1. 5
5.1 MATERIAL BALNCE
MATERIAL BALNCE ON STEEPING TANK
1.1
5. MATERIAL AND ENERGY BALNCE

2. 6. Energy balance on dryer
• Solid matter in Dry starch and wet starch = 2441 kg/day
• Initial air condition = T= 20o
C (h0=30kJ/kg), and 50% RH, H1 =0.0074 kg of water/ kg dry air
• Product temperature when it leaves drier =450
c
• Heated air entering in to the drier = 400
C at 25% RH, enthalpy of in let air (ha1)
ha1=71Kj/kg dry air, where RH= relative humidity
• Enthalpy required to heat the air = ha1 – h0 = 71-30 = 41kJ/kg
• Air temperature leaving the drier = 35 0
C
• Latent heat of vaporization at 0 0
C = 2507KJ/kg
• Specific heat of air (Cp,a) = 0.24 + 0.46 (H)
• Specific heat of solid matter of the product (Cp,e) =2.32 kJ/kg0
c
• Specific heat of water (Cw) = 4.2 kJ/kg0
C
• Energy estimated to be released in order to dry the starch.
• Feed temperature = 250
C
• H1& H2 is absolute humidity of air
• A = is flow rate of air
• Enthalpy of Feed = hwe
• Enthalpy of product = hde
• Enthalpy of inlet air = ha1
• Enthalpy of out let air = ha2
A(H2-H1)= 2441-1666 = 775 kg /day ........................................1
mwet starch(hwe) + A (ha1) = mdry starch (hde) + A (ha2) ---------------------------- [2]
1.hwe = Cpstarch* ΔT + W1 .CpH2O. ΔT
hwe = 1.75 kJ/kg0
C (250
c) + 0.25(4.2)( 250
c)
hwe=70 kJ/kg

3. 2. hde = CpstarchΔT + Ws2*CpH2O * ΔT
hde = 1.75 kJ/kg (45) + 0.052(4.2)(45)
hde = 88.75 kJ/kg
3. ha2 = Cs ΔT + λ H2
ha2 = (0.24 +0.46H2) (35) + 2507.4H2
ha2 = 8.4 +2523.5H2---------------------------------------------- [3]
Inserting eq. 3 in eq.2
2441(70) + A (71.0) = 1666(88.75) + A (8.4 +2523.5H2)
170,870+A (71.0) =147,857+ 2523.5AH2----------------------- [4]
Taking Eq. [1] and inserting it in eq. [4]
from Eq. [1]
AH2=775+AH1=775+A( 0.012 Kg/ kg dry air)
then Eq. [4]
170870+A (71.0) =147,857+ 2523.5(775+A( 0.012 ))
170870+A (71.0) =147,857+1,302,050.3+A(30.2)
A=3,1196 kg/day
Inserting A in eq.1
A (H2 - H1) =775 kg/day
H2=(775 +31196 *0.012) /31196
H2=0.0368 Kg/ kg dry air
Inserting H2 in eqution3.
ha2 = 8.4 + 2523.5 (0.0368kg/kg dry air)
ha2 = 101.37kJ/Kg

4. Table 6.1: Specification Equipments
Equipments quantity type capacity Power needed
for driving
Centrifuge Separator 1 Vertical Cylinder 0.186m3
/hr 65kw/hr
Dryer 2 Flash pan type 4.04m2
125kwhr
Heat Exchanger 3 Plate type 0.5m2
75kw/hr
Pump 3 centrifuge 0.396m3
/hr 1.5kwhr
Air filter 1 Vertical Basket 10m3
/hr 50kw/hr
Belt conveyer 1 horizontal 3m 15kw/hr
Packing machine 1 general 25packets/min 95kw/hr
Total 426.5kw/hr
Source; Coulson and Sinnot volume-6 and www.machte.com

5. The total annual total energy consumption to drive each equipment’s, assuming the will be 300
working days.
=426.5kw/hr *24hr *300
=3,070800kw/year
Also by approximation for lighting and other related services around 20,000kw per year
consumed. Therefore the total electric energy consumed is the sum total energy needed for
equipments and for lighting.
=3,070800kw +20,000kw
= 3090800kw/year
Process flow diagram

6. 7. ECONOMIC EVALUATION OF THE PROJECT
7.1 PLANT CAPACITY AND PROPOSED LOCATION
Based on the market study, the envisaged plant is proposed to have annual production capacity of
500 tones. The plant will operate in a single shift of 8 hours a day, and for 300 days a year.
CORN STARCH is mainly consumed by the Pharmaceutical industry, food industry , textile
industry….. The location for the plant is a compromise between the availability of major raw
material corn/ maize and market for the finished product starch and modified starch. The
availability of the basic infrastructure like electricity, water, and road which are vital for the
smooth operation of the plant.
7.2. Estimation of equipment costs
Assuming new equipment is similar to a base item where cost data is available, Equation below
explains the equipment cost estimation process, where EPC is Equipment Purchased Cost, Q and
QO are the new and base equipment capacities, respectively, and a is the exponent of the power
law function given by the user. By default, this exponent is set as 0.6 for estimating new
equipment cost (Whiteside, 2007 and Harriso, 2003).The cost of major equipment was evaluated
based on cost data on 1997, 2000 and 2004 and bring back to equivalent cost to 2014 applying
cost index techniques.
EPC = Co (Q/Qo) a
Where, EPC= Cost of purchased equipment
Co= cost of base line equipment
Q= capacity purchased equipment
Qo= capacity baseline equipment
Calculating using above equation the equipment’s costs as summarized in table 7.1
Table 7.1: Specification and costs of the major equipment’s

7. No Name Size Unit Unit cost
($)
Total ($)
1 Raw material
storage
77(m3
) 1 2000 40000
2 Steeping tank 9.3(m3
) 3 1500 90000
3 De germination 6 (m3
) 1 3500 70000
4 Grinding 2ft? 1 1200 24000
5 Centrifuge 2m(diameter) 1 1200 24000
6 Separation unit 2m(diameter) 1 500 10000
7 Dryer 4tf2
2 3500 140000
8 Modification
tank
1.5(m3
) 2 2500 100000
9 Storage tank 10.5(m3
) 1 1000 20000
Tota
l
710,000 ETB
Source; A=coulsen and Sinnot volume-6, B= www.machte.com and www.alibaba.com,
C=Whitesides, W., 2007,D= Plant design and Economics, fourth edition
Estimation of total capital investment Cost
SINCE WE KNOW THE COSTS OF PURCHASED EQUIPMENT:
PEC = 25% OF FCI(FIXED CAPITAL INVESTMENT)
SO WE CAN CALCULATE THE FCI AND IT WILL BE
710,000 ETB /0.25 = 2,840,000 ETB
Items Cost (ETB)
Purchased Equipment costs (FCI) 710,000
Installation 9%FCI 255,600
Processing piping 8%FCI 227,200
Instrumentation7% FCI 198,800
Electrical 10% FCI 284,000
Buildings 6% FCI 170,400

8. Yard improvements 3% FCI 85,200
Auxiliary Facility 25%FCI 710,000
Total Direct Costs (DC) 2,641,200
Total Indirect Costs (IC):
Engineering 8% FCI 227,200
Construction 10% FCI 284,000
Total Indirect costs (IC) 511,200
Other Costs (OC)
Contractor’s Fee 3% FCI 85,200
Contingency 5% FCI 142,000
Total other costs (OC) 227,200
Fixed Capital Investment (FCI) Costs 2,868,400 ETB
Working capital (25%FC) 573,680
Total capital investment (TCI) 3,442,080
Estimation of total production or operation cost (TPC)
The production cost divide into manufacturing costs and general expenses cost. Total production
cost is the sum manufacturing and general expenses.
1.1.1. MANUFACTURING COSTS (MC)
MC =Direct Manufacturing Costs (DMC) +Fixed Manufacturing Costs (FMC) + Plant over
head cost (POC)
i. Direct manufacturing cost (DMC)
Direct production costs are calculated and equal the sum of the following items as specified
within the processes: Raw materials, operating Labor, direct supervisor and clerical labor,
Laboratory, Utilities and operating supplies.

9. Raw materials (CRM): two different major raw materials are used in the corn starch production
process in this project for economic purposes: corn/maize and water. Itemized raw material costs
are summarized and listed in Table 7.2
Table 7.2: Raw materials
Raw materials unit cost (ETB/kg) Annual amount (kg/year) Annual cost (ETB/year)
Corn /maize 5 819,600Kg/year 4,098,000
Water(m3
) 0.86 ETB 1,393.2 (m3
) 1200
Total 4,099,200
Source: material balance on steeping section 5.1
Utilities (CUT): three different utilities are examined in the CORN STARCH production process
in this project for economic purposes: electricity, Lubricating oil and cooling water. Itemized
utility costs are summarized and listed in Table 7.3.

10. Table 7.3 Utility costs for sodium bicarbonate production
Utility unit cost (ETB/unit) Annual amount Annual cost(ETB)
Electricity (Kw/year) .45 3090800 1390860
Lubricating oil (lt.) 6.2 4838.75 30,000
water (m3
) 4.3 *10-3
2786400kg/year 240
Total 1421100 ETB
Sources: materials and energy balance calculation section 5.1and 5.2
Operating Labor (COL)
The plant requires 35 workers, and their annual expenditure, including fringe benefits, is
estimated at Birr 336,960 ETB. For details see Table 7.4 below.
Table 7.4 Manpower requirement and annual labor cost
Sr.
No.
Description Req.
No.
Salary, (Birr)
Monthly Annual
1 Plant manager 1 4,500 54,000
2 Secretary 1 1000 12,000
3 Accountant 1 1200 14,400
4 Production head 1 1,800 21,600
5 Operator 6 6,000 72,000
6 Assistant
operators
3 3,600 43,200
7 Mechanic 1 1,200 14,400
8 Electrician 1 1200 14,400
9 Store keeper 1 500 6,000
10 Purchaser 1 1000 12,000
11 Sales man 1 1000 12,000
12 Personnel 1 900 10,800
13 Time keeper 1 400 4,800
15 Driver 2 700 16800

11. 17 Guard 2 500 6,000
18 Cleaner 1 400 4,800
Sub-total 25 22,300 280,800
Employee benefit
(10% BS)
2808
Total 336,960 ETB
Direct supervisor and clerical labor (CSC); the cost of supervisor and clerical labor is estimated
CSC = aSCCOL ( aSC = 0.18)
=18% of operating labor (COL)
= 0.18 *336,960= 60,653
Maintenance and repairs (CMR)
CMR = aMRFCI (aMR = 0.06)
= 0.06 * fixed capital investment (FCI)
=0.06*2,868,400
= 172,104
Laboratory charges (CLC)
CLC = aLCCOL (aLC = 0.15)
=15% of operating labor (COL)
=0.15*336,960
=50,544
Patents/royalties, CPR= aPRTPC (aLC = 0.03)
= 0.03TPC
Direct production cost (DMC)
DMC=CRM + CUT + 1.33 COL+ 0.03 TPC + 0.069 FCI
= 4,917,720+578,080 +1.33*336,960 +0.069*$2,868,400 +0.03TPC
=6,141875 +0.03TPC

12. ii. Fixed Manufacturing Costs (FMC).
This costs the sum of depreciation, insurance and taxes
The depreciation (DEP) item is calculated using a straight-line depreciation method,
considering a salvage value fraction (f) of the fixed capital investment (FCI), which is assumed
10 % in this analysis by default. The depreciation period (n) is set to ten years by default.
Equation 6.4 is used to calculate depreciation:
DEP=
= ………………2,868,400*(1-
0.1)/10
258,156
FMC = CTI + CDEP = 0.32 FCI +CDEP
= 0.32*2,868,400 +258,156

13. =1,176,044
7.4.2 GENERAL EXPENSES (GE)
GE = Administrative Cost (AC) +Other Costs (OC)
Administrative (AC) expenses include costs for executive and clerical wages, office supplies,
engineering and legal expenses, upkeep on office buildings, and general communications.
Other costs (OC); includes distribution, selling, research and development costs
GE=Administrative Cost (AC) +Other Costs (OC) =50 %( operating labor + supervision +
Maintenance)
Administration costs (CAD)
CAD = aAD (COL +CSC + CMR); (aAD = 0.15)
CAD = aAD (COL + 0.18COL + 0.06 FCI) = 0.177 COL + 0.009 FCI
Distribution and sales costs (CDS)
CDS = aDS TPC =0.11 TPC ; (aDS = 0.11)
R&D (CRD)
CRD = aRD TPC = 0.05 TPC ; (aRD = 0.05)
Financing costs=0.04 FCI
GE =CAD +CDS +CRD +CF
GE = 0.177 COL + 0.009 FCI + 0.11TPC + 0.05TPC + 0.04 FCI
GE = 0.177 COL + 0.049 FCI + 0.16TPC
= 0.177*336,960 +0.049*2,868,400+0.16TPC
=200,194 +0.16TPC
TPC = MC + GE = (DMC+ FMC ) + (AC +OC)
TPC = CRM+CUT +1.33 COL+ 0.03 TPC+ 0.069 FCI + 0.032 FCI +CDEP +0. 708 COL + 0.032
FCI + 0.177 COL + 0.009FCI + 0.16 TPC
TPC = 1.24(CRM+CUT +CDEP) + 2.74 COL + 0.23 FCI

14. = 1.24*(4,917,720+578,080 +258,156) +2.74*336,960 + 0.23*2,868,400
=$1,369,503.8……(6,717,908 ETB)
Therefore;
DMC=6,141875 +0.03TPC
=6,141875 + 0.03 *6,717,908
= 6,343,412
GE=200,194 +0.16TPC
=200,194 +0.03*6,717,908
= 401,731
Unit Cost Analysis
The unit costs for corn starch production are calculated as the quotient of the annual operating
cost divided by the annual production rate.
Unit cost (ETB/kg) =
= = 6,717,908 /500,000 /
=13.5 ETB/kg
Corn starch selling Price
In order to conduct the profitability analysis, the selling price for corn starch must be first
identified. From local?26? market of the current corn starch price is 15?? per kilogram and
international selling price is $0.76 per kilogram of corn starch. So the unit corn starch price per

15. kilogram is calculated and equals ETB13.5/kg. For profitability let it will sell with current local
market value.
Profitability Analysis
According to the projected income statement, the project will start generating profit in the first
year of operation. Important ratios such as profit to total sales, net profit to equity (Return on
equity) and net profit plus interest on total investment (return on total investment) show an
increasing trend during the life-time of the project. To calculate the gross profit let we calculate
the sales value per annual.
i. Sales (Sales Revenue)
Sales= unit cost * annual capacity
=13.3??$/kg*500,000kg/year
6750000 ETB /year if 14
7,000,000 ETB
ii. Gross profit (GP)
Gross profit (GP) = Sales – TPC
=7,000,000-$8,717,908
=880,496.2 32,092 = 282092
iii. Netprofit (NP)
Net profit=Gp-[sales –TPC]*tax rate
=Gp-Gp*0.35
=Gp [1-0.35]
= 282092*0.65
=183,360 ETB

16. iv. Turn over Ratio
Turnover ratio is defined as the ratio of gross annual sales to the fixed-capital investment where
the product of the annual production rate and the average selling price of the commodities are the
gross annual sales figures. The reciprocal of the turnover ratio is sometimes defined as the
capital ratio or the investment ratio. Turnover ratios of up to 5 are common for some business
establishments and some are as low as 0.2. For the chemical industry, as a very rough rule of
thumb, the ratio can be approximated as 1.
Turnover=
7,000,000 /2,868,400
=
= 2.444
So, our project acceptable to establishment since turn ratio between the maximum and minimum
range [0.2-5]

17. 7.61 PAYBACK PERIOD
The payback period is a simple indicator measuring how long it takes to recover the initial
investment in the corn starch production plants. When choosing among a few mutually exclusive
projects, the project with the quickest payback is preferred. The payback period is calculated as
the quotient of the total capital investment divided by the net profit as shown in equation below.
Payback period =
8,717,908/183,360 = 36?????
=
=3.6years
1.1.1. CASH FLOW
Table 7.5: cash flow of sodium bicarbonate Production
Year Fixed
capital
Working
capital
sales Total
operating
cost
Gross
profit
Depreciation Taxes N
-2 -1,661,404 0 0 0 0 0 0 0

18. -1 - 1,661,404 0 0 0 0 0 0 0
0 0 -415,351 0 0 0 0 0 0
1 0 0 2,250,000 1,369,503.8 880,496.2 149,526.4 308,173.7 5
2 0 0 2,250,000 1,369,503.8 880,496.2 149,526.4 308,173.7 5
3 0 0 2,250,000 1,369,503.8 880,496.2 149,526.4 308,173.7 5
4 0 0 2,250,000 1,369,503.8 880,496.2 149,526.4 308,173.7 5
5 0 0 2,250,000 1,369,503.8 880,496.2 149,526.4 308,173.7 5
6 0 0 2,250,000 1,369,503.8 880,496.2 149,526.4 308,173.7 5
7 0 0 2,250,000 1,369,503.8 880,496.2 149,526.4 308,173.7 5
8 0 0 2,250,000 1,369,503.8 880,496.2 149,526.4 308,173.7 5
9 0 0 2,250,000 1,369,503.81 880,496.2 149,526.4 308,173.7 5
10 0 0 2,250,000 1,369,503.8 880,496.2 149,526.4 308,173.7 5
Source: “Economic evaluation report” and “Cash flow analysis report” from Plant design and
Economics for chemical engineers, Fourth edition and Sinnott, 1993 and sodium bicarbonate
production data.
7.62BREAKEVEN POINT ANALYSIS (BEP)
Breakeven point is the point when total annual production cost equals total annual sales. That is
the point where profit equals zero. The breakeven point is determined from the relation:
BEP =
Where Sup=Selling price per unit of production
Vcup = Variable costs per unit of production
vcup=
=
=2.71$/kg

19. BEP =
=
=116,297kg/year
BEP(%) = *100%
= 38.7%