CHAPTE R 12

Process Modeling and Techno-Economic

Evaluation of an Industrial Bacterial
NanoCellulose Fermentation Process
Fernando Dourado, Ana Fontão, Marta Leal, Ana Cristina Rodrigues,
Miguel Gama
Minho University, Biological Engineering Department, Campus de Gualtar, Braga, Portugal

Introduction
The unique properties of bacterial nanocellulose (BNC) as a biopolymer and its potential
applications have been widely reported in the literature. The commercial exploitation of BNC
has been strongly confined to two opposite market segments: on one end, the food segment,
usually associated with high production volumes and low profit margins, for example, “nata
de coco,” widely known as a food product obtained by “traditional fermentation” methods;
on the other end of the spectra, associated with high-value-added niche markets, medical
applications of BNC mostly include its use as wound dressings. Much effort (Table 12.1) has
been devoted to designing an economical process for BNC production, by optimizing both
upstream and downstream processes, including the evaluation of several culture media (CM)
compositions, fermentation systems, genetic engineering, and postproduction modification
processes [1–4].
The scientific literature propagates the idea that the technological production of BNC
is extremely expensive. However, to the authors’ knowledge, a proper analysis on the
economic and financial aspects of an advanced technological BNC production is virtually
inexistent. Kralisch et al. [3] have calculated the BNC production costs, by operating a
pilot-scale “Horizontal Lift Reactor” (HoLiR). The novel BNC fermentation system is
described as combining the advantages of static cultivation and continuous harvesting
of the formed BNC pellicle, under steady-state cultivation conditions. The results of
this economic evaluation were expressed as relative percentages of fixed and variable
costs. In their scenario, equipment costs dominate (51%) the total costs (TC, which
include personnel, electricity, and equipment costs), whereas personnel costs represent
32% of the TC. Lastly, material and energy costs amount to only 7% of the TC. To
the authors’ knowledge, no other publications addressing the economic feasibility of a
biotechnological production of BNC are publicly available, especially considering a large-
scale scenario.
Bacterial NanoCellulose
http://dx.doi.org/10.1016/B978-0-444-63458-0.00012-3 199 Copyright © 2016 Elsevier B.V. All rights reserved.
 Table 12.1: Summary of a literature survey on BC production with different strains and different culture conditions
Medium Composition Culture Conditions
Carbon Nitrogen Culture Best Results
Strain Source Source Additives pH Temperature Time Type of Culture (BC yield) Obs Refs
AJ 12368 Sucrose Yeast ex- Ammonium 5 30°C 3d + 3d Agitated 1.07 g  L −1 [5]
(5% w/v) tract (0.5% hydrogen (air-lift fermen-
w/v) sulphate ter) + Static(petri
(0.5% w/v), dishes)
monopotassium
phosphate
(0.3% w/v) and
magnesium
sulfate
heptahydrate
(0.0005% w/v)
IFO 13693 d-Glucose Peptone Schramm Hes- 6 30°C 3 d Static 10.8 g  L−1 Cellulose pro- [6]
(0.5% w/v) (2% w/v); trin medium; duction rate 36 g 
Yeast ex- ethanol (0.2% d−1 m−2
tract (0.5% v/v)
w/v)
AJ12712 Sucrose Yeast ex- Complex me- 5 30°C 7 d Static 22.1% (g of Best result with [7]
(5% w/v) tract (0.5% dium BC/g sucrose 10% oxygen
w/v) consumed)
KU-1 d-Mannitol Yeast 6 30°C 168 h Static 4,6  g L−1 Best result with [8]
(2% w/v) extract d-Mannitol
(0.5% w/v) 1.5% (w/v)
polypep-
tone (0.5%
w/v)
BPR-2001 Fructose Corn Steep 5 30°C 3 d Agitated 7.7  g L−1 [9]
(ATCC700178) (4% w/v) Liquor (1 L jar fermenter)
(2% w/v)
BPR-2001 Fructose Corn Steep 5 30°C 72 h Agitated No reference to [10]
(ATCC700178) Liquor (30 L jar fermenter) BC yield results
 Medium Composition Culture Conditions
Carbon Nitrogen Culture Best Results
Strain Source Source Additives pH Temperature Time Type of Culture (BC yield) Obs Refs
ITDI 2.1 Coconut Dipotassium 4.5 30°C 7–8 d Static 12.53 g  L −1

water (su- phosphate

crose 10% (0.3% w/v)
w/v)
LMG1518 Sucrose Not re- Acetic acid 5.5 No descrip- 100 h Static 28.4 g  L−1 [11]
(7% w/v); ported (0.75 % v/v) tion
Glucose
(3.5% w/v)
BRC5 Fructose Corn Steep (5 g  L−1 of car- 6 30°C 48 h Fed-batch Agitated 6.8 g L−1 [12]
(3.5% w/v); Liquor bon substrate (5 L jar fermentor)
Glucose (8% w/v) supply)
(0.5% w/v)
BRC5 Glucose Corn Steep Oxygen enriched 5.5 30°C 50 h Agitated 15.3 g  L−1 Best result with [13]
(2% w/v) Liquor air; ethanol (5 L jar fermenter) 10% oxygen
(8% w/v)
BPR-2001 Fructose Corn Steep Complex me- 4.5– 30°C 67 h Agitated 3.8 g L−1 [14]
(ATCC700178) (4% w/v) Liquor dium 5.5 (50 L air-lift reac-
(2% v/v) tor)
Acetobacter sp. A9 Glucose Yeast Ethanol 6.5 30°C 8 d Agitated 15.2 g  L−1 Isolated from [15]
(2% w/v) extract (0–2% v/v) (200 rpm) apple
(0,5% w/v)
polypep-
tone (0,5%
w/v)
BPR-2001 Fructose Corn Steep Agar (0; 0.05; 5 30°C 5 d Agitated 8.7  g  L−1 Best results with [16]
(ATCC700178) (4% w/v) Liquor 0.1% w/w); (50 L air-lift reac- 0.1% (w/w) Agar
(2% v/v) xanthan (0.06% tor)
w/w); Complex
medium
BPR-2001 Fructose Corn Steep Oxygen enriched 4.4– 30°C 48 h Agitated 10.4 g  L−1 Best results with [17]
(ATCC700178) (3–7% w/v) Liquor air; Complex 5.5 (50 L internal-loop Fructose at 7%
(2% v/v) medium airlift reactor) (w/v)
E25 Glucose Yeast ex- Ethanol (1% 5.7 30°C 7 d Static 3.5  g L−1 [18]
(2% w/v) tract (0,5% v/v), magne-
w/v) Bacto sium sulfate
Peptone heptahydrate
(0,5% w/v) (0.005% w/v)

(Continued)
 Table 12.1: Summary of a literature survey on BC production with different strains and different culture conditions (cont.)

Medium Composition Culture Conditions

Carbon Nitrogen Culture Best Results
Strain Source Source Additives pH Temperature Time Type of Culture (BC yield) Obs Refs
BPR3001A Fructose Corn Steep Complex me- 5 30°C 48 h Fed-batch agitated 27.9% of Best result in [19]
(7% w/v) Liquor dium (1 L jar fermenter) fructose batch culture
(4% w/v) conversion (60 mL of me-
dium)
Acetobacter sp. Glucose Yeast Complex me- 30°C 7 d Agitated 7.21 g  L−1 Best result with [20]
A9 (4% w/v) extract dium 1.4% (w/v)
(0.1% w/v) ethanol
polypep-
tone (0.7%
w/v)
Komagataei- Glucose Peptone Ethanol 5 30°C 5 d Agitated 2.31 g  L−1 Best result with [21]
bacter hansenii (1% w/v) (1% w/v); (0–2% v/v) (200 rpm) 1% (v/v) ethanol
PJK (KCTC yeast ex-
10505BP) tract (0.7%
w/v)
Acetobacter sp. V6 Glucose Ethanol, lactic 6.5 30°C 8 d Agitated 4.16 g  L−1 Best results [22]
(1% w/v) acid, acetic (200  rpm) with synthetic
acid, fumaric medium
acid, pyruvic
acid, succinic
acid, inorganic
salts
BPR-2001 Fructose Corn Steep Polyacrylamide- 5 28°C 7 d Agitated 6.5  g L−1 Best results [23]
(ATCC700178) (2% w/v) Liquor co-acrylic acid (Flask shaken 175  with 3 g  L−1
(8% v/v) (1% w/w acrylic rpm) polyacrylamide-
acid); complex co-acrylic acid
medium
BPR-2001 Fructose Corn Steep Agar (0–1% 5 30°C 70 h Agitated 12.8 g  L−1 Best results with [24]
(ATCC700178) (4% w/v) Liquor w/v); complex (10 L jar fermenter) 0.4% (w/w) Agar
(2% v/v) medium
 Medium Composition Culture Conditions
Carbon Nitrogen Culture Best Results
Strain Source Source Additives pH Temperature Time Type of Culture (BC yield) Obs Refs
BPR-2001 Treated Corn Steep Complex me- 5 30°C 72 h Fed-batch Agitated 7.82 g  L−1 Molasses hydro- [25]
(ATCC700178) Molasses Liquor dium (10 L jar fermenter) lyzed with sulph-
(2% w/v; (2% v/v) uric acid—heat
fed-batch treatment;
feeding)
Komagataei- Glucose Peptone Ethanol (1% 5 30°C 48 h Agitated 1.72 g  L−1 Best result with [26]
bacter hansenii (1% w/v) (1% w/v); v/v); agitation (jar-fermenter 1% (v/v) ethanol
PJK (KCTC yeast ex- effect 200 rpm)
10505BP) tract (0.7%
w/v)
BPR-2001 Fructose Corn Steep Different sub- 5 30°C 3 d Agitated 7.5  g L−1 Best result with [27]
(ATCC700178) (3.9% w/v) Liquor strates; complex (Bioshaker BR- fructose 3.9%
(2% v/v) medium 3000 L) w/v; 5.3 g L−1
yield was
obtained with
molasses 3.7%
w/v
Komagataeibacter Sucrose Corn Steep — 28°C 72 h Agitated 4.5  g L−1 [28]
xylinus sp. St60- (4% w/v) Liquor (150 rpm)
12 (4% w/v)
IFO 13693 D – Glucose Peptone Lignosulfonate 6 28°C 7 d Static 16.32 g  L−1 Lignosulfonate [29]
(2.0 % w/v) (0.5% w/v); (1% w/v) reduces the
yeast ex- concentration of
tract (0.5% gluconic acid
w/v)
IFO 1772 Sugar cane Peptone Lignosulfonate 6 28°C 7 d Static 5.99 g  L−1 Best results with- [30]
molasses (0.5% w/v); (1% w/v) (90-mm petri out lignosulfo-
(4% w/v) yeast ex- dishes) nates: 5.79 g  L−1
tract (0.5%
w/v)
ATCC10245 Molasses Yeast ex- Schramm Hes- 6 28°C 5 d Static 7 g  L−1 Molass hydro- [31]
(2% w/v) tract (0.5% trin medium lyzate
w/v) Bacto
Peptone
(2.9% w/v)
NUST4.1 Glucose Corn Steep Sodium alginate 6 29°C 5 d Agitated 6.0  g L−1 Best result with [32]
(2% w/v) Liquor (0–0.1% w/v) (150 rpm) 0.4% (w/v) so-
(2% w/v) dium alginate

(Continued)
 Table 12.1: Summary of a literature survey on BC production with different strains and different culture conditions (cont.)

Medium Composition Culture Conditions

Carbon Nitrogen Culture Best Results
Strain Source Source Additives pH Temperature Time Type of Culture (BC yield) Obs Refs
PJK (KCTC Glucose Peptone Ethanol 5 30°C 140 h Agitated 4.57 g  L−1 Best result with [33]
10505BP) (1% w/v) (1% w/v); (1% v/v) (jar-fermenter with aeration 1 vvm
yeast ex- spin filter)
tract (0.7%
w/v)
RKY5 (KCTC Glucose Peptone — 30°C 96 h Agitated 6.15 g  L−1 [34]
10683BP) (2% w/v) (0.5% w/v); (rotatory biofilm
yeast ex- contactor)
tract (0.5%
w/v)
ATCC10245 Sugar cane Peptone Study of differ- 6 29°C 7 d Static 2.4  g L−1 Best results with [35]
molasses (0.5% w/v); ent component nonsupplement-
(7% w/v) yeast ex- addition (amino ed medium
tract (0.5% acids, vitamins,
w/v) carbohydrates,
minerals, non-
nitrogenous ac-
ids and nucleic
acids bases
K3 Mannitol Corn Steep HS medium; 5 30°C 7 d Static 3.34 g  L−1 Isolated from [36]
(2% w/v) Liquor Green tea Kombucha
(4% w/v) (0.3% w/v)
BPR-2001 Frutose Corn Steep Carboxymethyl 5 30°C 5 d Agitated 8.2  g L−1 Best results with [37]
(ATCC700178) (5% w/v) Liquor cellulose (0–1% (flask fermentation) 10.8% (w/v)
(2% v/v) w/v); microcrys- Carboxymethyl
talline cellulose cellulose
(0.2–0.5%
w/v); agar
(0.2–0.5% w/v);
sodium alginate
(0.2–0.5%
w/v); complex
medium
 Medium Composition Culture Conditions
Carbon Nitrogen Culture Best Results
Strain Source Source Additives pH Temperature Time Type of Culture (BC yield) Obs Refs
ATCC53524 Sucrose Peptone 5 30°C 96 h Static 3.83 g  L−1 [38]
(2% w/v) (0.5% w/v);
yeast ex-
tract (0.5%
w/v)
NBRC 13693 Fruit Juice Peptone Orange; pine- 6 30°C Static 5.8  g L−1 Best results with [39]
(2% w/v); apple; apple; orange juice
yeast ex- Japanese pear;
tract (0.5% grape
w/v)
AGR 60 Coconut Ammonium Acetic acid 30°C 7 d Static — Morphological [40]
water sulfate (1.0% v/v); analyses of the
(sucrose 5% (0.5% w/v) alginate membranes
w/v)
BPR-2001 Frutose Corn Steep Carboxymethyl 5 30°C 120 h Agitated 13.0 g  L−1 Best results [41]
(ATCC700178) (5% w/v) Liquor cellulose (1.5- (2 L PCS bioreac- with 1.5% (w/v)
(2% v/v) 2.0% w/v); com- tor) Carboxymethyl
plex medium cellulose
BCRC12335) Mannitol Peptone Carboxymethyl 30°C 14 d Static — Water holding [42]
(2.5% w/v) (0.3% w/v); cellulose (0–1% capacity and
yeast ex- w/v) crystallinity
tract (0.5% improved with
w/v) carboxymethyl
cellulose
ATCC53524 Mannitol Peptone 5 28°C 7 d Static 18 g  L−1 [43]
(5% w/v) (0.3% w/v);
yeast ex-
tract (0.5%
w/v)
206  Chapter 12

This chapter thus aims to address an open question regarding the production costs of BNC,
as obtained through “modern” (biotechnological) processes. As a starting point in obtaining
a cost estimate, a computer simulation of BNC production under static culture conditions
was performed here. The first section of this chapter will be devoted to an overview of the
cost structure involved in a plant process design. This will be followed by a description of the
software simulation of BNC production, associated costs, and feasibility analysis.

Process Simulation Software

The development of a complete plant design involves several distinct and complex
considerations such as plant location and layout, availability of raw materials, materials of
construction, structural design, utilities, buildings, storage, materials handling, safety, waste
disposal, taxations, patents, transportation, and markets. There are several approaches for
making preliminary estimates of plant cost and process design. Process simulation software
has been used since the early 1960s, to first emulate industrial processes, operating under
continuous transient behavior. The evolution of information technology and in modeling
and simulation technology strongly impacted on process engineering. Current software
can be used to modulate chemical/biochemical, pharmaceutical, food manufacturing, and
bioprocesses. These simulators can represent an entire industrial process on the computer,
perform material and energy balances, allow to estimating the size of equipment, calculating
the demands for labor and utilities over time, performing cost analysis, and assessing the
environmental impact of a given industrial process. Also, these commercial tools contain
extensive databases with specifications on the materials of construction, suppliers, and
estimated prices. Early-stage cost estimation plays a critical role in both rising as well as
already established companies in assessing the need for financial investment in a given
process or unit procedure. However, it is also important to bear in mind that at such early
stage of development, cost simulations may yield an overestimated capital investment by
up to 50% of the final investment (the contractor’s estimate): most of the economic data
available in the process simulation software are based on price indexes at a given year of
data acquisition; to account for the time value of money, these indexes are adjusted through
specific mathematical functions, to provide updated price estimations of equipments,
buildings, labor, etc. However, these indexes should be regarded only as general price
estimates [44–46].

Cost Estimations
The net profitability, briefly described as the total income minus total expenses, and the business
sustainability, are the key drivers of any plant design simulation, and ultimately condition the
decision of investing in the construction of a new processing plant, or expanding or modifying
an existing one. The assessment, procurement, and proper allocation of capital investment must
 Process Modeling and Techno-Economic Evaluation  207

thus be made in any project design. The total capital investment required to set up a project
includes two major components: fixed capital investment and working capital. The first
component, which can be further divided into direct and indirect costs, briefly corresponds to
the capital necessary to construct a ready-to-work processing plant; this involves buildings,
equipment, machinery, land, and associated construction expenses. The working capital
corresponds to the additional necessary investment, above the fixed capital, to start and maintain
the operation process, especially during the first months (or years) of plant activity. This capital
allows to cover for salaries, utility bills (such as electricity or gas, fuels), raw materials, and
other supplies. Due to its specific purpose (ensuring liquidity of the firm for a certain period),
working capital is included as the second component of the total capital investment.
Along with capital investment, an estimation of the operating costs (or production costs)
must also be made. These costs, further divided into direct production costs, fixed charges,
and general expenses, represent the expenses incurred during plant operation and product
selling and are usually expressed on an annual basis. These expenses include, for example,
raw materials, labor, transportation, and other miscellaneous operations, utilities, royalties,
research & development, financing, advertising, administrative services, and product disposal
[46,47]. Further details on the cost structure will be provided below, along with the economic
analysis of the BNC production simulation.

Process Simulation: Bacterial NanoCellulose Production

For this study, a survey of the literature was first conducted, to gather information on the
type of strains, CM, and fermentation conditions. Table 12.1 summarizes the collected data.
For the simulation of the biotechnological BNC production, the starting point and criteria of
choice were the selection of one publication demonstrating the use of a commercial acetic
acid bacterium strain that exhibited good comparative yields, while using, totally or partially,
low cost substrates. The use of a commercial strain allows to obviating regulatory issues
when considering the implementation of an industrial (commercial) bioprocess; regarding
the fermentation method, static culture was selected to better approximate this study to the
production of nata de coco; as for the CM, low cost substrates, mostly from the food industry
have been widely explored in several biotechnological processes, to lower production costs,
and were chosen for this study. Among the several existing possibilities (Table 12.2), the
paper from Keshk et al. [31] was selected to retrieve the relevant data. Briefly, BNC was
produced from beet molasses using Komagataeibacter xylinus ATCC 10245; from the
fermentation experiments with beet molasses, BNC yield was calculated to be of 7 g L−1 (dry
mass), following a 7-day static culture fermentation process. The composition of the CM, as
extracted from the manuscript [31] is shown in Table 12.2.
The conceptual project and economic analysis of BNC fermentation was done using Super-
Pro Designer software, version 9.0, for Windows operating system. The plant was arbitrarily
208  Chapter 12

Table 12.2: Composition and estimated purchase prices of the main raw
materials for BNC production
Stock (g/L) Density (kg/L) Culture Media (g/L) Price (USD$/Tona)
Beet molasses 570 1.2 20 200.00
Yeast extract 1.5 5 2,000.00
Peptone 20 7,945.00
Disodium phosphate 2.7 500.00
Citric acid 0.8 1.2 500.00
Water 1 2.50
Downstream washing
NaOH 10 2000
a
An average price of the stock components was calculated on the basis of the values from different suppliers and literature.

Figure 12.1: Super-Pro process flowsheet of the fermentative production of bacterial cellulose.

projected to process 60,000 L month−1 of CM. Assuming hydrated BNC contains 99% water,
this production volume would yield 42 tons month−1, that is, 504 ton year−1 of BNC. Fig. 12.1
displays a flowsheet of the BNC fermentation process as retrieved from the software.
Table. 12.3 describes the main equipment (type and number of used equipments, their size,
and cost).
Inoculum propagation is widely reported to be achieved by successive propagation of biomass
and CM at a ratio of 1:10 (biomass:CM), as used in this work. For the sake of simplicity,
propagations below 100 L were omitted in the design, as these can easily be done at
 Process Modeling and Techno-Economic Evaluation  209

Table 12.3: Equipment specifications and costs (2015 prices)

Purchase Cost
Name Type Units Size (Capacity) (US$ unit)
V-101 Blending tank 3 4,111.11 L 248,000
SBR-100L Seed bioreactor 1 137.60 L 521,000
SBR-1000L Seed bioreactor 1 1,389.97 L 1,280,000
Cleanroom Generic box 2 12,340.29 L 500,000a
PZ-101 Pasteurizer 1 20,012.85 L  h−1 81,000
FL-101 Filler 1 414.96 units  h−1 25,000
BX-101 Packer 1 41.50 unit h−1 20,000
GR-101 Grinder 1 10,122,21 kg  h−1 122,000a
FSP-101 Flow splitter 1 11,051.61 kg  h−1 1,000a
PZ-102 Pasteurizer 1 2,775.00 L h−1 31,000
WSH-101 Washer (bulk flow) 2 10,122.21 kg  h−1 20,000a
Unlisted equipment 966,000
Total 4,831,000
a
Estimate costs obtained from local companies. Remaining price estimates were provided by Super-Pro simulation software.

laboratory scale (the inoculum from ATCC 10245 could then be transferred to the 100 L seed
fermenter). As such, two seed fermenters with 100 (SBR-100 L) and 1000 L (SBR-1000 L,
Fig. 12.2) capacities were considered for biomass growth (Fig. 12.2, “Inoculum Propagation”
stage). Also, a simplified version of the culture CM preparation and pasteurization was
chosen. For academic purposes, a single entry containing the mixture of the CM components
was fed to a storage tank (V-101) before pasteurization (PZ-101). The pasteurized CM is then
sequentially fed to each of the seed fermenters. Each seed fermenter operates for 3 days. The
bacteria and additional pasteurized CM (up to a total volume of 10,000 L) are then combined
and transported to a “cleanroom” for the fermentation under static conditions. This generic
unit represents a controlled environment room with minimum level of pollutants, operating at
30 °C for 7 days, to simulate static culture conditions. Two clean rooms were considered for
this process (Fig. 12.2 and Table. 12.1. for a description of the equipments) as explained: the
static culture step (“Cleanroom-10,000,” Fig. 12.2a) is the dominant scheduling bottleneck of
the entire process, that is, its occupation time per batch exceeds any other equipment in the
process, thus leading to large plant cycle times (roughly 10 days, Fig. 12.2a). By including
an additional cleanroom operating in staggered mode (“STG01 Cleanro,” Fig. 12.2b), lower
production cycle times can be obtained (roughly 5 days). This allows to increase from 41 to
81 batches year−1.
Upon fermentation, the resulting BNC sheets are collected, cut into cubes (GR-101), and
washed with NaOH and water (WSH-101). The cubes are then packed (in plastic bags and
cardboard boxes; FL-101 and BX-101) and stored (“Downstream Processing” stage).
Based on the inserted data (regarding unit operations, reaction kinetics, raw materials, etc.),
Super-Pro Designer can estimate the equipment size and cost (Table 12.3) by using built-in
210  Chapter 12

Figure 12.2: Equipment utilization chart of the simulated BC fermentation process.

(A) Multiple batches operation with one cleanroom; (B) multiple batches operation with two
cleanrooms, one of which is in “staggered mode” (“STG01 Cleanro”).
 Process Modeling and Techno-Economic Evaluation  211

cost correlations from data derived from a number of vendors and literature sources (data
from some of the equipments were obtained from direct contact with several companies as
these were not available in Super-Pro). The total cost of the equipment is of US$ 4.83 million.
Table 12.4 summarizes the resulting estimation of the capital investment costs, operating
costs, and profitability analysis of the BNC fermentation process simulation. Some of the
financial data were calculated based on information outlined by Peters and Timmerhaus
[46]. The total capital investment (TCI) for an industrial facility capable of producing
504 tons year−1 of BNC was estimated to be of near US$ 13 million; near 71% of which
correspond to direct costs (DC) from equipment and installation, piping, instrumentation,
insulation, electrical facilities, building costs, yard improvements and auxiliary facilities,
and land. Indirect costs (29% of the TCI) consist of engineering and construction costs.
Contingency charges (US$ 966,199.99) are extra costs added into a project budget to
accommodate for variations in the cost estimates. These allow to compensating for
unpredictable expenses, minor process changes, price fluctuations, and estimating errors.
The annual manufacturing (product or production) costs (TPC), totaling US$ 7.4 million
include elements that contribute directly to the cost of production (such as direct operating
costs, fixed charges, and plant overhead costs), and general expenses. Operating labor (with
58%) is the most representative of the direct production costs (which total US$ 2.18 million).
Fixed charges, totaling US$ 2.1 million, relate to the physical plant in itself, thus unaffected
by the productivity levels. These include depreciation, local taxes, insurances, and rent.
Depreciation (70% of the fixed charges) is a time-dependent operating cost representing a
fixed capital loss mostly due to equipment and facilities wear out and obsolescence. Plant
overhead costs (little over US$ 1 million) includes charges for services not attributable to
the cost of the product, such as medical service, safety and protection, storage facilities,
plant superintendence, cafeteria, janitorial services, administrative and accounting services,
etc. The general expenses (US$ 2 million) cover the management costs and to develop
new processes (Research & Development). Administrative costs include salaries for
administrators, accounting, legal support, and computer support, as well as office supply and
equipment, administrative buildings, etc. The sum of the manufacturing costs, MC [73% of
the total product manufacturing costs (TPC)] and general expenses, GE (27% of the TPC)
make up the TPC (US$ 7.4 million).
Based on the above capital expenses, profitability analysis was done considering a market
price for BNC at US$ 25 kg−1 (corresponding to packed BNC cubes as the final selling
product). The resulting net profit amounts to US$ 3.3 million  year−1. The return on
investment (of 10%) is the ratio of profit to investment and measures how effectively a
company converts the invested capital into profit (i.e., it represents the return per dollar
invested). Finally, the payback period, representing the length of time necessary to recover
the capital investment, was calculated to be of 4 years.
212  Chapter 12

Table 12.4: Cost structure (in US$) and profitability analysis of the BC fermentation process
Estimation of Capital Investment Cost
Direct costs (DC) 9,178,799
  Purchased equipment (PE) 4,831,000
  Installation, including insulation and painting 828,171
  Instrumentation and controls 552,114
 Piping 690,142
 Electrical 483,000
  Buildings, process, and auxiliary 690,142
  Service facilities and yard improvements 276,057
 Land 828,171
Indirect costs (IC) 2,070,428
  Engineering and supervision 579,719
  Construction expense and contractor’s fee 552,114
 Contingency 966,199
Fixed capital investment (FCI) 11,276,834
Working capital (WC) 1,691,525
Total capital investment (TCI) 12,968,359
Estimation of the Annual Product Manufacturing Cost
Manufacturing costs (MC) 5,390,511
  Direct production cost (variable costs) 2,184,022
  Raw materials 169,280
  Operating labor (OL) 1,269,130
  Direct supervisory and clerical labor (DS & CL) 222,097
  Utilities (electricity, steam, chilled water) 80,000
  Maintenance and repairs (2–10% FCI) 338,305a
  Operating supplies (0.5–1% FCI) 84,576a
  Laboratory charges (10–20% OL) 126,913a
  Fixed charges 2,108,768
  Depreciation (13% FCI machin. & equip. + 2–3% FCI buildings) 1,465,988a
  Local taxes 281,920a
 Insurances 281,920a
  Plant overhead costs (50–70% OL, DS, & CL, and M & R) 1,097,720
General expenses (GE) 2,023,417
  Administrative costs (2–6% of TPC) 440,000a
  Distribution and selling costs (2–20% of TPC) 385,000a
  Research and development costs (5% of TPC) 550,000a
  Financing (interest) (0–10% TCI) 1,584,551
Total product cost (TPC): MC + GE 7,413,928
Profitabilitya (504,000 kg year−1, at a selling price of US$ 25 per kg−1)
  Total income: selling price  × quantity of product 12,600,000
  Gross income: total Income − total product cost 5,079,790
  Taxes: 30–40% gross income 1,777,926
  Net Profit: gross income − taxes 3,301,863
  Rate of return: net profita100/TCI 10%
  Payout period: FCI/(net profit + depreciation) 4  Years
a
Calculated as described in Ref. [46].
 Process Modeling and Techno-Economic Evaluation  213

Concluding Remarks
In many developing countries, village-art methods have been used for the bacterial cellulose
production, resulting in low product yields and quality. The need to upgrade the art of
traditional fermentation of BNC has been long recognized. Ever since its discovery, BNC
has been gaining significant attention from academia and industry in various research
fields, which suggests that potentially market segments are indeed waiting for a “new
product” (i.e., new properties) to be widely available. However, biotechnological processes
can only be realized upon controlling several operating parameters (such as fermentation
time, temperature, pH, substrate pretreatment, inoculum-substrate ratio, etc.). Extensive
efforts have been devoted to determine the scientific and technological factors mediating
BNC production. As observed in this chapter through process simulation, biotechnological
processes are highly capital-intensive as compared with traditional methods. Coupled to the
low BNC yields, and despite the use of low cost substrate in this simulation, the high capital
investment and high operating costs associated, present a strong economic constraint to the
commercialization of BNC at a “low” cost (as compared to nata de coco). Data here gathered
showed that, although it is possible to devise an economically feasible biotechnological
process for BNC production, the high selling costs would indeed restrain BNC to high-value
niche markets.

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