Fundamentals of Applied Chemistry

Economics of production

The basic function of any company’s existence is to make a profit. Without profit, it cannot do other socially desirable activities such as providing continuing employment, paying money for local social services through rates and local taxes and providing money for national activities through corporate taxes. Therefore when a company considers establishing a new manufacturing plant, it must carefully consider the economic aspect of the plant. Simply for any production, we can consider a number of inputs and outputs of the manufacturing plant. The key inputs are the raw materials, energy and supportive service. The supportive services include all employees with labour, laboratory services (quality-control) and security with fire services. The key output is the major product with other by-products including released energy. Generally, the energy is trapped as steam of high temperature and pressure which can be recycled to run electrical generators, pumps and others. The by-products will be purified followed by further processing to get other products which can be sold to make money. Moreover, it can be more economical to change the conditions in the production of the major products so that by-products are suppressed.
A considerable number of factors are involved in the production of a chemical ranging from the supply and storage of the raw materials to the storage and selling of the finished product. In between these steps, we consider firstly all the complex and expensive equipment for carrying out the chemical process, separating and purifying the product and secondly, the people who operate the plant and carry out maintenance work to keep these processes in operation. A simple way of combining information on these various cost factors into a useful economic model is the cost table. We can split the cost of production into two: fixed cost and variable cost which are presented below:

Fixed cost	Variable cost
Labour	Raw materials
Maintenance	Energy
Safety	Packaging
Laboratory services	Transport
Management	Licenses
Depreciation	Patents

Cash flow in the production cycle

The cash flow in the production cycle is the time it takes a company to turn raw materials into cash. It is also known as the cash conversion cycle which refers to the time between purchasing the raw materials used to make a product and collecting the money from selling the product. It may take many years to come to the final product in the market from the first stage of manufacturing. This is the time when the company is spending money. It will find this money either by using profits from previous years or by borrowing money from the bank. Whichever choice is made, there is expense involved. The company will be willing to bear this expense for several years if it believes that the product will make profits.

Running a chemical plant

A chemical plant is an industrial process that manufactures chemicals on a large scale. Chemical plants use specialized types of equipment, units and technology in the manufacturing process. Polymers, pharmaceuticals, food, beverage, power plants, natural gas processing, water and wastewater treatment, etc. are some kinds of chemical plants.
Within any chemical industry, several principles of science are continuously being used. The essential features that must be pointed out are:

1. Market and sales: Justification of industry
2. Method of production
   a. Chemical reaction
   b. Flow diagram
   c. Materials requirements
3. Chemical engineering problems
   a. Manufacturing
   b. Economics

These features can be solved by using chemistry, thermodynamics, reaction mechanism, process and mechanical design, economics, unit operation and unit process concepts. A chemical plant can be easily run with no more than a dozen workers. Temperature and pressure changes can be measured by instruments directly connected to computers. Computer programming can easily control pumps, heaters, and others so that the plant is kept running in the best condition to control the quality of the product.

Designing a chemical plant

The designing of a chemical plant is the art of science especially done by chemical engineers. The design of the chemical plant consists of two parts: i. Process design and ii. Plant design. Process design is like a circuit diagram in electronics and plant design is the hardware that runs the electronics.
Designing a chemical plant consists of three aspects:

• Preparation of flow sheets
• Process steps
• Design steps

i. Preparation of flow sheets:
The chemical engineer uses flow diagrams to show the sequence of equipment and unit operations in the overall process to simply visualize the manufacturing procedure and indicate the quantities of materials and energy transfer. These flowsheets may be divided into three types: qualitative, quantitative and combined details. Generally in chemical engineering, block diagrams are used. They are rectangular block diagrams and give the complete graphic layout of the involved steps in the process.

ii. Process design:
It involves the following steps:
-Reaction of reactant
-Separation of product
-Purification of the products

iii. Design steps
It involves the following steps:
-Information collection
-Preparation of flow diagrams
-Designation of reactor
-Selection of control instrumentation
-selection of materials handling equipment
-Designing of process
-Estimation of cost for each item

The construction material in designing a chemical plant must be:
i. Inert to reactant, intermediates and products
ii. Capable of withstanding very high pressure and temperature.
iii. Durable

Factors to consider before designing a chemical plant

1. Manufacturing process
2. Materials and energy balance
3. Temperature and pressure range
4. Raw materials and product specifications
5. Yields, reaction rates and time cycle
6. Materials of construction
7. Utility requirements
8. Plant site

Differences between Batch and Continuous process

Batch processing system	Continuous processing system
It involves a sequence of steps followed in a specific order.	It refers to the flow of a single unit of products between every step of the process without any break.
The quantity of product is less.	The quantity of products is massive.
The product is the same but a different version	The product is identical and standardized.
There is variety in this process.	There is no variety.
Production planning and control are somewhat complicated.	Production planning and control are simple.
Uses low-cost equipment. eg. production of paracetamol	Uses high-cost equipment. eg. cement industry.