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Chemical process Economics-Why Economics matter in Chemical processing.

Chemical process Economics :-

Engineers are distinguished from scientists  by their consciousness of costs and profits.Every engineering decision involved cost consideration. Engineers must continue to keep abreast of Economic changes that may affect their products.The primary objective of the engineers endeavors should be to deliver safely the best product or the most efficient service at the lowest cost to the employer and the  consuming public.




Competing process:-


  Since change is an outstanding characteristic of the chemical procedures, potential alteration of any process is of importance not only when the plant is first designed, but continuously. One of the functions of a research and devolpment (R&D) division is to keep abreast of progress and to make available knowledge of improvements or even fundamental changes leading to the making of any given product in which the organization is interested. This R&D component must keep informed regarding devolpmemts in other companies and be in a position to advise management of the relative competitive positions of actual or anticipated proceses or products. judgement based on comparative facts must be exerted in most of the important discussions of the chemical engineer.For instance, there are many technical processes for making phenol, ethanol, and acetic acid. Choosing the one from among many that is best for a particular location or time is an economic decision.Careful calculations using local parameters generally yields a clear decision.

 Material balance:-

Yields and conversions of the chemical process from the basis for the material balance, which in turn are the foundation for cost determination. When obtainable, materials and quantities from standard practice are tabulated under the flow charts.
Energy
Engineers are concerned with the direction and control of energy.This energy may be expended in the moving of raw materials by ships, trucks or pipeline; it may be employed in the form of heat of steam or elcetrcity; or it may be energy the energy given out in exothermic reactions, or that which is absorbed in endothermic chemical reactions.Enegy costs from oil,gas,coal,solar,nuclear,or electrical energy from air or water power are all constantly changing, so it is extremely difficult to make long range plans.Energy is frequently major cost in chemical plants, but it is often possible to reduce energy use by altering processing procedures, particularly by using new separation technologies.
Chemical Processing

Labor:-

Skilled operators contribute as much to a plant's success as excellence in design. Without their cooperation, no plant succeeds.The chemical process industries have moved rapidly into labor saving techniques: particularly, rapid extension of continous processing, the use of process controllers, and optimizing procedures. Labor requirements in the chemical industry are comparatively small, but many jobs require above average skills and pay above average wages

Overall cost:-


   The cost of processing cannot be finally obtained until the plant is in operation, but an experienced chemical engineer can closely estimate it. The single largest cost is usually raw material,with energy, labor, overhead, and depreciation all being significant.Most errors in cost estimation are due to an underestimate of overhead, sales, customer service, and the cost of capital required to finance the daily operation of the business.After the plant has been designed, bids can be obtained for the equipment, which will indicate the amount of the capital necessary for construction. With high interest rates and constantly rising costs, delays can be extremely expensive. Taxes may also prove to be a major factor.Table presents capital spending for new plants.

Table 2.1 Chemical industries(Chemical Processing) Capital Spending for New Plants (in billions of dollars )
 Chemical Processing
1981
1980
1978
1976
1974
1972
Chemical and allied products
13.11
12.60
8.46
8.12
6.48
3.38
Iron and steel
3.27
3.29
2.52
3.04
1.94
1.06
Non-ferrous metals
3.59
3.11
2.11
1.97
2.04
0.97
Paper
6.73
6.80
3.99
3.1
2.90
1.45
Petroleum
25.17
20.69
13.95
10.76
7.31
4.80
Rubber
2.30
1.73
2.10
1.32
1.56
1.03
Stone, clay, glass
3.90
3.82
3.10
1.88
1.64
1.33
All manufacturing
129.85
115.81
79.72
59.95
53.21
35.42


  
Chemical process Economics-Why Economics matter in Chemical processing. Chemical process Economics-Why Economics matter in Chemical processing. Reviewed by Nawab zady on June 07, 2018 Rating: 5

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