Plant Design and Economics.

UNIT-1

Introduction: General Design Considerations

. Chemical engineering design is divided into equipment design and plant design.
. Plant design is neither a unit operation or a unit process, but must be considered as
one of the tools of chemical engineering profession. It involves in the development
of a technically and economically efficient plant from the laboratory stage through the
pilot plant stage to the commercial size unit.
. Plant design not only based upon the application of accurate fundamental principles and
data but also upon the emphasis being placed on the costs as an important factor.
The role of a chemical engineer;
. The chemical engineer is one who is skilled in development, design, construction ,and
operation of industrial plants in which matter undergoes a change.
. Chemical engineer works in four main divisions of the chemical process industries;
Research and development
Design
Manufacturing, and
Sales.
Need for Plant Design:
. The main factor which dictates the decision to produce a new product or expand or modernize
present facilities is generally an economic one as represented by the question
“what will be the return on the Investment?”
. The design engineer must be in a position to supply management with preconstruction cost
estimates based on a preliminary plant design for manufacture of the product so that sound
 decision can be made.
. This plant design analysis include:
1. Process design ( For the best process for producing the product:
- Written process description,
- Notes on safety precautions,
- Knowledge of all raw materials/intermediates/products,
- Knowledge of all process temperatures, pressures, and concentrations,
- Heat, material and energy balances around all significant operations,
- A complete diagrammatic process flow sheet that shows the flow of process
streams with operating conditions )
2. Design and Selection of process equipment and materials (to find capital cost,
inventory needed)
3. Preliminary plant layout and location (to estimate labor ,building, and land costs)
4. A manufacturing cost analysis:
- Estimate manufacturing cost i.e cost of raw materials ,utilities ,cost of labor,
costs of maintenance and repairs etc.,
- Time taken to reach break- even point ,
- What will be the long term prof

Development of the project:

- Objectives of development of a chemical engineering plant project:
. Design and erection of a new plant
. Design and erection of an addition to the existing plant
. Revamping and modernizing of an existing plant.

- A C E P Project
Born - When the company executives decide, based on a study of the
recommendations and the development budget submitted by the
development group .
 First - A preliminary study is made ,then if it seems warranted a more detailed
analysis are made.
This analysis gives management enough facts to make a reliable decision
to go for the project i.e. to invest men, time and money for the execution
of the project.

M A N A G E M E N T <------------------------ DEVELOPEMENT GROUP

(Deciding authority) Sends recommendations (Has funds)
and budget within the specific
areas of the companies activities.

Evolution of a Process: Different Stages

- Different stages are:
Process research
Research evaluation for possible commercialization
Process development
Preliminary engineering studies
Pilot plant studies
Semi commercial plant, and finally
Commercial plant.
The work on first five stages can start simultaneously in order to avoid delay and
expedite work.
For successful development of a project it is necessary to organize the personnel in the
company to do various aspects of the job.

Let us see one such organization:

Activity/Department: R&D Engg. Patent Survey Marketing Construction Production.
Literature Search I/C - - - - - -
Bench scale I/C follow study info study study -
Pilot plant:
-Design Advise I/C - survey evaluate estimate -

-Constuction Advise advise - - - I/C -

-Operation I/C advise - - samples

Distribution - -
Commercial Plant:
-Design advise I/C final final market final follow
stage survey evaluation estimate

-Construction advise advise - - program I/C follow

-Operation advise advise - - advise advise I/C

I/C means In-charge.

As the project develops, it is essential to take suggestions/opinions from different groups
through conferences or by circulation of progress reports.

1. Process Reaserch:
Involves- Literature survey, bench laboratory work
Objective- To provide scientific data required for
Rational design of process.
To minimize time & equipment spent in pilot plant studies.
Data Collected- Yields, conversions, space velocity, temperature and pressure
conditions, feed compositions, heat requirements etc.
Here statistical planning of experiments is required to save time.
2. Research Evaluation:
Here what all done in process research is critically evaluated in both technical and
Economic point of view.
- Involves two stages:
1 st stage evaluation: Before any lab work is conducted based on the available
data from literature only. Ex. By comparison of raw
material and final product prices a process may be ruled out.

2nd Stage evaluation:

.Starts after the planned experimental lab work is completed.
.At this stage we have sufficient information required for making
 satisfactory material balance and also for analyzing chemical engg.
processes & operations involved in the process.
. Aim of evaluation is:
.to make economic analysis of the project
. to outline unit operations/processes.
. to check what additional info is needed to carry out rational
plant design.
The main purpose of engineering & economic evaluation is to detect as early as
possible, a process which is economically unsound and impractical.

Ex: If there are 2 or more processes for manufacture of a chemical, this stage show
which of the processes is preferred, and thus further work can be directed only
on that process.

If the evaluation show that a particular project is an interesting one, then items
contributing to the manufacturing cost are identified and suggestions/methods for
reducing them obtained.
3. Process Development:
The above evaluations identifies what other process development studies should be
conducted at laboratory and pilot plant stage, for the final rational process design.
The properties that are to be obtained are :
MW, BP, MP, Sp Gr., Cp , k,µ, T-S data, Vapor pressure data, equilibrium data etc.
4. Preliminary Engineering Studies:
- Here preliminary studies are made regarding selection of materials and equipment.
- So far in lab studies the equipment are simple and generally made of glass, but for
Commercial production the equipment would be large and operate continuously
without undue maintenance. More over the material of construction is not glass
but rather metals ceramics, glass lined steels etc.
-These studies should be directed for the development of unusual equipment which
are not commercially used, and test these equipment in pilot plant studies.

5. Pilot Plant:
- Pilot plant resembles the prototype of commercial plant.
- The design and erection of equipment for pilot plant should be such that:
. it will produce data translatable to commercial scale
. it will be suitable for much wider range of operating characteristics.

-USES: .To investigate thoroughly the rate of reaction, reactants, catalysts,

temperature, concentration, control specifications, safety and health
 hazards .
. For the selection of equipment and materials.
. To get time and labor study information .
. To study by-product recovery and waste disposal problems.
. To test the use of alternate raw materials.
-OPERATION: . Done by chemical engineers only.
. Plant should be capable operating for long periods to obtain fair
estimation of labor costs & manufacturing costs.
- -BY-PASSING: During critical times the engineering group may by-pass
the pilot plant and go ahead with commercial plant,
-if the process is not new, available trained engineering people
with experience and chemical engineering pilot data available
from other similar processes.
-if the new process is similar in most respects to an established
manufacturing process.
Note: For most chemical engineering equipment it is not required
to have pilot data for commercial size equipment design. Ex.
H.E., Filters, Dryers, pumps, material handling equipment .
Only for Reactors, Separation columns such data is required.

6 Commercial Plant:
-This is ‘final stage of development’
- Carried out when
i when the process survives all the above steps
ii when it is assumed that all the technical/economic risks are minimum
iii when estimates indicate that production cost is low.
-This stage involves:
i Coordination chemical & engineering data and translating data into a
commercial plant data.
ii Referring to trade literature/hand books/Manufactures catalogues

for proper selection of types and specific piece of equipment and

study the performance and capacity.
iii Prepare preliminary layouts based on best flow of materials with
 templates of equipment.
iv After choosing desired layout, the actual drawing of plan and
elevation is prepared and accurate preconstruction cost estimates
are made.

- The goal of commercial Plant: - Is to secure a workable plant with maximum returns of
investment. The plant should be technically/economically satisfactory.
- So careful consideration should be given to the following factors:
i Specification/selection of commercial equipment/materials.
ii Plan and elevation of plant.
iii Location of the plant.
iv Operating instructions to labor.
v Selection of personnel.
vi Preconstruction costing.
Vii Safety factors for sake of workmen/public at large, plant equipment.

-The above factors will be discussed in detail in this course.

 UNIT-2
Safety Considerations-Plant Design
- Buildings and Process equipment:

-Rational plant design must consider all safety factors for minimizing possible
hazards.
Hazards :- Corrosion/fires/explosions for buildings/equipment
Fumes/poison gases for personnel
Process leakages/spillages due to poor lighting.
These hazards are inter related.
So proper design should take into consideration of not only the process flow
considerations but also the course of action of the operators in the plant.

Safety measures should also be considered from the point of the people
Outside the plant especially when dealing with disposal of wastes.

-FIRE HAZARDS:
-This causes great loss to plant, personnel, production interruptions etc.
- To deal these hazards we have a separate engineering group namely
‘Fire prevention and control’
-The objective group is to minimize opportunities for above hazards by
Prevent , Control and Extinguish of fire
Fire prevention: Refer to that phase of design which minimizes fire hazards inherent
to the process.
Fire Control : Refers to that phase of design which controls the fires which have already
been started, until available extinguishing forces become effective.
Regulations and recommendations- Of state/central government to be followed as
closely as possible.
- MECHANICAL HAZARDS:
-These hazards cause personnel injury, loss of personnel/property
-Some of the safety measures are: Providing safety guards,
visual warnings like sign boards/color schemes.
-In using hand tools the safety measure to be followed are:
-non substitution of one tool for another.
-guarding /sheathing of sharp bladed tools.
- insulation of electrical hand tools.
-use of anti spark tools in explosive areas.
-ELECTRICAL HAZARDS:
- These hazards results in –Shocks by AC & burns by DC due to faulty
wiring/insufficient care of equipment.
 -Fires from : a. overload circuits not properly equipped with
Fuses/circuit breakers.
b. Capacitor discharge.
c. Sparking of switches near inflammable
materials.
-Preventive measures against shocks/burns &fires:
-Proper enclosure of high voltage equipment/capacitor
- Indication of accessible voltage sources.
-Proper maintenance of wiring and equipment
-Capable personnel and good house keeping.
-design of electrical circuits as per codes.
-CHEMICAL HAZARDS:
-‘Chemical Safety and data Sheets’ is an important manual on safety of chemicals.
-These data sheets discuss:
-safety handling of hazardous chemicals by means of drawings,
graphs & tables of data.
-loading/unloading of chemicals shipped in tank cars.
-‘Dangerous properties of Industrial materials’ may be referred .
-SAFETY HAZARDS:
-The heath, wellbeing and livelihood of ‘workers’ are in the hands of management
and it will be the moral and ethical responsibility of management to care all safety
measurements.
-Safety hazards are very important because they reduce the technical efficiency of
workers and the product quality.

Example: If any hazards are known & if proper safeguards are not provided ,the
psychology of operator is such that his attention is drawn there to and to that extent
he will not perform his normal duties. This results in improper discharge of duties i.e.
improper washing, drying, filtration etc. which finally results in unsatisfactory product.
-HEALTH HAZARDS:
-There are numerous health hazards in industry and to prevent them industry work
With the committee set by the local state government.
-Industrial hygiene activities prevent & control
1.Occupational health hazards by controlling dust, fumes, gases, X-rays etc.
2.Circumustances which produce fatigue such as excessive noise, poor lighting
inadequate ventilation, excessive heat & humidity etc. These affect in
workers performance, eye strain/headaches.
 UNIT-3
PROCESS DESIGN:
Basis, Flow sheets & Material and Energy Balances

-This is the first step for preliminary cost estimates of proposed plant and if it is feasible
can lead to commercial plant.
-Steps involved in Process Design: From literature survey and pilot plant studies, we have
sufficient data and information which can be translated
to commercial design.
i. One should first identify all the chemical and Physical operations involved
in the process ex. Reactions, Filtration, distillation, drying etc. These facts
are depicted in flow sheets form.
ii. Apply stoichiometric principles and process calculations to obtain
material and energy balance flow sheets .
iii. Then the designer is ready to specify the type of equipment required for
the project .

Step-1 : Development of Block type process flow sheet.

-The literature, combined with pilot plant studies give us written description of
the process with all the design data.
-We translate this information into a working pattern. i.e. we represent all
operations of the process in a pictorial form.
-Identify the operations and put them in rectangular boxes in sequential form,
and describe the streams entering and leaving the boxes.

Example: Process description for manufacture of Bezenehexa Chloride(BHC)

Reactants---------Reaction—crude product-----------Separation—crude products------Neutralization

│ │ │
------- recycle of unreacted ----------------- Fractionation
│

Fig : Qualitative Block type Process Flow sheet.

Step-2 :Development of material and energy balance flow sheets.

-Before proceeding to the calculations on material balance, we should first
 decide process cycles.

Step-(2a) -Selection of Process cycles:

-We know the total annual production requirement. But for material
balance we should decide some time basis i.e. choose a process cycle
namely : 24h/day or 8h/day - Operation.
- Production by sequential batch operation or on a steady state
continuous basis.

-Continuous vs Batch Processing:

Continuous processing:
-Generally continuous processing should be given preference to the
batch processing purely on economic grounds.
Ex . Continuous operation gives, small size equipment which are less
expensive, also it provides easy control of the process by
automatic instrumentation.
Hence labor requirements are minimized.
Examples: Fertilizer, Cement, petrochemicals, pesticides industries etc.

Batch processing:
-However batch processing also widely used in chemical industries in
the following cases:
a. Small volume output of relatively expensive product.
b. When sales demand is not steady.
c. When the same equipment is used for several processes.
d. When the batch equipment from an abandoned process is
available at low cost.
e. When continuous process equipment is not satisfactorily
developed.
f. When the yields and quality of products can not be achieved
by continuous process because of –very low reaction rates
and correspondingly long residence times in equipment.

Example : Pharmaceutical industries.

Note: Quite often a few steps in a process may be better accomplished by batch
Operation and the remaining on a continuous basis with provision for
sufficient buffer storage facilities between steps.

Shifts and operating time schedules:

 - Depending on labor conditions and volume of sales we can have the flowing
schedules:

1. Around the clock operation

3 shifts operation ; 4 shifts labor ; 7 days a week ; with or without
scheduled maintenance.
2. Five day operation:
1,2,or 3 shifts operation ; 1,2,or3 shifts labor ; 5 days/week ; overtime
if demand is more and maintenance during non operation.
-Shutdowns: - After operation for a period of two years
-or 2 weeks annually, with operating people on vacation, & maintenance
people doing inspection, repair, replacements.
-Unscheduled shutdowns:
-Interruption in scheduled operation due to lack of raw material, labor
strikes, failure of utilities, fire& explosion or equipment failures.

Once we decide on these operating cycles we can arrive at a suitable time basis for
material balance calculations.

Example: Annual production - 60000 tons

If the operation is : 3 Shifts/day (8hr each), 40 h/week(5 working day)
10 days of maintenance /year.
Number of days operation per annum =365 –(52×2 +10) =250
Designed daily production = 60000/250 =240 ton
Designed hourly production = 240/24 =10 ton.

Step-(2b): - Develop Simplified Equipment flow sheet from the qualitative

Block type flow sheet.
-Use the equipment symbols that are internationally accepted .
-The symbols should resemble the original equipment as nearly as possible.
-The flow sheet is then coded by letter for each key operation
A-Reactants section; B-for Reactor section ;
C-separation ; D-by product distillation etc.
-All the equipment associated with the key operation should be conveniently
numbered as ex .D1 , D2 D3 etc.
Step-(2c): Material balance flow sheet:
-Perform material balance calculations using industrial stoichiometry principles
and process calculations.
-This should be done for each equipment in the equipment flow sheet, giving
mass flows entering and leaving the equipment.
 Example . A3 Feed Pump
Entering Leaving
X ----- -----
Y ----- -----
__________ ___________
Total ----- -----
__________ ___________
-There are alternate ways of presenting material balance calculations on the
flow diagrams
- One method is to place all the stream components and their flow quantities
at the proper location on the equipment flow diagram.
Useful for simple process flow sheets
Cumbersome when number of streams components large.
-Another method is to indicate all the material balances all equipment
in a tabular form.
Useful when number of components in the stream large.
Easier for checking of material balance at intermediate stage.

Step-(2c) : Energy balance flow sheets:

-After thorough material balance is made, then the mass quantities are
used to compute energy balance.
-The temperature & pressure levels at each major piece of equipment will
serve as the guide in making heat balances.
-The results are listed on various forms on the flow sheets just like material
balances.

Engineering Flow Diagrams:

Consists of various types.
1. Simplified equipment flow sheets as described above.
This flow sheet is sufficient for pre-construction cost estimate.
2. Detailed equipment flow sheets:
- These flow sheets include process piping, valving, drains, bypasses, vents
apart from the equipment requirement.
-Standard symbols are used to represent these accessories.
Useful for plant construction works.

Some of the standard symbols adopted internationally are depicted below:

 (A) : Storage Vessels

(B) Heat transfer Equipment

(C) Seperation Equipment

(D) Other Equipment

(E) Piping & Instuements

3. Instrumentation flow sheets:

Useful for determining the requirements for process control .
Symbols used here are standardized by Instrument Society of America.

Upper case letter First letter Second letter Third letter

(process variable) (Type reading) (Additional function)
A - Alarm -
C Conductivity control control
D Density - -
F Flow - -
I - Indicating -
L Level - -
P Pressure - -
R - recording -
T Temperature - -
V Viscosity - valve
Definitions and permissible position in any combination.
Let us see how to use these letters:

Variable Controlling devices Measuring devices Alarm devices

Record Indicate Blind Record Indicate record indicate blind
Temperature: TRC TIC TC TR TI TRA TIA TA

Example: Development of ‘Equipment Flow Diagram’ for the production of BHC Using the
standard symbols
 UNIT-4
SELECTION OF PROCESS EQUIPMENT AND MATERIALS

-Selection of equipment and material of construction is the next step for preconstruction
cost estimates and the eventual construction of chemical plant.

- The steps involved in selection of Type and Size of equipment depend on whether the
process is new or already established.

- When the process is operation else where the task is relatively simple & involve
-do comparative calculations
-scaling equipment and accessories
-incorporate pertinent innovations
- But a new process requires;
-complete study of unit operations and processes.
-select best type & equipment based on pilot plant equipment.
-setting up cost equations to get optimum design
-consider into account the experiences of others/manufacturers.

-Selection procedure:
-Know the equipment requirement from process flow sheets.
-Prepare design calculations for each such equipment.
-Prepare a specification form using standard equipment.
-The chemical engineers involved in chemical apparatus design group will carry out the
Process design calculations and present the summary data for each equipment in a sheet
called ’Process data sheet “
-It is expected that the engineer shall have thorough knowledge on chemical engineering
principles involved unit operations and unit processes.
-A typical preliminary specification sheet common to all equipment is shown below:
1.code No ------- Flow sheet No----------- 2.Date-------------
3.Name of the equipment-------------------
4. Type------------- 5. No required--------------
6.Material handled(type,composition)-------------
7.Operating conditions. Temperature------------ ,Pressure----------
8. Design throughput (mass/time)-----------
9.Volumetric capacity------------
10. Dimensions; ht.-------, diameter/width----------,length--------,floor area-----------
11.Recomended material of construction---------------
12.Piping ; inlet--------,outlet------, other fittings-------
13. Instrumentation requirements---------------------
14.Utilities: Electrical-Motor type------,Hp---------
Steam- pressure-------, flow rate-------
Cooling water – temp.in ------ , flow------,max temp-----
15. Construction details/possible suppliers-------------
16. Estimated operating labor------------
-Chemical engineering equipment are classified into standard and non standard (Special).
The selection process will depend on what type of equipment is.

Standard vs special equipment:

-Standard equipment: Choose a standard equipment whenever possible because:
1.First cost is substantially low
2.Duplication of equipment& making the repairs on old equipment will
be made much easier.
 3.The equipment is tried out and stood rigorous test of service.
4.Manufacture can deliver such equipment under a guarantee of
satisfactory performance.
5.New design is experiment to the user as well as to the manufacturer.

Examples are: Pumps, blowers, compressor, boilers, centrifuges, filters

Material handling equipment. Etc.

-Non-Standard equipment :
-Oftentimes the engineer is confronted with the situation
in which his problem requires a special design, use of special materials.
-Based on process specifications he prepare detailed designs and drawing
for fabrication.
-One should assure himself that he has completely exhausted the trade
Literature for his requirements before one embarks on the design of new
equipment.
Examples are: Pressure vessels, Heat Exchangers, Reactors, Tall columns etc.

-Here we present the selection process for one common standard equipment namely ‘PUMP’
also one non- standard equipment ”HEAT EXCHANGER”.

PUMPS:
Uses: 1. To transfer liquids ,colloidal solutions, slurries etc. from one point to another
In horizontal or vertical directionunder pressure heads ranging from sub
atmosphere to very high pressure.
2. To produce both high/low pressure in equipment to aid physical and chemical
processing/reactions.
Points to be considered in selection:
1. Continuous duty for long periods with freedom from forced shutdowns.
2. Flexible operating characteristics (head, capacity}
3. Ease of control
4. Maximum interchange ability of pump and pump parts.
5. Capacity to handle solid or abrasives in suspension.
6. Availabity in wide choice of materials of construction.
Important information required for the selection of a pump:
1. Capacity----------- , Head-------------(max/ permissible range)
2. Operating Characteristics:
Constant head and constant capacity.
Variable capacity and constant head.
Variable head and constant capacity.
3. Nature of liquid- Volatile/ lubricating/corrosive (indicate the name)
4. Nature of solids in suspension----------------
5. Operating temperature range-----------------
6. Viscosity range--------------(affects Hp required)
7. Efficiencies-------
8. Cost---------

Types of pumps: There are different type of pumps available for different applications namely:
Centrifugal pumps,
Reciprocating pumps,
Gear pumps etc.
Centrifugal Pumps: These are very commonly used pumps in chemical and other process
industries.
Advantages: 1. Flow is free pulsation
2. Compact and rugged, simple to operate
3. Can be operated manually/automatically
4. No reciprocating parts.
5. Installation cost is less
6. Can operate against closed discharge without building up dangerous
pressure.
Disadvantages:
1. Should be primed each time it is started.
2. Can not develop so high a suction lift as the reciprocating pump.
3. Capacity decrease when handling viscous liquids
4. Each impeller can develop a head of 100m only. Hence for high heads 2
or more in series to be used (multistage centrifugal pump).
5. Since capacity α speed, head α speed2 ,the pump should be operated
at the proper rate. Hence one has to check the manufacturers pump
performance diagram before installation.
Reciprocating Pumps:
Important feature:
1. Delivery of fluid is effected by displacement of piston.
2. Used for small capacities against high heads.Ex. deep-well/boiler
feed/filter press pumps,
3. Operate on high suction lifts and can handle fluids of high viscous than
Centrifugal pupms.
Limitations:
1. Costly design to construct.
2. Rubbing contact limits the choice of materials of construction.
3. Pulsating flow.
 4. Relatively inflexible operating characteristics.
5. Problem of leakages in reciprocating rods/seals.
Rotary Gear pumps: Example: Screw pump, and Vane pump.
Function: Pump employ two meshing gears within a case .Liquid is trapped
By gear teeth and carried from intake to discharge.
Important Features:
1. Can handle any liquid or semi liquid and viscous liquids such as
molasses, brine ,heavy /light grease ,oils etc.These liquids can not
be handled satisfactorily by either centrifugal or Piston pumps.
2. Built in capacities ranging 2-42000 gpm against pressures up to
1000psi.or more.
3. important application is extrusion of cellulose nitrate solution at
a pressure as high as 2500 psi.

Limitations:
1. Rotary pumps normally depend for their lubrication on the material
being pumped.
2. Since these are built with close clearances, should not be used for
handling liquids containing grit or solids.

- The typical specification sheets of non-standard equipment like ‘Heat exchanger’ and a
“Sieve Tray Column” are presented below.
-
 UNIT-5
PLANT LAYOUT
- Arrangement of equipment and facilities is ‘Layout’.
- This is necessary requirement for :
i. Accurate pre construction cast estimate.
ii. Detailed engineering of piping, structural and electricals facilities.
iii. Obtain reliable information on land and building cost.
- Factors to be considered in planning layout:
1. Future expansion.
2. Economic distribution of –water, steam, power and gas.
3. Weather conditions- are they amenable for outdoor construction?
4. Safety considerations-possible hazards of fire, explosions.
5. Waste disposal problems.
6. Sensible use of floor and elevation.
7. Building code requirement.
- Methods of layout planning:
-Layout planning is done by a group of experts including, process engineer, project
engineer, piping and structural engineers.
-They prepare plot plans namely 1. Master plot plan
2. Unit plot plan.
-Master Plot plan: Shows location of process areas, Cafeteria, research/admin
buildings, utility facilities, other areas each one as an individual
blocks.

-The total site plan is divided into these blocks which are separated by
internal roads.
- Several factors influence the location of these blocks and roads.
1. Plant terrain.
2. Existing highway and road ways.
3. Type of process units.
 4. Safety.
5. Plant services.
Plant terrain: -The drainage system can be planned from contour map of sit.
-Portion of site requiring the least amount of fill and having the
best soil bearing characteristics are selected .
-Highest areas on the site may be used advantageously for
storage of products so that gravity loading of tank cars will be
possible.
Existing High way/road ways:
-Offices and ware houses may be readily accessible from the main
high way.
-Storage yards and ware houses must be conveniently decided to
the nearest rail/road ways.
Safety: - A great deal of planning is governed by local, National safety
and fire code requirements. Ex. Furnace Oil/LP Gas storage
tank areas.
Type of process units:
-If product from one process unit is fed directly to another the
units should be adjacent to reduce piping and pumping costs.
-Operation and maintenance and utility distribution are often
simplified by locating similar units in one section of the plant.
Plant services: -Power plant, workshop, ware house, cafeteria and change rooms
should be located not only for maximum efficiency and
convenience but also for minimum interference with the process
operation.
Procedure: - Make rectangular cut outs for each of these units move them over
a drawing of total plant site to obtain different arrangements.
-Study these arrangements with all interconnecting piping &
utility piping indicated.
-Choose the final plot plan depending on
a. Economics of construction
b. Ease of Operation.
c. Future expansion.

UNIT PLOT PLANS:

-The procedure is same as in the case of Master Plot Plan but the detail is much
greater due to a large number of elements making up the process units.
 Steps Involved:
-List all equipment like H.E., pumps, reactors etc. indicating size and
weight.
-Decide which equipment to be elevated depending on pump
suction/process requirements since elevation is always costly
and should be done only if necessary.
-Flow sequence and function of each piece of equipment should be
thoroughly understood so that its arrangement in plot plan is
functional.
-Know maintenance methods of each equipment ,so that equipment
requiring frequent maintenance will be easily accessible.
-Plan the spacing of equipment in accordance with the following
rules:
i. 3 feet between pumps.
ii. Equipment for example H.E. free space for
removing tube bundle .
iii. Size of the foundation.
-Study the erection problems .When possible ,its placement should
facilitate erection.
Conclusion: A good plot planning is a matter of experienced judgement.
It is a job of a group of all experienced engineers.
 UNIT-6
ECONOMIC EVALUATION:

-Before attempting to design of a Process plant,process engineer must make the

‘economic evaluation’.
-The economic evaluation determines whether the project should be taken up or not.
-This stage includes
-Total capital cost estimation.
-Estimation of manufacturing cost.
-Forecasting product sales price.
-Undertaking economic analysis.
-Total Capital Cost Estimate:
Comprises of Two components: 1. Fixed capital cost. (plant machinery and building.)
2. Working capital cost.(Funds needed to keep the
plant running.)
From where we get the capital?
Shares & Bonds (from public) ; Loans( From Banks/Financial Institutions);
net earnings from plant operations ; and other sources.
See the typical cash flow diagram of a company:
Factors affecting the total capital Investment cost:
-A chemical engineer shall have thorough knowledge about these factors to
make reliable decisions.
1. Source of Equipment: -Major cost goes into this.
-Go for standard equipment or second hand ones if available.
-If new are required go for competitive bidding process.
-Aware of price fluctuations.
2. Operating time and rate of production: -related to Sales demand and thus on profit
As shown below figure.
 3. Government regulations and policies:
-Import and export policies, Income Tax rates,
Permissible depreciation rates and environmental regulations.
Types and Methods of Capital cost estimates:
Types can be divided into two – 1. Pre design cost estimate methods
2. Firm cost estimates methods.
(There are several methods in each type.)
Firm cost estimates: These are time consuming methods.
Used in the final stage of plant design.
Use bidding process to get costs from suppliers.
1. Detailed item estimate;
It require extensive data and cumbersome process.
2. Unit cost estimates:
If previous cost records are kept available by quotations or by index
corrected costs.
Pre design cost estimates: These are quick methods.
1. Cost Indexes: In this method we use cost indexes to estimate present cost
from past cost data available from different sources.
 Present cost = Original cost (index value at present/index value at original time)
Cost Index values are available from-
i. Marshall and Swift equipment cost indexes.
ii. Engineering News-record construction cost index.
iii. Chemical engineering plant cost index( base year 1959).
2. Estimate equipment cost by Scaling: Six-tenth factor rule.
Cost of equipmenta = Cost of equipmentb ×(Capacity of
Equipmenta/capacity of equipmentb)0.6
Some use different exponent value instead of 0.6 for different equipment.
Example: The purchase price of a 50 gal glass-lined reactor is $ 8350 in 1981.
Estimate the purchase cost of a similar 300 gal glass-lined reactor in 1986.
Use six-tenth rule .The Marshall cost indexes are 721 in 1981, 798 in 1986.
Solution: Cost of 300 gal reactor in 1986 is = 8350×(798/721)(300/50)0.6
= $ 27080
3. Percent of Delivered equipment cost: (Factor Method)
Total fixed capital cost,C = Cost of delivered equipment
+ Cost of erection
+ Piping construction between equipment.
+ Cost of instrumentation & control.
+ Cost of building & auxillaries.
+ Engineering & Contractor’s fee.
+ Contingencies.
C = ( ∑E + ∑(f1E+f2E+f3E+----) ) FI
Where E =delivered equipment cost
f1,f2,f3 -- are multiplying factors for piping, electrical,
Instruments , buildings – etc.
FI = Indirect cost factor > 1
4. ‘LANG’ factors method:
- Depends on the type of industries as shown below.
 LANG factors
Fixed capital Total capital
-Solid processing industry: 3.9 4.6
-Solid-fluid process industry: 4.1 4.9
-Fluid processing industry: 4.8 5.7
C = Factor ×Delivered equipment cost.
5. Power factor applied to plant capacity Ratio:
C = Co(R)x wher ,R =ratio of new capital to old capital
Co = cost of old capital
x = exponent depend on type of industry.

Working capital estimate:

Capital is required for the following items:

1. Raw material inventory- one month stock at cost.
2. Materials in process-inventory- one week at manufacturing cost.
3. Product inventory- one month stock at manufacturing cost.
4. A/C receivable - one month at selling price.
5. Cash; - To meet current expenses of wages, salaries, utilities etc.
- one month at manufacturing cost.
Manufacturing Cost Estimate:
Divided into :- Direct cost + Indirect cost (subdivided as Fixed charges+
Plant overheads)
Direct production cost –This is directly related to manufacturing operations.
Includes: 1.Raw materials (with transportation& unloading cost)
2.Utilities-
3.Labor
4. Maintenance & repairs.
5.Packing and Shipping charges.
1. Raw materials: This cost will dominate the production cost.
So long term with suppliers should be made.
Along with raw materials we use solvents, catalysts etc.
Solvents:- Used in separation processes such as solvent extraction,
gas absorption, and liquid phase reactions.
- Leakage losses, incomplete recovery, degradation etc. require
regular supplies.
Catalysts:- Regularly used to make up the losses due to abrasion, decay etc.
2. Utilities: Steam, electricity, fuel, cooling water, process water, compressed
air, refrigeration, waste treatment.
3. Labor: -Require several type of labor: operating, maintenance of both plant
and utilities operations .
4. Maintenance and Repairs:
-Needed if the plant is to be kept in efficient operating condition.
-Include cost for labor, material,& supervision.
-Usually it comes to 6% of total Fixed capital.
5. Packing and Shipping charges:
Indirect production cost: -These costs remain practically constant, do not vary with
changes in production rate.
-These are include as (A) Fixed costs: (B) Plant overheads:
(A) Fixed costs:- 1.Depreciation- It is a major cost hence engineer should become
familiar with current Federal Government regulations.
2.Property taxes-amounts approximately 2% of Fixed costs.
3.Insurance- On plant & buildings-amounts to approximately
1% of Fixed cost
4.Rents- if any shall be included.
Depreciation:
-The value of plant will decrease with time because of
ware (corrosion, chemical action, decay, abrasion) and
technical obsolesce.
-Depreciation determines the contribution of equipment cost to the
production cost.
-Depreciation rates are established by Government revenue department.
-10% per year for equipment.
-6% per year on buildings.
- The salvage value for various type of equipment are established.
Salvage value means the residual value of equipment when it is to be
Replaced (life of equipment) with a new equipment.
-Methods of determination of Depreciation: Several methods are available
1. Straight- line depreciation:
Equal amounts are charged off over the useful life of equipment.
d= ( Vo –Vs)/(n.Vo)×100
where d =annual % depreciation based on original investment.
 Vo=Original investment value of the equipment.
Vs=final salvage value of equipment.
n= allowable service life in years.
2. Declining Balance Method:
The annual depreciation is a fixed % of the current property
Value.
Since the value is highest at the beginning, the depreciation is
also highest.
dd = 1 – (Vs/Vo)1/n or Vx =Vo(1-dd)x
where dd =annual % depreciation
Vx = Property value after x years.
There are other methods based where interest on investment is allowed.
Like a.) Sinking Fund method b.) Present Worth method
These methods are poor from the point of view of quick return on capital.
Used only on Public utility concerns.
(B) Plant overheads: ( Management and marketing expenses)
These include: 1. Research & development
2.Engineering services
3.Hospital and medical
4. Safety services
5. Payroll O/H –Pensions, life insurance, social security
6. HR /Admin salaries
7. Cafeteria/recreation services.
8. Warehouse services.
9. Security services.
10. waste treatment facilities.
11.. General plant maintenance services(legal, audit fees) etc.
 Total of these amounts about 2-5 % of sales value.

Economic Analysis:
Gross profit = Gross sales - Total product cost
Net profit = Gross profit – Income tax
There are three popular methods for economic analysis.
1. % Return on investment.
2. Pay out time.
3. Project present worth.
Percent return on Investment:
ra = E×100/I ; rb = P×100/I
where P=Gross profit , E= Net profit , I = Capital Investment( Fixed or Total)
For Chemical Industries ra =7-20 % : rb = 15-40%
Pay out time:
“ The number of years ‘n’ that will elapse before the investment
has been completely recovered through savings”
Pay out time before taxes, nb =I/P =100/rb
Project present worth method:
This method recognizes the time value of money and is more widely used by
economists and accountants in presenting profitability reports to management,
when two processes require close comparison.
Profitability, plant capacity, and sales:
-In order to provide management with a graphic representation of profitability
analysis, working charts are extensively useful.
-They show the minimum size of the plant which should be built to assume a
reasonable Percent return on investment.
-Graphs showing the % return on investment vs Selling price and
the % return in investment vs Plant capacity/annum are useful.
 Another concept is the effect upon costs and profits if a certain size plant is operated
At less than full capacity. The figure ‘Sales vs capacity’ shows the break even point.

Example:
 UNIT-7
PLANT LOCATION:

- The final stage of planning before actual construction of plant begins is

the site location.
- If plant is not located in a most economically favored position, the competitive advantages
of process & careful design of plant, can be wiped out and the plant may even be
inoperable.
- Factors in Plant location:
i. Primary factors: Help in choosing of a region.
ii. Specific Factors: Help in choosing an exact site location within the region.
- Primary Factors:
a. Raw material:- Supply- availability and distance.
b. Market- Demand vs distance; growth/decline, Competition present/future
Inventory storage requirement.
c. Water supply- Quality, temperature, mineral content, bacteriological content
- Quantity and dependability.
- Cost.
d. Power and Fuel- Supply-availability and costs.
e. Climate- Humidity and temperature.
Investment required for construction.
Hurricane & earth quake history.
Specific factors:
a. Transportation:- Availability of various services (Rail, Road, Water, and Air)
b. Waste disposal:-Regulating laws, air/water pollution possibilities.
c. Labor:- Availability of skilled labor, labor relation, labor costs.
d. Regulatory laws:- Building code, highway restrictions.
e. Taxes:- State & local taxes.
f. Site characteristics:-Contour of site, soil structure, cost.
g. Community factors:- Rural/urban, housing cost ,schools, medical facilities.
h. Fire & Flood control:- Fire hazards in surrounding areas, flood history
i. Vulnerability to wartime attack:- Distance from important facilities.

Raw materials
1. Source of R.M. greatly influence the site selection. This is true for those
industry in which the R.M. is inexpensive and bulky.
Example: Steel, cement, Soda ash, crude refining.
-The raw material should be available on companies owned property.
-Survey should be made to chart definitely the quality and quantity.
 - A minimum of 30-50 years is usually considered necessary.
2. Controlling factors : physical distance
Purchase price and freight.
Reliability of supply.
Market:
This is specially important for intermediate/small industries, since they deal
directly with the market. Ex. Concentration of industries in large cities.

Also large oil refineries are located near large cities where market exist for the
finished products. The crude can be pumped from large distance through pipe
lines cheaply.
Water Supply:
-Obtained from 1.Plants own source ( economical when large water
needed,borewells,nearby lakes/river).
2. Municipal supply.
-Before starting of project, the company must ensure itself of a sufficient supply
of water for all industrial, sanitary and fire demands both present and future.
-Important points to be considered are:
1.Availability of surface and ground water, and seasonal fluctuations in
quality, quantity and temperature.
2.Chemical composition and physical characteristics of water supply.
3. Microscopic and bacteriological analysis.
4. Estimated requirements for various needs of plant like water for
processing, cooling ,steam generation, sanitary use fire protection-
present/future.
5. Availability and cost of using a municipal water supply compared .
6. Effect of industrial contamination on surface and underground
water, resulting industrial activities in the area.
-Quality of water:
1. Depend upon the service for which it is needed. Boiler feed water
require water from all organic/inorganic salts, traces of silica.
2. Ground water contain less suspended matter , but contain high
amounts of soluble salts.
Power and fuel supply:
-If gas is the basic raw material as in Ammonia, it is the controlling economic
factor as it supplies R.M. and power.
-Power for chemical industries is primarily from coal, water or oil. Power can
be economically developed as a byproduct in most chemical plants, if the
needs are great enough.
-For Cement, Caustic industries, paper &pulp, glass which are power
intensive needs to be located where power is available plenty and cheap.
Climate:
-Chemical plants as a general rule are rather difficult to insulate or to provide
artificial heat.
-Excessive cold ,deep snow, torrid heat and excessive humidity reduce the
productivity of workmen.
-Milder climate make for cheaper installations, equipment can be located
outdoors, not requiring housing/buildings.
-If site selection is in a hot, damp climate adjacent to salt water (coastal) then
one must be prepared for higher maintenance costs.

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