How to Increase Chemical Plant Profitability - Part 1 - Overview

This is Part 1 of the How to Increase Chemical Plant Profitability series.

Although it may seem that a chemical engineers primary job is to provide technical assistance or troubleshoot difficult problems, from a managers perspective they only have one purpose - to increase the chemical plants profitability.

Source: Rob Stupka

It is also true that most projects that require capital funding need to have a business case to get approval.

Unfortunately a lot of chemical engineers, while excellent at the technical side of things, are not trained in the art of proposals, persuasion, and the development of financial analysis.

While this guide does not contain everything about financial studies, it is a beginners guide to identifying potential profitable projects, and is based on examples.

Before illustrating potential for improving site profitability, it is better to start by looking at a plant’s costs. These expenses can be generalized into the following categories:

Capital Costs

  • Equipment Upgrades
  • Expansions

Operating Expenses

  • Consumables
  • Energy - Fuel
  • Raw Materials

Maintenance Expenses

  • Parts

Fixed Costs

  • Payroll
  • Services - IT, Medical, R&D

Each of these can be reduced through the efforts of a skilled chemical engineer, as well as looking at increasing the sites income.

To see some more specific examples, the following posts complete this series:

  • How to Increase Chemical Plant Profitability - Part 2 - Energy Efficiency
  • How to Increase Chemical Plant Profitability - Part 3 - Production
  • How to Increase Chemical Plant Profitability - Part 4 - Equipment Availability
  • How to Increase Chemical Plant Profitability - Part 5 - Consumables Reduction
  • How to Increase Chemical Plant Profitability - Part 6 - Extraction
  • How to Increase Chemical Plant Profitability - Part 7 - Capital Reduction

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