Capital chemical industry

The proportion of UK chemical industry capital investment which is directly related to environmental protection has risen to 14% and is forecast to rise to 20% by 1996 [7]. 

Capital Investment. Erom the viewpoint of a project, all of the capital that must be raised is external capital. Equity capital is the ownership capital, eg, common and preferred stocks or retained cash, whereas debt capital consists of bonds, mortgages, debentures, and loans. Nearly all investment involves a mixture of both types so as to maximize the return on investment (21). The debt ratio (debt/total capital) for the chemical industry is typically over 30%. Because financial details are not well known during the preliminary phases of project analysis, the investment is viewed simply as the total capital that must be expended to design and build the project. 

The U.S. chemical industry achieved an annual reduction of 4.2% in energy input per unit of output for the period 1975—1985 (2). This higher reduction resulted from cost optimization, the tradeoff of increased capital for reduced energy use, that was driven by energy prices (4). In contrast, from 1985 to 1990, the energy input per unit of output has been almost flat (2) as a consequence of falling prices. The average price the U.S. chemical industry paid for natural gas fell by one-third between 1985 and 1988 (1,5). 

The installed capit investment is about 375 per pallet for a 5000-paUet system. A characteristic of drive-in, drive-through, and flow racks is that, at any one point in time, only one product can occupy a given storage lane. Products are not mixed because of the complications that this practice presents in inventoiy management. In any event, there is seldom any need to mix products in the chemical industry because products are made in lots, blends, etc., and a storage lane is ordinarily designed to accommodate either a complete lot or some fraction of a lot. The result is that the total storage space available rarely is completely used. This is a problem that aisle racks... 

Sources for information on chemistry and the chemical industry are listed. The type of information available (see keywords) in each sonrce is indicated by the capital letters in parentheses following each listing. 

Traditionally, in the bulk chemical industries the capital cost of a plant may be scaled using the exponential costing approach ... 

Pressure filters or filter presses are commonly of the batch type, and are characterized by smaller floor area, high filtration rates, and lower capital cost. Dryer cakes are produced. The chemical industry uses these filters more widely than mineral processing industries, mainly because of its batch operation. The most common types of pressure filters used are the plate and frame presses. These comprise a series of vertical, alternating parallel frames and plates, with the filter cloth being held against the plate and the formation of cake occurring in the hollow frame. 

In the chemical industry processes are often capital intensive with consistent raw materials being converted into long-life products. If a process is capital intensive it pays to run the process 24 hours a day, 7 days a week, 52 weeks a year, as far as technically possible. Labour costs are likely to be minimised by working continuously as well. 

This book is extremely important in my view because it gives a forum to the voices and tells the stories of a new invisible minority who are casualties of our chemical-dependent economic base. Dr. Michael Tax, a specialist in occupational medicine, rightly insists that MCS is a product of industrial capitalism and cannot be understood independently of it. 

While production and distribution are intensively investigated due to the complexity and cost-importance of capital-intensive production assets in the chemical industry, procurement and demand management in the chemical industry value chain is less investigated. 

Even individual segments of the chemical industry have a very large economic importance. As one example, an Arthur D. Little study has estimated that 23 percent of all business sales, 16 percent of all capital investment and 19 percent of total non-government related jobs are dependent on the production of petrochemicals ( 1). According to this study, 35 to 45 percent of United States business activity is directly or indirectly affected by the American petrochemical industry. 

From the results it can be seen that the value of the project is negative for virtually all cases. Only with discount rates below 10% can the financial case be forced above zero - and then only if the lowest conceivable capital cost ( 400 million) and the highest conceivable savings rate ( 50 per year) are simultaneously assumed. Discount rates for major capital projects in the chemical industry are currently 12% or more, and higher (15%+) for high-risk projects. And remember - the project would not result in any measurable environmental improvement. 

More directly and in the shorter term there will be consequences for employment. As a capital-intensive industry, the chlor-alkali sector itself does not employ large numbers of people. However, the indirect employment consequences of closure are much greater. Industry estimates may be seen as being too well informed and therefore unreliable, and instead it might take governmental estimates. The European Commission (DG-III, nowDG-Enterprise) has estimated that there would be a loss of 10 000 jobs in the EU chemical industry by the year 2010 - ignoring secondary effects [6]. The... 

Chemical and hazardous materials industry infrastructure includes substantial facility and equipment investment it is highly capital intensive. Most chemical industry facilities contain very specialized process equipment that would be difficult to replace quickly. A good example is an oil refinery plant, where if the cracking facilities were destroyed they could not be replaced anytime soon. It is interesting to note that some chemical industry facilities (e.g., oil refineries) require large amounts of land (have a large footprint) but are typically staffed with few employees relative to on-site land requirements. 

This feature establishes the expectation that chemical industrial facilities should, through their annual capital, operations, maintenance, and staff resources plans, identify and set aside resources consistent with their specific identified security needs. Security priorities should be clearly documented and should be reviewed with utility executives at least once per year as part of the traditional budgeting process. 

There is a basic rule that applies to production in the chemical industry invest huge capital to make a big plant so that there is less overhead and the product can be produced more cheaply on this larger scale. This is the principle of economy of scale. A typical ethylene plant capacity rose from 70 million Ib/yr in 1951 to 2 billion Ib/yr in 1991. In 1950 vinyl chloride sold for 14C/lb and was produced at a rate of 250 million Ib/yr. In 1969 it sold for 5C/lb (in spite of 20 years of inflation) because it was being made at the rate of 3.6 billion Ib/yr. In 1950 sulfuric acid, the number one chemical in terms of U.S. production, sold for 20/ton. In 1980 the price was only 40/ton despite many double-digit inflation years in the 1970s. The reason is that the production went from 20 billion lb to 80 billion lb. 

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