Profit Maximization Techniques for Operating Chemical Plants. Sandip K. Lahiri
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and followed by some of the leading companies.
The practicing process engineers or production engineers working in chemical plants normally have much less exposure or knowledge to implement a site‐wide holistic profit maximization project. The available books on the market on chemical engineering and process engineering do not cover the practical aspects of how to increase profit in a running commercial chemical plant. The available books on chemical engineering optimization and energy improvement place emphasis on unnecessary theoretical details, which normally are not required by practicing engineers and those theories have very little relevance for commercial implementation of profit maximization in a running plant. Most of the books cover theoretical aspects and unnecessary detailed calculations mainly for the design of process equipment. Few books address optimization in chemical plants as their focus is on development of a superior theoretical optimization algorithm and completely ignore the real‐life application side. Every CEO in chemical plants understands that profit maximization in running a chemical plant is a vast subject and should be tackled holistically. There are various ways and means with varying degrees of usefulness to increase profit in operating plants. Profit can be increased by reducing waste, by optimizing processes, by increasing equipment performance, by improving reaction selectivity/yield/efficiency, by reducing raw material and utility consumption, by pushing the process towards its constraints, by running the plants at the highest possible capacity, by installing low‐cost high‐efficacy equipment, etc. Most of the available books cover the whole subject only partially. Some books cover energy optimization, some deal with waste minimization, and some introduce low‐cost design of equipment. However, no book is available on the market to cover the whole gamut of the subject holistically and in this context this will be the first such book. It provides engineers with all practical aspects of the profit maximization project in running plants, as well as expert guidance on how to derive maximum benefits from running the plants.
Clearly, it was not a small effort to write the book, but the absence of such a practical oriented book on the market and its requirement in a large number of process industries spurred me to writing it. I had an opportunity to work with leading petrochemical plants across the globe in the last 28 years was fortunate to see a wide spectrum of profit improvement initiatives taken by various fortune 500 companies. I have tried to incorporate all my learning and global experience in this book. I would like to thank Mr Mansoor Husain of M/s Scientific Design, USA, for teaching and exposing me to the practical field of profit improvement.
Finally, I am truly grateful to my family, my wife Jinia and my two lovely children Suchetona and Srijon, for their understanding and generosity of spirit in tolerating my absence during the writing of this book.
Dr Sandip Kumar Lahiri
January, 2020
1 Concept of Profit Maximization
1.1 Introduction
There has been a drastic change of business environment in the last 20 years. Shrinking profit margins in chemical process industries (CPIs) due to globalization and an uneven level playing field in international chemical businesses have given rise to cut‐throat competition among process industries and has changed the global chemical business scenario (Lahiri, 2017b). Introduction of low cost technology in the market, cheap oil prices, a decline in the growth rate of Chinese and EU economies, the recent discovery of cheap US shale gas, for example, have added new dimensions in the business environment in recent years.
Modern process industries are experiencing the following new challenges in their businesses:
Enforcement of stringent pollution control laws.
Pressure from government agencies to change to more energy efficient processes and equipment.
Constant encouragement from government to shift to safer and less pollutant processes and technology.
Decline of sales prices of end products in the international market.
More focus on sustainability and more reliable processes.
All these issues are forcing the process industries to look for new technological innovations so that new ways of doing business can be explored.
Profit maximization is at the core of every chemical company's vision and mission nowadays. Making money by safely producing chemicals and selling locally are no longer adequate to survive in today's business environment.
Maximization of profit, continuous improvement of operation, sustainability, and enhanced reliability to reduce production cost are buzzwords in today's CPI. Industries are slowly shifting their priorities to energy efficiency, real‐time process optimization, environment friendliness, and sustainability.
Running the plant at their highest feasible capacity by exploiting the margin available in process equipment is no longer a luxury but a necessity. Maximizing the profit margin by reducing waste products, by increasing mass transfer and energy efficiency of equipment, and by pushing the process to their physical limit are the current trends of CPI (Lahiri, 2017b).
Another challenge process industries are facing is the unprecedented fast rate of obsolescence. Chemical process technology and equipment are becoming obsolete at a very fast rate. New generation energy efficient processes, environment friendly low waste generated processes, and higher selectivity catalysts are coming to market every year and pose a survival threat to older plant and technology. Simple distillation columns that have dominated the process industries and refineries for the last few decades are no longer remaining competitive. Reactive distillation columns and low energy intensive membrane technology are slowly replacing the older technology. Apart from profit maximization, business objectives also venture out to the fields of sustainability, reliability, low environment impact, etc. With the advent of faster computers, online optimization, advance process control, real‐time plant monitoring, online equipment fault diagnosis, big data‐based process parameter data analytics, artificial intelligence (AI), and internet of things (IOT)‐based sensors and technology have found their way into process industries.
During this turbulent time, people and industries that cannot change their way of doing business quickly gradually become obsolete. Many industries and technologies that were running 25 years ago no longer exist as they could not cope with the changing requirements of modern times. After globalization, chemical industries needed to purchase their raw material and sell their finished products to the international market at the international market price. They have to compete with cheap raw material prices of OPEC countries, cheap manpower costs of China, big capacity of the Middle East plants, etc. Most of the traditional industries could not cope with this uneven competition and gradually became obsolete. Hence, to survive in today's business environment, industry needs to find new ways of doing business. Therefore, a completely new way of thinking and optimization is required to maximize profit. A complete paradigm shift in mindset is the need of the hour.
Profit maximization is one of the prime goals of every management team of process industries across the globe.
Profit maximization in running chemical plants is itself a huge challenge that needs to be addressed by holistic vision and procedures. What is the objective of profit maximization in the process industries? It is not simply waste or loss minimization and it is not simply energy and raw material minimization. It is much bigger than that. The ultimate goal of profit maximization is to use every resource available to the process industry in the most efficient manner so that dollar per hour generation is maximized and sustained over years. To achieve this goal, energy, raw materials, equipment, manpower, processes, and environment as well as the mindset of the people must be aligned and be holistically optimized.
Most of the time, engineers and managers working in process industries tackle this problem with a fragmented approach. Process engineers try to optimize process parameters, production engineers try to meet a production target rate, energy managers want to minimize energy consumption, maintenance engineers try to increase equipment uptime, reliability engineers try to increase equipment and process an on‐stream factor, safety