DEPARTMENT TECHNOLOGY OF CIVIL ENGINEERING

UNIVERSITI MALAYSIA PAHANG

TITLE: CETHYL ALCOHOL FROM PALM OIL

LECTURER : DR. SUMAIYA BINTI ZAINAL ABIDIN @ MURAD

SECTION : 02

STUDENT NAME STUDENT ID

MUHAMMAD NAZREEN BIN ZAINUDIN AA21140

JESSICA CINDY ANAK JARRY AA21141

FATEN FARHANIM BINTI NORAZMAN AA21020

NURNAZIHAH BINTI NORAZREEN AA21014

LOH ZI SHAN AA20178

CHIN SHI YONG AA20179

 TABLE OF CONTENT

CHAPTER 1 INTRODUCTION .................................................................................... 1

1.1 PROJECT BACKGROUND ............................................................................ 1
1.2 PHYSICAL AND CHEMICAL PROPERTIES .............................................. 2
1.3 LITERATURE REVIEW OF PRODUCTION TECHNOLOGY .................... 3
1.4 MARKET SURVEY ........................................................................................ 4
CHAPTER 2 EQUIPMENT COSTS .............................................................................. 6
2.1 BARE MODULES COST VARIOUS EQUIPMENT ..................................... 7
CHAPTER 3 FIXED CAPITAL INVESTMENT COST ............................................... 9
CHAPTER 4 MANUFACTURING COST .................................................................. 11
3.1 LABOR COST (CUT) ..................................................................................... 11
3.2 RAW MATERIAL COST (CRM) ................................................................... 12
3.3 UTILITIES COST (CUT) ................................................................................ 13
3.4 TOTAL MANUFACTURING COST (COM) ............................................... 20
3.5 SALES REVENUE ........................................................................................ 21
CHAPTER 5 CASH FLOW ANALYSIS ..................................................................... 22
3.1 CASH NON-DISCOUNTED CASH FLOW ANALYSIS ............................ 23
3.2 CUMULATIVE DISCOUNTED CASH FLOW ANALYSIS ...................... 24
CHAPTER 6 FINANCIAL RATIOS (PROFITABILITY ANALYSIS) ..................... 28
6.1 OPERATING MARGIN ................................................................................ 28
6.2 GROSS PROFIT MARGIN ........................................................................... 29
6.3 NET PROFIT MARGIN ................................................................................ 29
6.4 RATE OF RETURN ON INVESTMENT ..................................................... 30
CHAPTER 7 SUMMARY ............................................................................................ 30
CHAPTER 8 REFERENCES........................................................................................ 31
APPENDIC:EQUIPMENT COST ................................................................................ 32
1.0 Introduction
1.1 Project Background

Cetyl alcohol, also known as 1-hexadecanol or n-hexadecyl alcohol, is

a type of fatty alcohol derived from Palm Oil and Palm Kernel Oil. It can be
produced from the reduction of palmitic acid. Cetyl alcohol is present in a waxy
white powder or flake form at room temperature and is insoluble in water and
soluble in alcohols and oils.

Cetyl alcohol was discovered by Chevrenl in 1913, cetyl alcohol is one

of the oldest known long-chain alcohol. It may be contained in cosmetic and
personal care products such as shampoos, creams, and lotions. Mainly it is used
as an opacifier, emulsifier, and thickening agent that alters the thickness of the
liquid and increases and stabilizes the foaming capacity. Due to its water-
binding property, cetyl alcohol is commonly used as an emollient that prevents
drying and chapping of the skin. According to the FDA Code of Federal
Regulations, cetyl alcohol is a safe synthetic fatty acid in food and in the
synthesis of food components under the condition that it contains not less than
98 percent of total alcohols and not less than 94 percent of straight chain
alcohols. Cetyl alcohol is also listed in the OTC ingredient list as a skin
protectant for skin irritations caused by poison ivy, oak, sumac, and insect bites
or stings. Cetyl alcohol is reported to be a mild skin or eye irritant.

Figure 1.1.1: Cetyl Alcohol

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1.2 Physical and Chemical Properties

Cetyl alcohol is colorless and has the semi-transparency of wax; at

ambient temperatures, it is solid and does not mix with water. However, floats
on water. The appearance of Cetyl Alcohol is a white waxy flake or crystals
with a mild fatty odor. Practically insoluble in water and Soluble in alcohol,
chloroform, and ether. Available as technical, and cosmetic grades.

Figure 1.2.1: Physical and Chemical Properties of Cetyl Alcohol

Figure 1.2.2: Chemical Structure of Cetyl Alcohol

1.3 Literature Review of Production Technology

Cetyl alcohol is manufactured by reducing ethyl palmitate (the waxy

ester of palmitic acid) with metallic sodium and alcohol or under acidic
conditions with lithium aluminum hydride as a catalyst. The final product melts
at a temperature higher than that of the human body, which makes it useful for
makeup and other things that are warmed by the skin. Cetearyl alcohol acts as a
moisturizer by helping bind moisture to the skin. It is a fatty alcohol and can
also act as an emulsifier, giving proper texture products. In addition, it can be
an emollient, keep things from separating, control how thick or runny a product
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 is, act as a coupling agent, and even stabilize foams. Cetyl alcohol is soothing
for the skin and is one of the most non-toxic skincare ingredients available.

The method of making cetyl alcohol consists of the saponification of

spermaceti in ethylene glycol in a stainless steel still provided with mechanical
agitation. Potassium hydroxide is dissolved in it, followed by the introduction
of the wax. Heat is applied and the glycol is distilled off at atmospheric pressure,
during which the spermaceti is completely converted. A vacuum is then applied
to the still and the distillate is chilled and pressed, yielding the theoretical
amount of pure cetyl alcohol, the entire process requiring but a few hours. Also,
there is a method of producing cetyl alcohol which consists in hydrolyzing 100
grams of spermaceti in 100 ccs. of ethyl alcohol with about 12 grams of caustic
alkali in about 10 cc. of water, diluting the mixture with cc. of alcohol and 200
cc. of water, extracting with petroleum ether and adding sufficient alcohol to
prevent the formation of gels or slow-breaking emulsions.

Figure 1.3.1: Cetyl Alcohol Molecul

1.4 Market Survey

The rise in the personal care industry is likely to expand the market for
cetyl alcohol, as it is being used to help soften the skin and hair and to thicken
and stabilize cosmetics products, such as lotions and hair products. It acts as an
emollient, which is considered to be an effective ingredient for soothing and
healing dry skin. Cetyl alcohol is used in various applications such as food,
cosmetics, pharmaceutical, chemical, and material industry, etc. The Global
cetyl alcohol market is segmented by testing type, application, and geography.

3
By testing type, the market is segmented into physical, chemical, and
microbiological. By application, the market is segmented into the food and
beverage industry, cosmetics industry, and pharmaceutical industry. On the
basis of geography, the study provides an analysis of the cetyl alcohol market
in emerging and established markets across the globe, including North America,
Europe, Asia-Pacific, South America, and Middle East & Africa. For each
segment, the market sizing and forecasts have been done on the basis of value
(in USD million).

In the cosmetics industry, cetyl stearyl alcohol plays a crucial role. They
work as a thickener, emulsifier, carrying agent, and emollient for other
constituents contained in a cosmetic solution. The hair-related issues tackled by
most consumers, like baldness, hair loss, and dandruff. This led to the global
utilization of hair care products as the cetyl alcohol is added as a thickening
agent and is a major component of hair conditioner where it helps the water and
oil in the conditioner to mix together. The oil-based and water-based
components in the conditioner would remain as emulsions without the presence
of cetyl alcohol. Cetyl also softens the skin hence used in anti-aging creams and
moisturizers. Manufacturers use cetyl alcohol in soap, as it is naturally derived
alcohol from coconut and palm and consists primarily of cetyl and stearyl
alcohols from plant oils. Moreover, when added to soap, it acts as a lather
stabilizer and extends the life of the lather. It also increases the rate of lather
formation and produces a very creamy and softening bar due to its moisturizing
properties, even with soaps that have a more bubbly or cleansing lather. The
cetyl alcohol market's major boosting factors are projected due to rising income
in emerging economies and the increasing demand for personal care and beauty
products.

4
 Figure 1.4.1: Cetyl Alcohol Market: Breakdown Of The Cosmetic
Market, By Product Category, Global, 2017-2021

Figure 1.4.2: Cetyl Alcohol Market: Market Share, in % By region,

Global, 2021

Nonetheless, according to Volza's Malaysia import data, there were 61

Cetyl alcohol pastilles import shipments in Malaysia, imported by 7 Malaysia
Importers from 5 Suppliers. Malaysia imports the majority of its Cetyl alcohol
pastilles from Indonesia, Singapore, and India, making it the world's largest
importer of Cetyl alcohol pastilles. Malaysia is the top importer of Cetyl
alcohol pastilles, with 61 shipments, followed by with 0 shipments in third
place. The top three product categories of cetyl alcohol pastilles imports in
Malaysia are as follows:

I. HSN Code 38237090: HS: industrial fatty alcohols: Other

II. HSN Code 29051700: HS: octanol (octyl alcohol) and isomers
thereof: dodecane-1-ol (lauryl alcohol) hexadecane-1-ol (cetyl
alcohol) and octadecan-1-ol (stearyl alcohol)

5
 III. HSN Code 380036: 380036

2.0 Equipment Cost

The capital cost of a chemical plant can be estimated using known costs for key
plant equipment. Two factors influence the cost of purchased equipment which are
capacity and time. According to Charles Maxwell, the Chemical Engineering Plant Cost
Index (CEPCI) FOR 2001 IS 394.3, while the CEPCI for 2022 (September) is 821.1.
The following formulas are used to calculate the expenses of purchases of equipment.

Purchased cost equation:

log10Cp0 = K1+K2log10(A) + K3 [log10(A)]2

where, Cp0 = Purchased cost

K = Equipment cost data

A = Capacity or size parameter for the equipment

Estimation of bare module cost:

CBM = Cp0FBM = Cp0 (B1 + B1FPFM)

where, CBM = Bare module cost

CP0 = Purchased cost

FBM = Bare module cost

FM = Material factor

FP = Pressure factor

Pressure factor equation:

log10Fp = C1 + C2 log10(P) + C3 [log10(P)]2

where, C = Purchased cost 1 = Base time when cost is known

6
 I = Cost Index 2 = Current time when cost is desired

There is several equipment involved in this project such as distillation column,

heat exchanger, pumps, reactor and so on. Cost of equipment needs to be calculated
with detailed calculations shown in the appendices and summarized as below.

2.1 Bare Module Cost Various Equipment

Equipment Identification C BM,2001 (RM) CBM,2022 (RM)

Type No.

Vessel Tray

Distillation T – 101 313103.22 3415.40 659126.13

column
T – 102 53695.84 2425.69 116868.85

T – 103 66813.34 2642.97 144637.53

T – 104 142306.19 2642.97 301845.69

T – 105 107184.25 3136.94 229735.54

T – 106 28710.80 1459.82 62828.04

Heat E – 101 264846.72 551523.31

Exchanger

E – 102 84838.57 176669.93

E – 103 234977.15 489322.19

E – 104 98774.15 205689.46

E – 105 106350.71 221467.33

E – 106 88004.73 183263.21

7
 E – 107 98518.91 205158.20

Pump P – 101 27532.42 114668.36

P – 102 14606.01 60831.82

P – 103 16492.80 68690.01

Flash Column V – 101 24579.32 51184.58

V – 102 18414.84 38347.52

Mixer M – 101 693.68 1444.54

M – 102 655.63 1365.30

M – 103 655.51 1365.06

Compressor C – 101 2885755.19 6009367.46

Reactor R – 101 5408.71 11263.23

R – 102 12607.01 26253.15

R – 103 8116.29 16901.56

TOTAL (RM) 9949818

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 The capital cost of Grass Root is shown below.

Item Cost (RM)

Total bare module cost, C BM 9949818

Total module cost, C TM 11740785.24

Grass root capital, C GR 16745694.24

CTM = 1.18 CBM,i

= 1.18 (RM 9949818)

= RM 11740785.24

CGR = CTM + 0.50 CBM,i

= RM 11740785.24 + 0.50 (RM 9949818)

= RM 16715694.24

3.0 Fixed Capital Investment Cost

The capital required for the installed process equipment that contains all of the
components required for the complete operation of the process is known as
manufacturing fixed-capital investment. Preparation of the site, piping, instruments,
insulation, foundations and other auxiliary facilities are just some of the costs associated
with manufacturing fixed-capital investments. The capital required for construction
overhead and all plant components that are not directly related to the process's operation
is called non-manufacturing fixed capital investment. The land processing buildings,
offices, transportation, shipping, utility, waste disposal facilities, shops, and other
permanent plant parts are examples of these plant components.

The amount of capital required to start the plant and finance the start of the
operation is known as working capital. Normally, the functioning capital is utilized to
pay compensations, natural substance inventories. Also, different possibilities. Since,

9
working capital is fully recoverable, it cannot be depreciated. The working capitals
typically represent between 15% and 20% of the investment in fixed capital.

Total capital investment = Fixed Capital Investment + Working Capital

From previous calculations of the equipment cost,

Fixed capital investment (FCI) = CGR = RM 16715694.24

Total capital investment (TCI) = Fixed capital investment + 15% of fixed Capital
Investment

= RM 16715694 + (0.15)(RM16715694.24)

= RM 19223048.38

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4.0 Manufacturing Cost

Manufacturing costs are the expenses incurred during a product’s production.

These expenses include direct material, direct labor, and manufacturing overhead.
Costs are typically presented as separate line items on the income statement. These
expenses are incurred by an entity during the manufacturing process. The materials
used in the construction of a product are referred to as direct materials. Direct labor is
the portion of the production process's labor cost that is assigned to a unit of production.
Manufacturing overhead costs are applied to units of production in a variety of ways,
including direct labor hours or machine hours incurred. Examples of costs that can be
included in manufacturing overhead include:

i. Salaries and wages for quality assurance, industrial engineering,

material handling, factory management, and equipment maintenance
personnel.
ii. Equipment repairs parts and supplies.
iii. Factory utilities.
iv. Depreciation on factory assets.
v. Factory-related insurance and property taxes.

When determining the monetary value inputs, manufacturing costs are

considered in order to determine the most efficient method of the total cost of
production. Total Manufacturing Cost (COM), Direct Manufacturing Cost (DMC),
Fixed Manufacturing Cost (FMC), and General Expenses are examples of
manufacturing costs (GE). Labor Cost (COL), Raw Material (CRM), and Utilities Cost
(CUT) are calculated first to determine the cost of manufacturing.

4.1 Labor Cost (COL)

Employers’ total expenditure for employee employment is represented

by labor costs. They represent the cost of salaried labor, which is why they are
also known as salary costs. The following is an estimate of the labor costs for
the production plant:

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 Equipment Type Quantity Operators per Operator
equipment per
shift
Reactor 3 0.50 1.50
Distillation 6 0.35 2.10
column
Compressor 1 0.15 0.15
Mixer 3 0.00 0
Heat Exchanger 7 0.10 0.70
Flash column 2 0.35 0.70
Valve 3 0.00 0
Total 5.15
Table 4.1.1: Required Operator for labor cost

The required operator is approximately 5.15 operators employed

required in the plant. Based on the year 2022 salary for an operator, the average
salary is RM2900.00. Therefore, the calculation for labor cost is follows as:

= (Overall operator per equipment per shift) x (Operators are hired for each
operator)
= 5.15 x 4.5
=23.18 ≈ 23 operators

COL = (number of operators) x (salary per year)

= (23 operators) x (RM2900.00 x 12 months)

= RM800400.00

4.2 Raw Material Cost (CRM)

The cost of raw materials is the cost of cetyl alcohol production

including water. Raw material prices are affected by supply and demand, so
businesses should keep this in mind when making purchases. Therefore, assume
the cost per unit as below:

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 Raw Material Cost (RM/MT) Flowrate (kg/hr) Yearly Cost
(RM/y)
Cetyl Alcohol 429.24 1250.0013 4465173.60
Water 36.00 39.06 11702.10
Total Raw Material (CRM) 4476875.70
Table 4.2.1: Cost of Raw Material

i. Cetyl alcohol

Flowrate = (1250.0013kg/hr) x (1MT/1000kg) x (8760hr/1y)

= 10950.011 MT/y

Yearly Cost = (10950.011MT/y) x (345/365) x (RM429.24/MT)

= RM 4465173.60/y

ii. Water

Flowrate = (39.06kg/hr) x (1MT/1000kg) x (8760hr/1y)

= 342.166 MT/y

Yearly Cost = (342.166 MT/y) x (345/365) x (RM36.00/MT)

= RM 11702.10/y

4.3 Utilities Cost (CUT)

The cost of using utilities such as electricity, water, waste disposal,

heating, fuel, and sewage is referred to as utility expense. Expenses are incurred
during the reporting period, calculated, and accrued for or payment is made.
This project is to calculate the utility cost of steam, cooler water, electricity, and
fuel to estimate the chemical plant's total utility cost.

13
i. Steam

Process steam is a heat transfer medium and a source of process heat in

chemical plants. Large pipelines are used to distribute the steam, which
is produced centrally, to other areas of the facility.

Equipment Mass Yearly Cost, Yearly cost,

Flowrate, Flowrate, RM/MT RM/y
kg/hr MT/y
E-101 (hps) 4017.35 35191.99 131.93 4410735.30
E-103 (lps) 4656.13 40786.56 121.94 4724837.47
E-105 (lps) 4446.00 38946.96 121.94 4511732.70
Total Steam 13647305.47
Table 4.3.1: Steam total for plant

E-101 (hps)
Yearly Flowrate = (4017.35kg/hr) x (1MT/1000kg) x (8760hr/y)

= 35191.99 MT/y

Yearly cost = (35191.99MT/y) x (345/365) x (RM 131.93/MT)

= RM 4410735.30/y

E-103 (lps)
Yearly Flowrate = (4656.13kg/hr) x (1MT/1000kg) x (8760hr/y)

= 40786.56MT/y

Yearly cost = (40786.56MT/y) x (345/365) x (RM 121.94/MT)

= RM 4724837.47/y

E-105 (lps)
Yearly Flowrate = (4446.00kg/hr) x (1MT/1000kg) x (8760hr/y)

= 38946.96MT/y

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 Yearly cost = (38946.96MT/y) x (345/365) x (RM 121.94/MT)

= 4511732.70/y

ii. Cooler Water

The most widely employed cold resource to reduce the process stream’s
high temperature is cooling water. Additionally, cooling water can be
utilized for cleaning. Specialized heat exchangers called cooling towers
lower the temperature of water by exposing it to air. Through pipes,
warm water from an industrial operation is sent to the cooling tower.

Equipment Mass Yearly Cost, Yearly cost,

Flowrate, Flowrate, RM/MT RM/y
kg/hr MT/y
E-102 4017.37 35192.20 65.15 2178130.80
E-104 4656.23 40788.28 65.15 2524488.62
E-106 4446.36 38950.11 65.15 2410719.68
E-107 1463.17 12817.37 65.15 793299.02
Total Cooler Water 7906638.12
Table 4.3.2: Total Cooling Water for the plant

E-102
Yearly Flowrate = (4017.37kg/hr) x (1MT/1000kg) x (8760hr/y)

= 35192.20MT/y

Yearly cost = (35192.20MT/y) x (345/365) x (RM 65.15/MT)

= 2178130.80/y

E-104
Yearly Flowrate = (4014656.23kg/hr) x (1MT/1000kg) x (8760hr/y)

= 40788.28MT/y

Yearly cost = (40788.28MT/y) x (345/365) x (RM 65.15/MT)

15
 = 2524488.62/y

E-106
Yearly Flowrate = (4446.36kg/hr) x (1MT/1000kg) x (8760hr/y)

= 38950.11MT/y

Yearly cost = (38950.11MT/y) x (345/365) x (RM 65.15/MT)

= 2410719.68/y

E-107
Yearly Flowrate = (1463.17kg/hr) x (1MT/1000kg) x (8760hr/y)

= 12817.37MT/y

Yearly cost = (12817.37MT/y) x (345/365) x (RM 65.15/MT)

= 793299.02/y

iii. Electricity

Electric is utilized to power a variety of equipment used in chemical

plant operations, including mixers, pumps, fans, compressors,
conveyors, and others. Additionally, instruments and control systems
monitor, regulate, and guarantee the safety of operations. Electricity is
used for numerous maintenance tasks and for several heating functions
as well.
Equipment Power, Yearly Cost, Yearly cost,
kW Power, RM/kWh RM/y
kWh/y
P-101 7.506 65752.56 0.26 16240.88
P-102 0.1253 1097.63 0.26 271.11
P-103 0.0779 682.40 0.26 168.55
M-101 489.6281 4289142.16 0.26 1059418.11
M-102 628.919 5509330.44 0.26 1350804.62

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 M-103 629.4447 5513935.57 0.26 1361942.09
C-101 5239.90 45901524 0.26 11337676.43
Total Electricity 15126521.49
Table 4.3.3: Total electricity of the plant

P-101
Yearly Flowrate = (7.506kW) x (8760hr/1y)

= 65752.56kWh/y

Yearly cost = (65752.56kWh/y) x (345/365) x (RM0.26/kWh)

= RM 16240.88/y

P-102
Yearly Flowrate = (7.506kW) x (8760hr/1y)

= 1097.63kWh/y

Yearly cost = (1097.63kWh/y) x (345/365) x (RM0.26/kWh)

= RM 271.11/y

P-103
Yearly Flowrate = (0.0779kW) x (8760hr/1y)

= 682.40kWh/y

Yearly cost = (682.40kWh/y) x (345/365) x (RM0.26/kWh)

= RM 168.55/y

M-101
Yearly Flowrate = (489.6281kW) x (8760hr/1y)

= 4289142.16kWh/y

Yearly cost = (4289142.16kWh/y) x (345/365) x (RM0.26/kWh)

17
 = RM 1059418.11/y

M-102
Yearly Flowrate = (628.919kW) x (8760hr/1y)

= 5509330.44kWh/y

Yearly cost = (5509330.44kWh/y) x (345/365) x (RM0.26/kWh)

= RM 1350804.62/y

M-103
Yearly Flowrate = (629.4447kW) x (8760hr/1y)

= 5513935.57kWh/y

Yearly cost = (5513935.57kWh/y) x (345/365) x (RM0.26/kWh)

= RM 1361942.09/y

C-101
Yearly Flowrate = (5239.90kW) x (8760hr/1y)

= 45901524kWh/y

Yearly cost = (45901524kWh/y) x (345/365) x (RM0.26/kWh)

= RM 11337676.43/y

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iv. Fuel

Fuel is a combustible material that primarily contains carbon. Fuel

releases a significant amount of energy in the form of heat and light upon
proper combustion in the presence of air. Fuels can be divided into
various categories, such as natural and synthetic fuels. Massive amounts
of energy are produced by fuels, and this energy is economically
employed for a variety of residential and industrial uses.

Equipmen Volume Residen Yearly Cos Yearly

t , m3 ce Flowrate, t cost, RM/y
Time, h m3/y RM
/ m3
R-101 6.2547 1.42 38587.80 1.85 67818.06
R-102 0.291 0.05 50983.2 1.85 89502.97
R-103 1.423 0.1892 65885.20 1.85 115793.24
Total Fuel 273114.27
Table 4.3.4: Total fuel of the plant

R-101
Yearly Flowrate = (6.2547m3/1.42h) x (8760h/1y)

= 38587.80m3/y

Yearly Cost = (38587.80m3/y) x (345/365) x (RM1.85/m3)

= RM 67818.06/y

R-102
Yearly Flowrate = (0.291 m3/0.05h) x (8760h/1y)

= 50983.2m3/y

Yearly Cost = (50983.2m3/y) x (345/365) x (RM1.85/m3)

= RM 89502.97/y

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 R-103
Yearly Flowrate = (1.423m3/0.1892h) x (8760h/1y)

= 65885.20m3/y

Yearly Cost = (65885.20m3/y) x (345/365) x (RM1.85/m3)

= RM 115793.24/y

v. Total Utilities (CUT)

Types of utility Yearly Cost (RM/Y)

Steam 13647305.47
Cooling Water 7906638.12
Electricity 15126521.49
Fuel 273114.27
Total 36953579.35
Table 4.3.5: Utilities cost

4.4 Total Manufacturing Cost (COM)

To determine the contribution cost associated with the manufacturing

process the labor cost, raw material cost, and utility cost are calculated, the
Direct Manufacturing Cost (DMC), Fixed Manufacturing Cost (FMC), and
General Expenses (GE) are also calculated below based on multiplying the cost.

Component Factor Cost (RM/y)

Manufacturing Cost COM = 0.208FCI + 2.73 COL + 56621416.11
(COM) 1.23 (CUT + CWT + CRM)

COM = 0.208 (RM

16715694.24) + 2.73 (RM
800400) + 1.23(RM
36953579.35 + 0 + RM
4476875.70)

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 Direct Manufacturing DMC = CRM + CWT + CUT + 45347012.44
Cost (DMC) 1.33COL + 0.069FCI +
0.03COM

DMC = RM 4476875.70 + 0 +
RM 36953579.35 + 1.33 (RM
800400) + 0.069 (RM
16715694.24) + 0.03 (RM
56621416.11)
Fixed Manufacturing FMC = 0.708COL + 0.168FCI 3374919.83
Cost (FMC)
FMC = 0.708 (RM 800400) +
0.168 (RM 16715694.24)
General Expenses GE = 0.177COL + 0.009FCI + 9351538.63
(GE) 0.16COM

GE = 0.177 (RM 800400) +

0.009 (RM 16715694.24) +
0.16 (RM 56621416.11)
Total Manufacturing Cost (COM) 114,694,887.00
Table 4.4.1: Total of Manufacturing Cost

COM = DMC + FMC + GE

= RM 45347012.44 + RM 3374919.83 + RM 9351538.63

= RM 114,694,887.00

The price of total Manufacturing Cost for this plant is RM 114,694,887.00.

4.5 Sales Revenue

Sales revenue is the money earned from product sales and service
provision; in other words, it is when the products cover all production costs and
begin making money for the company. Profit distributed to owners,

21
 shareholders, and employees as a bonus, or it can be reinvested in the company
to purchase new capital assets and improve technology.

Product Amount (MT/year) Price Total Revenue

(RM/MT) (RM/year)
Cetyl Alcohol 10000 6292.40 62924000.00
Total Sales Revenue 62924000.00
Table 4.5.1: Sales Revenue for Cetyl

5.0 Cash flow Analysis

The cash flow analysis is a form of financial statement that displays and
calculates the amount of money a business earned or spent over a certain time period.
It is a crucial measure of a firm’s financial health since a corporation might record a
profit on its income statement while having inadequate operating cash. It examines a
certain time span for various activities, including operations, investments, and finances.
Cash flow analysis is an excellent approach to monitoring transactions including many
investments and payments made at various periods. In economic analysis, the following
assumptions have been made:

i. The new land required for the plant is purchased at the start of the project
which is assumed to be RM 100 million.
ii. The plant lifetime has been chosen as 20 years where the initial 2 years
are reserved for the start-up of the plant.
iii. As the constructions are finished at the end of the second year, additional
spending for working capital is required to float the first few months of
operation.
iv. The revenue for the first year after start-up is less than 50% of the
subsequent year due to teething problems in the plant.
v. The income tax imposed on this project is 20% of the net profit for the
first 5 years and it increases to 30% for the succeeding years.
vi. The depreciation value follows the straight-line depreciation model for
10 years after the commissioning of the plant.

22
The manufacturing cost without depreciation (COMd) can be obtained by using:

COMd = 0.18 FCI + 2.73 COL + 1.23 (CUT + CWT + CRM)

= 0.18 (RM 16715694.24) + 2.73 (RM 800400.00) + 1.23 (RM 36953579.35 +

RM 0 + RM 4476875.70)

= RM 56153376.67

5.1 Cumulative Non-Discounted Cash Flow Analysis

The cumulative non-discounted cash flow for 30 years of project life is

shown in Figure 5.1 and the detail of the excel calculation will be shown in the
Appendix C. From Figure 5.1, the non-discounted payback period is estimated
to be 15 years after commissioning of plant.

Graph of Cumulative Non-discounted Cash Flow

against Years
1,000,000,000

800,000,000
Cumulative Cash Flow

600,000,000
Payback period = 5
400,000,000

200,000,000

0
0 5 10 15 20
-200,000,000

-400,000,000
Years

Figure 5.1.1: Cumulative non-discounted cash flow along the project life

23
5.2 Cumulative Discounted Cash Flow Analysis

Discounted cash flow is the cash flow analysis, which the yearly cash
flow is discounted back to time zero. Cash flow is multiplied with discount
factor (P/F, I, n) where n is the number of years after the start of the project and
i is the discount rate (Turton, 2013). The discounted cumulative cash flow that
results is then utilized to assess profitability. The cumulative cash flow
discounted (CDCF) at discount rate of 0%, 15%, 20%, 35% and 40% were
tabulated in excel (Appendix C) and plotted in Figure 5.2. The Net Present
Value (NPV) at different discount rate is shown in Figure 5.3. According to the
Figure 5.3, the rate of return is estimated at 20%.

Graph of Cumulative Discounted Cash Flow

Against Years
800,000,000

600,000,000

400,000,000

200,000,000

0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-200,000,000

-400,000,000

-600,000,000

INTEREST = 15% INTEREST = 20%

INTEREST = 35% INTEREST = 40%

Figure 5.2.1: Cumulative discounted cash flow along the project life

24
 Net Present Value at Various Discounted Rate
700,000,000

600,000,000

500,000,000

Net Present Value (RM)

400,000,000

300,000,000

200,000,000

100,000,000

0
15 20 35 40
-100,000,000

-200,000,000

-300,000,000
Interest (%)

Figure 5.2.2: Net present value at different discount rate

The summary of the economic analysis is listed in Table 5.1.

Economic Parameter Value

Grass Root Cost RM16,715,694.24

Plant Lifetime 20 years

Start-up Operations 2 years

Total Capital Investment RM19,223,048.38

Total Manufacturing Cost RM114,694,887.00

Annual Sales Income After Taxes RM58,184,564.00

Payback period 5 years

Rate of Return 28%

Table 5.2.3: Summary of economic analysis

25
 APPENDIX C: CASH FLOW DIAGRAM
1. Calculation for Cumulative non-discounted cash flow in Excel
Capital Depreciation Fixed Capital Cumulative
Years Revenue COMd Net Income Cash Flow
Investment (d) Investment Cash Flow
0 -100,000,000 0 16,715,694 0 0 0 -100,000,000 -100,000,000
1 -16,715,694 0 16,715,694 0 0 0 -16,715,694 -116,715,694
2 -36,953,579 0 16,715,694 0 0 0 -36,953,579 -153,669,274
3 0 -1,671,569 16,715,694 62,924,000 56,153,377 5082184.86 57,841,815 -95,827,458
4 0 -1,671,569 16,715,694 62,924,000 56,153,377 5082184.86 57,841,815 -37,985,643
5 0 -1,671,569 16,715,694 62,924,000 56,153,377 5082184.86 57,841,815 19,856,172
6 0 -1,671,569 16,715,694 62,924,000 56,153,377 5082184.86 57,841,815 77,697,987
7 0 -1,671,569 16,715,694 62,924,000 56,153,377 5082184.86 57,841,815 135,539,802
8 0 -1,671,569 16,715,694 62,924,000 56,153,377 4237965.63 58,686,034 194,225,836
9 0 -1,671,569 16,715,694 62,924,000 56,153,377 4237965.63 58,686,034 252,911,871
10 0 -1,671,569 16,715,694 62,924,000 56,153,377 4237965.63 58,686,034 311,597,905
11 0 -1,671,569 16,715,694 62,924,000 56,153,377 5082184.86 57,841,815 369,439,720
12 0 -1,671,569 16,715,694 62,924,000 56,153,377 5082184.86 57,841,815 427,281,535
13 0 0 16,715,694 62,924,000 56,153,377 4739436.33 58,184,564 485,466,099
14 0 0 16,715,694 62,924,000 56,153,377 4739436.33 58,184,564 543,650,663
15 0 0 16,715,694 62,924,000 56,153,377 4739436.33 58,184,564 601,835,226
16 0 0 16,715,694 62,924,000 56,153,377 4739436.33 58,184,564 660,019,790
17 0 0 16,715,694 62,924,000 56,153,377 4739436.33 58,184,564 718,204,354
18 0 0 16,715,694 62,924,000 56,153,377 4739436.33 58,184,564 776,388,917
19 0 0 16,715,694 62,924,000 56,153,377 4739436.33 58,184,564 834,573,481
20 0 0 16,715,694 62,924,000 56,153,377 4739436.33 58,184,564 892,758,045

26
2. Calculation for Cumulative discounted cash flow at different discount rate in Excel
INTEREST = 15% INTEREST = 20% INTEREST = 35% INTEREST = 40%
Year NDCF
DF DCF CDCF DF DCF CDCF DF DCF CDCF DF DCF CDCF

0 -100,000,000 1 -100,000,000 -100,000,000 1 -100,000,000 -100,000,000 1 -100,000,000 -100,000,000 1 -100,000,000 -100,000,000

1 -116,715,694 0.87 -101,542,654 -201,542,654 0.83 -96874026.22 -196,874,026 0.74 -86,369,614 -186,369,614 0.7 -81700985.97 -181,700,986

2 -153,669,274 0.76 -116,788,648 -318,331,302 0.69 -106031798.8 -302,905,825 0.55 -84,518,100 -270,887,714 0.5 -76834636.8 -258,535,623

3 -95,827,458 0.66 -63,246,123 -381,577,424 0.58 -55579925.9 -358,485,751 0.41 -39,289,258 -310,176,972 0.4 -38330983.38 -296,866,606

4 -37,985,643 0.58 -22,031,673 -403,609,098 0.48 -18233108.79 -376,718,860 0.3 -11,395,693 -321,572,665 0.3 -11395693 -308,262,299

5 19,856,172 0.5 9,928,086 -393,681,012 0.4 7942468.727 -368,776,391 0.22 4,368,358 -317,204,307 0.2 3971234.364 -304,291,065

6 77,697,987 0.43 33,410,134 -360,270,877 0.33 25640335.69 -343,136,055 0.17 13,208,658 -303,995,650 0.1 7769798.695 -296,521,266

7 135,539,802 0.38 51,505,125 -308,765,753 0.28 37951144.59 -305,184,911 0.12 16,264,776 -287,730,873 0.09 12198582.19 -284,322,684

8 194,225,836 0.33 64,094,526 -244,671,226 0.23 44671942.39 -260,512,968 0.09 17,480,325 -270,250,548 0.07 13595808.55 -270,726,875

9 252,911,871 0.28 70,815,324 -173,855,903 0.19 48053255.46 -212,459,713 0.07 17,703,831 -252,546,717 0.05 12645593.54 -258,081,282

10 311,597,905 0.25 77,899,476 -95,956,426 0.16 49855664.83 -162,604,048 0.05 15,579,895 -236,966,822 0.03 9347937.156 -248,733,345

11 369,439,720 0.21 77,582,341 -18,374,085 0.13 48027163.64 -114,576,884 0.04 14,777,589 -222,189,233 0.02 7388794.407 -241,344,550

12 427,281,535 0.19 81,183,492 62,809,407 0.11 47000968.9 -67,575,915 0.03 12,818,446 -209,370,787 0.02 8545630.709 -232,798,920

13 485,466,099 0.16 77,674,576 140,483,983 0.09 43691948.92 -23,883,967 0.02 9,709,322 -199,661,465 0.01 4854660.991 -227,944,259

14 543,650,663 0.14 76,111,093 216,595,075 0.08 43492053.02 19,608,086 0.02 10,873,013 -188,788,452 0.009 4892855.965 -223,051,403

15 601,835,226 0.12 72,220,227 288,815,302 0.06 36110113.59 55,718,200 0.01 6,018,352 -182,770,099 0.006 3611011.359 -219,440,391

16 660,019,790 0.11 72,602,177 361,417,479 0.05 33000989.51 88,719,190 0.008 5,280,158 -177,489,941 0.005 3300098.951 -216,140,292

17 718,204,354 0.09 64,638,392 426,055,871 0.05 35910217.69 124,629,407 0.006 4,309,226 -173,180,715 0.003 2154613.061 -213,985,679

18 776,388,917 0.08 62,111,113 488,166,985 0.04 31055556.7 155,684,964 0.005 3,881,945 -169,298,770 0.002 1552777.835 -212,432,901

19 834,573,481 0.07 58,420,144 546,587,128 0.03 25037204.43 180,722,168 0.003 2,503,720 -166,795,050 0.002 1669146.962 -210,763,754

20 892,758,045 0.06 53,565,483 600,152,611 0.03 26782741.34 207,504,910 0.002 1,785,516 -165,009,534 0.001 892758.0448 -209,870,996

27
6.0 Financial Ratios (Profitability Analysis)

One of the most widely used techniques for determining a company's

performance is the use of financial ratios. A company's liquidity, operational
effectiveness, and profitability have all been determined using quantitative analysis of
financial report data from the income statement, balance sheet, and cash flow statement.
The financial ratio is categorised in light of the supplied data sets. During company
analysis, the following financial ratios are frequently used:

- Liquidity ratios
- Activity ratios
- Capital ratios
- Profit ratios
- Return investment ratio

The present financial condition is used to calculate the operating margin ratio,
gross profit margin, and net profit margin.

6.1 Operating Margin

The overall amount of money a company makes from its operations

might be referred to as the operating profit margin. It displays a company's
present financial condition before paying taxes and interest. Higher ratios are
preferred since they show that the company is successful in its operations and
skilled at turning sales into profits. As a result, it is a factor in determining how
well a management team runs a company.

The following is the operational margin formula:

𝐼𝑛𝑐𝑜𝑚𝑒 𝑓𝑟𝑜𝑚 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑠
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑀𝑎𝑟𝑔𝑖𝑛 = × 100%
𝑅𝑒𝑣𝑒𝑛𝑢𝑒
𝑅𝑒𝑣𝑒𝑛𝑢𝑒 ‒𝐷𝑀𝐶
= × 100%
𝑅𝑒𝑣𝑒𝑛𝑢𝑒
62924000 ‒ 45347012.44
= × 100%
62924000

= 27.93 %

28
6.2 Gross Profit Margin

Experts use the gross profit margin as a metric to evaluate a company's

financial stability. It is also referred to as the firm's net profit margin and
indicates the profit made prior to deducting selling, general, and administrative
charges. A company's gross profit margin is calculated by deducting its cost of
goods sold (COGS) and dividing the result by its net sales. The proportion of
sales used to determine gross profit margin is typical.

𝑁𝑒𝑡 𝑠𝑎𝑙𝑒𝑠 ‒ 𝐶𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑

𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = × 100%
𝑅𝑒𝑣𝑒𝑛𝑢𝑒
𝑅𝑒𝑣𝑒𝑛𝑢𝑒 ‒ 𝐷𝑀𝐶 ‒ 𝐹𝑀𝐶
= × 100%
𝑅𝑒𝑣𝑒𝑛𝑢𝑒
62924000 ‒45347012.44−3374919.84
= × 100%
62924000

= 22.57 %

6.3 Net Profit Margin

The ratio of revenue that remains after deducting all costs associated
with a sale is known as the net profit margin. The measurement shows the profits
that a company can generate from its whole sales. The net profit margin is
intended to serve as an assessment of a company's overall success. A high net
profit margin indicates that the company charges its products fairly and has
effective cost control. Because net profit margin is expressed as a percentage
rather than a dollar amount, it is possible to compare the profitability of two or
more businesses of any size.

𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥𝑒𝑠

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = × 100%
𝑅𝑒𝑣𝑒𝑛𝑢𝑒
𝑃𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥𝑒𝑠
= × 100%
𝑅𝑒𝑣𝑒𝑛𝑢𝑒
58184564
= 62924000 × 100%

= 92.47 %

29
 6.4 Rate of Return on Investment

A quantitative calculation for estimating the chance of profit from an

investment is called return on investment, or ROI. It is a metric that compares
the gains or losses on an investment to the cost. Consumers could use to evaluate
their holdings and see how well a particular investment has done in relation to
other assets (Alexander S. Gillis, n.d.).

𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥𝑒𝑠

𝑅𝑜𝑅𝑜𝑙 = × 100%
𝑇𝑜𝑡𝑎𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡

𝐴𝑛𝑛𝑢𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 𝑎𝑓𝑡𝑒𝑟 𝑖𝑛𝑐𝑜𝑚𝑒 𝑡𝑎𝑥𝑒𝑠

= 𝑇𝑜𝑡𝑎𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡 + 𝐶𝑂𝑀 +𝐶𝐺𝑅 × 100%

58184564
= 19223048.38 + 114694887 +19223048.38 × 100%

= 37.99 %

7.0 Summary

To expressed in conclusion, a equipment cost is calculated with reactor,

distillation column, heat exchanger, pump, flash column, and mixer. From the result,
we obtained the value of Total Fixed Capital Investment (FCI) is RM 167,156,94.24
and likewise the value of Total Capital Investment (TCI) is RM 19,223,048.38.
Therefrom, these value is required for the production of 10,000 MTPA of Cetyl
Alcohol from Palm Oil. Next, the Total Manufacturing Cost for this plant is valued at
RM 114,694,887.

As for Equipment Cost, the selected equipment are Distillation Column (T –

10), Heat Exchanger (E – 101), Pump (P – 101), Flash Column (V – 101) (SS), and
Mixer (M – 101). The total bare module cost (CBM) for each selected equipment is
RM 659126.13, RM 264846.72, RM 114668.36, RM 51184.58, RM 1444.54
respectively. Last but not least, two selected Compressor (C – 101) are also including
in Equipment Cost and have two different cost due to different value in Bare Module

30
 Factor (FBM). The cost are RM 6009367.46 and RM 11263.23, and the value of Bare
Module Factor (FBM) which is 3.4 and 4.0 respectively.

Conclusively, the operating margin ration for the production of Cetyl Alcohol
is 27.93% and the gross profit margin is 22.57%. Furthermore, we also obtain the net
profit margin which is 92.47% together with the rate of return on investment which is
37%.

8.0 References

1. Jorge A. Chan-Lau and Peter B. Clark1. (August 1998). Fixed Investment and
Capital Flows: A Real Options Approach.
https://www.imf.org/external/pubs/ft/wp/wp98125.pdf
2. Brian Beers. (April 30, 2021). Production Costs vs. Manufacturing Costs: An
Overview. https://www.investopedia.com/ask/answers/042715/whats-difference-
between-production-cost-and-manufacturing-cost.asp.
3. Dan. (July 24, 2013). Manufacturing Cost.
https://strategiccfo.com/articles/accounting/manufacturing-cost/.
4. Jong Min Lee School of Chemical and Biological Engineering Seoul National
University. Estimation of Capital Costs.
https://ocw.snu.ac.kr/sites/default/files/NOTE/Lecture06_0.pdf.
5. International Journal of Management & Information Technology. (April 2014).
Effects Of Fixed Capital Investments In Current Economic Downturn. Journal.
https://www.researchgate.net/publication/331079782_Effects_of_Fixed_Capital_I
nvestments_in_current_economic_downturn

31
APPENDIX: EQUIPMENT COST

Distillation column for T – 101:

i. Vertical vessel:

Materials: Stainless steel

Column Diameter = 1.9 m

Column Height = 21.75 m

Volume =4 r h 2

= 4 (1.9 ) 21.75 2

= 61.6755 m 3

K = 3.4974, K = 0.4485, K = 0.1074;

1 2 3

log C = K + K log (A) + K [log (A)]

10 p
0
1 2 10 3 10
2

log C = 3.4974 + 0.4485 log (61.6755) + 0.1074 [log (61.6755)]

10 p
0
10 10
2

C = RM 44099.04
p
0

32
 From table A6 for tower packing and material of construction of
stainless steel 304, the Identification number is 66:

From figure A19 with identification number 66, F = 7.1 BM

Bare module cost = C = C F BM p

0
BM

C BM,2001 = RM 44099.04 (7.1)

= RM 313103.22

C 2022 =C 2001 (I2022 I2001)

= RM 3131032.16 (821.1 394.3)

= RM 652013.82

ii. Sieve Tray

Materials: Stainless steel

Column Diameter = 1.9 m

Area =4 r 2

= 4 (1.9 ) 2

= 2.8357 m 2

33
From table A6 for sieve tray and material of construction of stainless
steel, Identification number is 61. From figure A19 with identification
number 61,

F = 1.8
BM

Bare module cost = C = C F BM p

0
BM

C BM,2001 = RM 1897.44 (1.8)

= RM 3415.40

C 2022 =C 2001 (I2022 I2001)

= RM 3415.40 (821.1 394.3)

= RM 7112.31

C BM, Tower (2022) =C BM,vessel +C BM,tray

= RM 652013.82 + RM 7112.31

= RM 659126.13

Using Excel for distillation column T – 102, T – 103, T – 104, T – 105,

and T – 10

34
Heat Exchanger for E – 101

Area: 1.445 m 2

Type: Shell and tube

K = 4.8306, K = -0.8509, K = 0.3187;

1 2 3

log C = K + K log (A) + K [log (A)]

10 p
0
1 2 10 3 10
2

log C = 4.8306 + (-0.8509) log (1.445) + 0.3187 [log (1.445)]

10 p
0
10 10
2

C p
0
= RM 50432.87

35
 From table A2, C = 0.03881, C = -0.11272, C = 0.08183 (Pressure: 50bar)
1 2 3

Table A3, Identification number is 4 and from figure A.18 F = 1.8

M

Figure A.4, B = 1.63, B = 1.66

1 2

36
 log F = C + C log (P) + C [log (P)]
10 p 1 2 10 3 10
2

log F = 0.03881 + (-0.11272) log (50) + 0.08183 [log (50)]

10 p 10 10
2

F = 1.21
p

C BM,2001 = C (B +B F F )
p
0
1 2 M p

= RM 50432.87 (1.63 + 1.66 (1.8) (1.21))

= RM 264846.72

C 2022 =C 2001 (I2022 I2001)

= RM 264846.72

Using Excel for heat exchanger E – 102, E – 103, E – 104, E – 105, E – 106,
and E – 107.

Pump for P – 101:

Power Consumption: 7.506 kW

Efficiency: 80%

Pump type: Centrifugal pump

Material: Stainless Steel

Pressure: 50 bar

37
K = 3.3892, K = 0.0536, K = 0.1538;
1 2 3

log C = K + K log (A) + K [log (A)]

10 p
0
1 2 10 3 10
2

log C = 3.3892 + (0.0536) log (7.506) + 0.1538 [log (7.506)]

10 p
0
10 10
2

C = RM 3580.84
p
0

From table A2, C = -0.3935, C = 0.3957, C = -0.00226 (Pressure: 50bar)

1 2 3

38
Table A3, Identification number is 39 and from figure A.18 F = 2.3 M

Figure A.4, B = 1.89, B = 1.35 1 2

log F = C + C log (P) + C [log (P)]

10 p 1 2 10 3 10
2

log F = -0.3935 +0.3957 log (50) + (-0.00226) [log (50)]

10 p 10 10
2

F = 1.87
p

C BM,2001 = C (B +B F F )
p
0
1 2 M p

= RM 3580.84 (1.89 + 1.35 (2.3) (1.87))

= RM 27532.42

C BM,2022 =C BM,2001 (I2022 I2001) (2)

= RM 114668.36

Using Excel for pump P – 102 and P – 103.

Flash Column for V – 101 (SS):

Column Diameter = 1.0419 m

Volume = 0.6291 m 3

Table A.1; K = 3.4974, K = 0.4485, K = 0.1074;

1 2 3

log C = K + K log (A) + K [log (A)]

10 p
0
1 2 10 3 10
2

log C = 3.4974 + 0.4485 log (0.6291) + 0.1074 [log (0.6291)]

10 p
0
10 10
2

C = RM 2579.15
p
0

Inlet Pressure, P = 1 bar

FP,vessel = (P+1)D2[850-0.6(P+1)]+0.003150.0063

39
 = (1+1)1.04192[850-0.6(1+1)+0.003150.0063

= 0.6948 since F P,vessel < 1, then F

P,vessel =1

According to Table A.3, for stainless steel, F = 4.0 M

Table A.4, B = 2.25 and B = 1.82

1 2

C BM,2001 = C (B +B F F )
p
0
1 2 M p

= RM 2579.15 (2.25 + 1.82 (4.0) (1))

= RM 24579.32

C BM,2022 =C BM,2001 (821.1 394.3)

= RM 51184.58

Using Excel for flash column V – 102.

Mixer for M – 101:

Material : Carbon steel (CS)

Type : Propeller

Power : 489.6281 kW

K = 4.3207, K = -0.9641, K = 0.1346;

1 2 3

40
 log C = K + K log (A) + K [log (A)]
10 p
0
1 2 10 3 10
2

log C = 4.3207 + (-0.9641) log (489.6281) + 0.1346 [log (489.6281)]

10 p
0
10 10
2

C = RM 502.6690
p
0

From figure A.7, F = 1.38 (Mixer, Propeller)

BM

41
Bare module cost = C = C F BM p
0
BM

C BM,2001 = RM 502.6690 (1.38)

= RM 693.68

C BM,2022 =C BM,2001 (821.1 394.3)

= RM 1444.54

Using Excel for mixers M – 102, M – 103, and M – 103.

Compressor for C – 101

Power: 5239.90 kW

Material: Carbon steel

Type: Reciprocating

K = 2.2897, K = 1.3604, K = -0.1027;

1 2 3

log C = K + K log (A) + K [log (A)]

10 p
0
1 2 10 3 10
2

42
log C = 2.2897+ (1.3604) log (5239.90) - 0.1027 [log (5239.90)]
10 p
0
10 10
2

C = RM 848751.53
p
0

From Figure A.19 and Table A.6, the Identification number is 10. F = 3.4
BM

Bare module cost = C = C F BM p

0
BM

C BM,2001 = RM 848751.53 (3.40)

= RM 2885755.19

C BM,2022 =C BM,2001 (821.1 394.3)

= RM 6009367.46

Reactor for C – 101

Power: 5239.90 kW

Material: Carbon steel

43
Type: Reciprocating

K = 2.2897, K = 1.3604, K = -0.1027;

1 2 3

log C = K + K log (A) + K [log (A)]

10 p
0
1 2 10 3 10
2

log C = 2.2897+ (1.3604) log (5239.90) - 0.1027 [log (5239.90)]

10 p
0
10 10
2

C = RM 848751.53
p
0

44
From Table A.7, F = 4.0
BM

Bare module cost = C = C F

BM p
0
BM

C BM,2001 = RM 1352.18 (4)

= RM 5408.71

C BM,2022 = RM 11263.23

Using Excel for Reactor R – 102 and R – 103.

45