Process 1

a) Estimation of Purchased Equipment Cost

Equipment Cost3

The Estimated fixed capital cost needed to put up a plant for the production of Mono-Ethylene Glycol
through the hydration of ethylene oxide is calculated using the Lang Method, factor for Fluids
processing is 5.0 as taken from Perry’s Chemical Engineers’ Handbook 8th ed.

Figure 1. Lang Factors4

Lang Factors
TYPE OF PLANT Fixed Capital investment Total capital investment
Solid processing 4.0 4.7
Solid-Fluid Processing 4.3 5.0
Fluid Processing 5.0 6.0

Table 3. Purchase Cost of Equipment Items

Equipment cost
delivered
quantity Fixed Capital Cost
equipment cost
ethylene tank 1.00 36,750.00 183,750.00
oxygen tank 1.00 105,000.00 525,000.00
ethylene glycol tank 1.00 52,500.00 262,500.00
ethylene oxide tank 1.00 10,500.00 52,500.00
water tank 1.00 73,500.00 367,500.00
Ethylene oxide reactor 1.00 84,000.00 420,000.00
ethylene glycol reactor 1.00 73,500.00 367,500.00
Gas absorber 1.00 8,400.00 42,000.00
phase separator 1.00 42,000.00 210,000.00
refiner 2.00 1,050,000.00 10,500,000.00
evaporator 3.00 2,625,000.00 39,375,000.00
dryer 1.00 15,750.00 78,750.00
preheater 1.00 5,250.00 26,250.00

3
Plant Design and Economics for Chemical Engineers – 5th Edition by Peters, Timmerhaus and West.
Perry’s Chemical Engineers’ Handbook 8thed.
4
 cooler 1.00 3,097.50 15,487.50
heat exchanger 2.00 2,100.00 21,000.00
compressor 1.00 91,024.50 455,122.50
Total purchase cost of Equipment USD 4,278,372.00 52,902,360.00
Items PHP 197,618,002.68 2,443,560,008.40

PCE Purchase Cost Of Equipment $ 52,902,360.00

PPC Total Physical Plant Cost $ 161,352,198.00

FCC Fixed Capital Cost $ 233, 960, 687.10

WCC Working Capital Cost $ 11, 698, 034.36

TCI Total Capital Investment $ 245, 658, 721.50

Estimation of fixed capital cost, reference table 6.1, fluids processing plant,

PPC = PCE x (1 + f1 + f2+ f3 + f4 + f6 +f7)

PPC = $ 52,902,360.00 x (1 + 0.40 + 0.70 + 0.20 + 0.10 + 0.50 + 0.05 + 0.15)

PPC = $ 161,352,198.00
FIXED CAPITAL COST (FCC)5:

FCC = PPC x (1 + 0.30 + 0.05 + 0.10)

FCC = $ 161,352,198.00 x (1 + 0.30 + 0.05 + 0.10)

FCC = $ 233, 960, 687.10

WORKING CAPITAL COST (WCC) 4:

WCC = FCC x (0.05)

WCC = $ 233, 960, 687.10 x (0.05)

WCC = $ 11, 698, 034.36

TOTAL CAPITAL INVESTMENT (TCI):

TCI = FCC + WCC

TCI = $ 233, 960, 687.10 + $ 11, 698, 034.36

TCI = $ 245, 658, 721.50

5
Chemical Engineering Design Volume 6 by Coulson and Richardson
 b) Estimation of Operating Costs

VARIABLE COSTS

Raw materials2:

Table 1. Raw Materials for Hydration of Ethylene Oxide for the Production of Ethylene Glycol
through Oxidation of Ethylene
Industrial grade Ethylene gas US $11.25/kg Php 507.8363/ kg
(99% purity)
High purity oxygen US $68.4/ kg tank Php 3087.6444/kg

Exchange Rate1:
Table 2. Exchange Rate from Dollar to Philippine Peso
US Dollar ($) Philippine Peso (Php)
$1 Php 45.141

Based on the calculations in the material balance the amount of ethylene gas and oxygen gas
needed to produce 10,000 kg of ethylene glycol a day is 893.848kg and 8540.689kg, respectively.

Cost of Ethylene Gas:

$ 11.25
893.848 kg Ethylene Gas x ( ) = $ 10, 055.79
1 𝑘𝑔

Cost of Oxygen Gas:

$ 68.4
8540.689 kg Oxygen Gas x ( ) = $ 584, 183.1276
1 𝑘𝑔

Total Cost of Raw Materials = $ 10, 055.79 + $ 584, 183.1276

Total Cost of Raw Materials = $ 594, 238.9176

1
From http://www.bsp.gov.ph/
2 From The cost of Industrial Grade Ethylene Gas and High Purity oxygen from Alibaba.com
Utilities
DESCRIPTION
Utility Cost = 0.02 x (TCI)
Utility Cost = 0.02 x ($ 245, 658, 721.50)
Utility Cost = $ 34, 913, 174. 429
Miscellaneous Operating Materials
DESCRIPTION
MOM = 0.10 x (MC)
MOM = 0.10 x ($ 23, 396, 068.71)
MOM = $ 2, 339, 606.871

Variable Cost = MC + UC + MOM

Variable Cost = $ 23, 396, 068.71 + $ 34, 913, 174. 429 + $ 2, 339, 606.871
Variable Cost = $ 60, 648, 850.01

FIXED COSTS
A. Maintenance Cost
DESCRIPTION
 DESCRIPTION

Maintenance Cost = 0.10 x (FCC)

Maintenance Cost= 0.10 x ($ 233, 960, 687.10)
Maintenance Cost = $ 23, 396, 068.71

B. Operating Labour Cost

DESCRIPTION
 For a plant capacity of 10,000 kg per day (5 tonnes), and having average conditions, the estimated
operating labour requirement is 24 employee-hours/day/processing step. Considering a 300
days annual operation and 4 processing steps mainly evaporation, reaction, distillation and drying.

24 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒−ℎ𝑜𝑢𝑟𝑠 300 𝑑𝑎𝑦𝑠

Operating labor required = ( 𝑑𝑎𝑦−𝑝𝑟𝑜𝑐𝑒𝑠𝑠𝑖𝑛𝑔 𝑠𝑡𝑒𝑝) x 4 processing steps x (𝑦𝑒𝑎𝑟 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛)

Operating labor required = 28, 800 employee – hours / year

Table: Latest Wage Orders and Implementing Rules, Issued by The Regional Boards as of March 2015
(Department of Labor and Employment, 2015)

Php 481.00 / 8 hours

𝑃ℎ𝑝 481.00
Operating labor cost = 28, 800 employee – hours / year x (𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒− 8 ℎ𝑜𝑢𝑟𝑠) x (1 hour operation)

Operating labor cost = Php 1, 731, 600

C. Laboratory Cost
DESCRIPTION

Laboratory Cost = 0.20 x (OLC)

Laboratory Cost = 0.20 x (Php 1, 731, 600)
Laboratory Cost = Php 346, 320

D. Supervision Cost
DESCRIPTION

Supervision Cost = 0.20 x (OLC)

Supervision Cost = 0.20 x (Php 1, 731, 600)
Supervision Cost = Php 346, 320

E. Plant Overheads
DESCRIPTION

Plant Overheads = 0.50 x (OLC)

Plant Overheads = 0.50 x (Php 1, 731, 600)

Plant Overheads = Php 865, 800

F. Capital Charges
DESCRIPTION

Capital Charges = 0.10 x (FCC)

Capital Charges = 0.10 x ($ 233, 960, 687.10)
Capital Charges = $ 23, 960, 068.71
G. Local Taxes
DESCRIPTION

Local Taxes = 0.02 x (FCC)

Local Taxes = 0.02 x ($ 233, 960, 687.10)
Local Taxes = $ 4, 679, 213.742

H. Insurance
DESCRIPTION

Insurance cost = 0.01 x (FCC)

 Insurance Cost = 0.01 x ($ 233, 960, 687.10)
Insurance Cost = $ 2, 339, 606.871

I. License Fee/ Royalty Fees

DESCRIPTION

License Fee/Royalty Fees = 0.01 x (FCC)

License Fee/Royalty Fees = 0.01 x ($ 233, 960, 687.10)
License Fee/Royalty Fees = $ 2, 339, 606.871

Fixed Costs = MC + OPC + LC + S + PO + CC + LT + I + LF

Fixed Costs = $ 23, 396, 068.71 + $ 38,359.806 + $ 7671.9612 + $ 7671.9612 + $ 19, 179.903 + $
23, 960, 068.71 + $ 4, 679, 213.742 + $ 2, 339, 606.871 + $ 2, 339, 606.871
Fixed Costs = $ 54, 687, 448.54

Others:
Sales Expense
Sales Expense = 0.20 x (VC + FC)
Sales Expense = 0.20 x ($ 60, 648, 850.01 + $ 54, 687, 448.54)
Sales Expense = $ 23, 067, 259.71

General Overheads
General Overhead = 0.30 x (VC + FC)
General Overhead = 0.30 x ($ 60, 648, 850.01 + $ 54, 687, 448.54)
General Overhead = $ 34, 600, 889.57

Annual production Cost

Annual Production Cost (APC) = FC + VC + SE + GE
Annual Production Cost (APC) = $ 54, 687, 448.54 + $ 60, 648, 850.01 + $ 23, 067, 259.71 + $ 34,
600, 889.57
Annual Production Cost (APC) = $ 173, 004, 447.8