopes to obtain investment amount $ 2,000,000 from investor and obtain

$ 2,000,000 from bank. The interest rate of loan is 1.5% per annum.

Table 8.5: The conditions required by CIMB and UOB.

Commerce Investment Merchant Bank(CIMB)

United Overseas Bank (UOB)

Term up to 15 years is available Term up to 15 years is available

Medium to long term lending facility Medium to long term lending facility

Fixed monthly repayment over loan tenure. Flexible repayment over the loan tenure

Interest rate pegged to the banks Base Lending Rate (BLR) Malaysian-owned

company Daily rest interest

- Fast turnaround for approvals

- Early drawdown of up to 50% of loan facility

Private Limited Companies. Private Limited Companies

After considering all the terms and conditions required by both of the bank, we

decided to choose UOB as it provides a better efficiency in withdrawing the loan. Besides,

the repayment is flexible over the loan tenure. EXZA targets to pay the loan quicker so that

the loan is expected to completely pay back within 10 years instead of 15 years.

UOB also provides lower interest rate as daily rest interest rate is an advantage due

to calculation based on the previous days outstanding balance. Thus, if we make

outstanding payment in the middle of the month, it will reduce the loan interest at the next

day.

52

8.6.1 Loan Agreement Details

Figure 8.4: Loan payment details.

Table 8.6: Sources of capital.

Source Amount ($)

Capital 2,000,000

Bank Loan 2,000,000

Investors 2,000,000

8.7 Sales of PPD per year

In one year EXZA Company is capable of producing 9360 tons of PPD by 2

production lines. Estimated 60% of total PPD produced were sold to contracted company.

The total income is shown below:

Table 8.7: Income of sales 60% PPD produced

PPD Price per ton ($) Income ($)

EXZA 28 4500 25,272,000.00

LOAN DATE : 1ST OF JUNE 2015

MATURE DATE : 1ST OF JUNE 2024

INTEREST RATE : 1.5% OF THE LAST PRINCIPAL BALANCE

PAYMENT : 10% YEARLY + INTEREST RATE AFTER THE MATURE DATE

53

8.8 Estimated Total Budget

Figure 8.5: Estimated expenses.

Table 8.8: Early Budget

Aspect Cost , $

Capital 2,000,000.00

Bank 2,000,000.00

Investor 2,000,000.00

Total Capital 6, 000,000.00

(-)

Equipments 2,165,288.16

Land 1,230,147.41

Building 2,000,000.00

Remaining Balance 604,564.43

Equipments and Transportation,

31.69%

Land, 32.11% Materials, 3.38%

Human Resources Expenses,

19.38%

Maintanence and Loan Payment,

7.59%

Others, 5.85%

54

Table 8.9: Expected total net profit for first year

Estimated Total Budget US ($)

Sales 25,272,000.00

Remaining Balance 604,564.43

Total Budget 25,876,564.43

(-) Estimated Total Expenses US ($)

Materials 13,572,000.00

Loan 163,333.00

Salary ( Include bonus) 1,988,400.00

EPF & SOCSO 596,520.00

Insurance 500,000,00

Bills ( water, electrical) 1,200,000.00

Packaging 300,000.00

Shipping 800,000.00

Maintenance 500,000.00

Others 1,000,000.00

Total Expenses 20,120,253.00

Total Profit 5,756,311.43

Expected Profit after Tax (10% income tax) 5,180,680.29

Repayment (Investor 5%) 259,034.01

Expected Total Net Profit 4,921,646.28

55

8.9 Projection of Paying Back

Table 8.10: Percentage of repayment

Source Percentage of Repayment (%)

Bank Loan 1.5

Investors 5

Table 8.11: Estimation of pay back amount

Year Debt Interest Debt + Interest Paid

0 2,000,000.00 0.00 0.00 0.00

1 2,000,000.00 30,000.00 2,030,000.00 163,333.00

2 1,866,667.00 28,000.005 1,894,667.01 163,333.00

3 1,731,334.01 25,970.01 1,757,304.02 163,333.00

4 1,593,971.02 23,909.57 1,617,888.58 163,333.00

5 1,454,547.58 21,818.21 1,476,365.79 163,333.00

6 1,313,032.79 19,695.49 1,332,728.29 163,333.00

7 1,169,395.29 17,540.93 1,186,936.22 163,333.00

8 1,023,603.22 15,354.05 1,038,957.26 163,333.00

9 875,624.26 13,134.36 888,758.63 163,333.00

10 725,425.63 10,881.38 736,307.01 163,333.00

11 572,974.01 8,594.61 581,568.62 163,333.00

12 418,235.62 6,273.53 424,509.16 163,333.00

13 261,176.16 3,917.64 265,093.80 163,333.00

14 101,760.80 1,526.41 103,287.21 103,287.21

56

9.0 CONCLUSION

EXZA Company is expanding the PPD plant in Perak because of low cost and

strategic place. EXZA Company is producing PPD for oils and gas industries to help the

industries solving the problem of oils transportation. PPD are lubricant additives for crude

oils which can help to prevent congelation of crude oils in pipelines during transportation

and processing equipment at low temperature. This report has the details on designing and

constructing the plant to produce EVA based PPD. This report also has shown the

expenses from constructing plant until earning profit from the selling. Moreover, EXZA

company also has do improvement on their product, so that they able to compete with other

companies. This company also has considered on the safety of employee in the plant

during the processing from storage of the ingredient to finishing product.

Date post:	16-Sep-2015
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EBP 314 - A Report on Developing a PPD Manufacturing Plant (G3)

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