18.0,
14.0
I
I
I
I
I
I
1940
1942
1944
1
I
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I
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I
1946
1948
1950
I
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-
1952
1954
Figure 7. Comparative starch costs 1.
2. 3.
Corn Tapioca Domestic potato
4. Imported potato 5. Brazilian tapioca 6. Waxy maize
it might compete with petroleum or cellulose as a starting chemical raw material. Petroleum, however, being relatively cheap, enjoys an economic advantage difficult to overcome in large volume use. If a starch composed mostly of the straight chain fraction could be produced perhaps it would be competitive with cellulose in the making of films and fibers. The geneticist is trying to breed a variety of hybrid corn with predominantly straight chain starch molecules. The possible cost cannot be predicted a t this time nor can the properties of the resulting material. The starch chemist is by no means neglecting the profound possibilities wrapped up in the corn kernel. However, he sees no quick answer to the question of eliminating grain surpluses through chemical changes in starch. The utilization of starch has expanded from 800,000,000 pounds to 2.4 billion pounds in the past 25 years. Assuming another consumption boost of 1.6 billion pounds in the next 10 years, the increase would utilize only 53,000,000 additional bushels of corn. As the current corn surplus is about 900,000,000 bushels, the chemical utilization of starch seems to offer no real solution for the surplus problem. Being a useful commodity to a large and important segment of American industry in fields other than food, starch will doubtless be turned increasingly to nonfood purposes. Food must remain the primary function of starch and its derivatives, however, and this function will in all likelihood maintain its dominance as the population multiplies. ACKNOWLEDG'MENT
industry. Sorbitol and mannitol are notable examples of chemicals developed from dextrose. The research chemist, realizing that starch is a cheap and abundant organic raw material, has looked with interest to its competitive possibilities. Seeing it as a high polymer a t a cost of about seven cents a pound, the chemist has thought that perhaps
Data on starch supplies and percentages were obtained from the U. S. Department of Agriculture and U. S. Department of Commerce. Statistical data prior to 1946 was obtained from the Corn Refining Statistical Bureau and Price-Waterhouse and Co. after 1946. Price data was obtained from Stein-Hall Co. RECEIVED for review March 25, 1955.
ACCEPTED
May 9, 1955.
Economics of Furfural Production H. R. DUFFEY AND P. A. WELLS, JR. The Quaker Oats Co., Chicago, I l l .
P
ENTOSANS occur in varying percentages in almost all products of vegetable origin. Very few uses have been found for those parts of the plant (stalks, leaves, and hulls) that are high in pentosans, and as a result, large quantities of pentosancontaining material are available as wastes or as by-products of agricultural operations. One use of pentosans that has reached commercial proportion is the manufacture of furfural. As a result, many individuals have proposed furfural plants based on almost any kind of vegetable material that contains some pentosan. As a general policy, we attempt t o keep informed on all possible raw materials and have talked with various companies about the advisability of building furfural plants based on pea vines, flax shives, tobacco stems, coffee husks, reeds, grapevine cuttings, and other waste materials not currently used in the production of furfural. While furfural can be made from these materials and many others, economics must determine which materials will be used and where. This article outlines some of the factors which should be considered in evaluating a raw material for the commercial production of furfural. I n order to place the problems of manufacture and sale in proper perspective, it may be helpful to have some basic infor-
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mation on raw material supply; existing furfural production capacity; competition between furfural and other chemicals; and conditions in the United States compared with those abroad. RAW MATERIAL SUPPLY
Examination of possible raw material sources reveals that there is no shortage of raw materials for the manufacture of furfural. If all the wastes of agriculture and industry from which it is theoretically possible to manufacture furfural were put to such use today, the resulting quantity of furfural would be staggering. Just a few raw material sources should be mentioned in order to put the size of the present furfural market and probable future markets in proper perspective. The corncobs harvested annually in the United States each year represent a raw material source which exceeds by 40-fold the present market for furfural. Sugarcane bagasse produced in the Western Hemisphere would produce 25 times as much furfural as the present United States market consumes. Paper-mill wastes and those waste fractions burned or consumed chemically in paper mills in North America could likewise be used to produce about 25 times as much furfural as present United States consumption. The total United States
INDUSTRIAL AND ENGINEERING CHEMISTRY
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Carbohydrate Raw Materials oat hull crop, the great majority of which is fed directly with the rest of the oat, would produce 20 times as much furfural as is used by the domestic market. Cottonseed hulls, which are all collected and processed, could be used t o produce approximately four times the current furfural requirements. For the present, as well as the future, the quantity of waste materials susceptible of being used in the manufacture of furfural can be expected to exceed any conceivable markets by a wide margin. Consequently, possession of raw materials that might technically be satisfactory for the manufacture of furfural is not a guarantee of economic success. There are simply too many other similar situations for the market to support the exploitation of them all. FURFURAL PLANT PRODUCTION CAPACITY
The world market for furfural has grown from nothing in 1922, when The Quaker Oats Co. first undertook commercial production, t o about 100,000,000 pounds per year today. Plant capacity has expanded as the market has increased and, in the last few years, plant capacity both in the U. S. market and abroad has increased more rapidly than consumption. As a result, Rorld production capacity in 1955 will be about twice the estimated consumption. This plant expansion has taken two different directions. In the United States, plants have become larger and more efficient in order better t o meet competition from other chemicals. I n Europe, where strenuous efforts are being made t o ensure selfsufficiency and where many special incentives are offered to stimulate new industry, the tendency is t o build small, inefficient plants. Reliance is placed on currency restrictions, heavy import duties, and restrictive import licenses t o protect the local producer. Furfural produced in the United States and selling for 11 cents per pound f.o.b., point of production, delivers in most European countries at almost twice the U. S. price. These high prices, along with the policies of individual countries, stimulated local production. Today there is a substantial excess of production capacity over consumption in Europe. For the immediate future there is little if any room for new capacity for production of furfural here or abroad unless it can be operated profitably a t price levels sufficiently low t o replace existing capacity.
COMPETITION BETWEEN FURFURAL AND OTHER CHEMICALS
Although furfural has a wide variety of uses, only four or five require any important volume. Furfural competes with other chemicals in all its important applications. I t s principal use today as a raw material in organic synthesis offers the greatest opportunity for the future, but here the risks are also greatest. In the production of nylon, for example, furfural competes with cyclohexane and with butadiene. Thus, in evaluating the market, one must consider not only the market for nylon but also the relative advantages of using the competing chemicals and the possibility of using other chemicals not now used. EUROPEAN VERSUS U. S. CONDITIONS FOR PROFITABLE FURFURAL OPERATIONS
The contrast between conditions required for a profitable furfural operation in Europe as compared with the United States may be illustrated by considering a furfural plant which was recently completed in Europe. This plant was built t o use a high priced raw material available in limited quantities in a region where fuel is very expensive. The plant was designed to obtain high yields of furfural with low fuel consumption. The market for the product is protected b y import restrictions. This plant is reported to have cost 30 cents per pound of annual furfural capacity. If we consider that over a 10-year period the plant is operated on the average of 75% of capacity and allow 15% per year for depreciation and maintenance and 7.570 return on the investment after taxes of 50%, the investment charges alone would exceed the U. S. selling price of furfural. To these charges must be added the cost of raw material, plant operation, administration, research, and sales. While special conditions have permitted this development abroad, it is obvious that such an operation would not be competitive in the United States. RAW MATERIAL CONSIDERATIONS
Since raw materials for the manufacture of furfural are so plentiful, i t is extremely important for the prospective manufacturer of furfural t o be competitive with existing manufacturers as well as others who may possibly enter the field in the future. Despite the fact that furfural can be made from so-called waste
Among the industries that utilize carbohydrate raw materials, the manufacture of furfural is unique. Whereas pentosans appear in the products of several industries, i t is only in the manufacture of furfural that pentosan is specifically used and where other carbohydrates would be entirely unsatisfactory. The quantity and variety of materials from which furfural can be produced are enormous. Markets for furfural are, at least by comparison, extremely limited. While furfural probably cannot be made economically from other raw materials such as coal or petroleum, i t competes directly in almost all its present uses with materials of such origin. As a result one can anticipate the use of only those pentosan sources that can be exploited at the least cost to produce the cheapest furfural. Today the two largest items of cost in the manufacture of furfural are raw material costs and costs associated with an investment which is comparatively large for the value of the product obtained. These considerations dictate the characteristics of a suitable raw material. The ideal raw material is one which is inexpensive when delivered to the digester in a form suitable for use and which can be collected in large enough quantity at a suitable location on a sufficiently regular and reliable basis to obtain a maximum of furfural with a minimum investment.
July 1955
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materials, the two factors that exert the greatest influence on the cost of producing furfural are directly related to the raw material used. These costs are the cost of the raw material itself and the cost associated with the large investment involved in the construction of a furfural plant suitable for the conversion of the particular raw material involved. While other costs in the manufacture of furfural cannot be overlooked, a situation that permits the use of a low cost raw material in a plant where the investment per pound of capacity is small is almost certain to be attractive. It is often easy to jump to the conclusion that, because a material is regarded as a waste, its cost is zero. Actually, the cost of most furfural raw materials is the sum of six items. These are the value of the raw material a t the point of production, the cost of collection, the cost of transportation to the furfural plant, the cost of storage to ensure year-round supply, the cost of preparation for use, and the cost, which may very well be a credit, of disposing of the residue and other possible by-products from the process. It is extremely difficult t o generalize regarding all possible raw materials but the following specific examples may be helpful. The value of the raw materials a t the point of production is probably subject to greater variations than any of the other costs. Certain paper-mill wastes may be suitable for the manufacture of furfural and these may be regarded as having in many cases a negative value since they represent a waste disposal problem which may be partially solved as a result of making furfural from them. At the other end of the scale are raw materials such as cottonseed hulls and oat hulls. These materials are frequently used for animal feeds and have commanded a fairly high price during most of the last decade. From time to time and from place to place cottonseed hulls and oat hulls have varied widely in price. During the last year oat hulls have commanded prices from $22.00 to $1.00 per ton as an animal feed. Other possible raw materials such as corncobs, rice hulls, and sugar-cane bagasse also frequently have some value a t the point of production. Some use of corncobs has been made in feed supplements and in the feeding of whole ground ears, but in both cases it is extremely difficult to assess the value of the corncobs accurately. Rice hulls have had some value as an anticaking agent when added to fertilizers. Substantially all the bagasse produced can be used advantageously a t the point of production as fuel in the sugar miI1. Hence, the value of bagasse is a t least equal to the cost of replacement fuel. It is frequently necessary to transport raw materials long distances in order to have a sufficient quantity to permit the operation of an economical plant, Transportation may not only be a large expense but may limit the use of by-products. I n only the largest sugar mills is the quantity of bagasse handled large enough to permit the construction of an economical furfural unit. The transport of bagasse to central points results in disadvantages in the utilization of heat which can be developed from the furfural residue, Oat-hull, cottonseed-hull, and rice-hull production at any individual mill is not sufficiently large to support an economical furfural unit and, therefore, these materials must be assembled a t central points or supplemented with other raw materials which must be transported to the point of production. Corncobs are not assembled a t any point in appreciable quantity, and the cost of getting them to the furfural plant is almost entirely one of collection and transportation rather than replacement value at the point of production. Storage charges can be a very significant item in the cost of raw materials. As a result of the high investment necessary in a furfural plant we have not found it practical to operate a plant on a seasonal basis. Since most raw materials are available only seasonally, it is frequently necessary t o provide large quantities of stored raw materials for use during the seasons when the raw material is not being produced. It is seldom practical to provide inside storage since one is dealing with an enormous quantity of bulky, inexpensive material. Consequently, some deterioration 1410
is experienced and this factor must be added to the cost of moving raw material in and out of storage and the cost of carrying this large inventory in calculating raw material costs. As much aa 9 months’ storage of bagasse must be provided, depending on the location of the sugar mill. Approximately 6 months’ storage is necessary for cottonseed hulls and rice hulls. Considerably less storage is needed for corncobs at the present level of consumption since a fair proportion of the crop becomes available throughout the year as it is shelled and shipped. If, in the future, a larger percentage of the available corncobs is utilized, more storage than is now necessary will be required t o ensure uniform availability. On arrival a t the furfural plant a certain amount of preparatory processing is desirable in the use of most solid raw materials in order to increase the bulk density or increase the yield of furfural. The extent of this preparation will depend on the economics of furfural manufacture a t the point in question and on the particular raw material and process involved. The necessity for disposal or possibility of use of by-products is of the greatest importance in choosing a raw material source and the location for processing thereof. Facilities to dispose of all waste materials produced in the manufacture of furfural from solid raw materials without contributing to stream or air pollution may be equal in cost to the furfural plant proper. Since the choice of a particular raw material may dictate the type of location that can be used for a furfural plant, provision for the disposal of wastes is inherent in the raw material used. The fuel requirements of a cane sugar mill are high and therefore, although special facilities are required t o burn furfural residue for the production of steam or power, this by-product has appreciable net value as fuel. I n most sugar mill locations air and stream pollution are not serious problems. Corncobs, oat hulls, and cottonseed hulls are likely t o be used at a transportation center where collection and transportation costs are a t a minimum. Under these circumstances, the furfural plant will be in or near a population center and air and stream pollution may be a serious consideration. I n this type of location the value of the solid by-products as fuel, to the extent they exceed the fuel requirements of the furfural process, may be appreciable. Other uses for the solid by-products are possible but t o date none has been developed that can absorb the production of a large furfural plant. Liquid wastes from the production of paper and other types of pulp require special consideration. Obviously here transportation t o a central point from several mills and the storage of such liquids for any appreciable length of time are out of the question. I n some cases the pentoses and pentosans which have been solubilized and removed from the pulp itself have some value as fuel in the over-all process. More often, however, these liquid wastes containing pentoses or pentosans have no value whatsoever. Nevertheless, when a careful analysis has been completed it frequently develops that appreciable cost is involved in getting these liquid wastes in adequate quantity and in a condition suitable for the production of furfural. I n general, the quantity of furfural raw material produced at any one pulp mill is not sufficiently large to permit the construction of an economical furfural unit. Therefore, it is desirable t o make modifications in the pulp process and in the mill itself in order to increase as much as possible the availability of raw material. Frequently operations are necessary either to separate chemicals from the waste pentoses in order to re-use these chemicals or to separate such chemicals from the waste pentoses in order to make the pentoses usable as raw materials for furfural. These operations represent sizable costs and generally what has started out as a waste material has a very real cost by the time it is used in the manufacture of furfural. As already stated, the quantity of raw material which is theoretically available is far in excess of foreseeable requirements. Some increase can be expected in the value of principal raw materials at the point of production due to developments which are expected t o increase their value for other uses. Improvements
INDUSTRIAL AND ENGINEERING CHEMISTRY
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Carbohydrate Raw Materials in techniques for collection, storage, and handling of raw materials and improvements in processing to obtain higher yields of furfural and additional value from by-products can be expected to offset the effect of increased demand for suitable raw materials. PLANT INVESTMENT
The other principal cost in the manufacture of furfural is a function of the size of the investment. The size of this investment is influenced greatly by the characteristics of the raw materials being employed. Low density and low pentosan content or, in liquid wastes, high dilution in the raw material tend greatly to increase original costs in the furfural plant. Likewise seasonal availability of raw materials which results in large storage facilities and limited availability which results in the construction of small units can appreciably increase the investment cost. As mentioned before, certain raw materials and certain locations may require waste disposal and pollution control facilities nearly equal in cost to the cost of the furfural plant. Finally, unusually large investment costs may result from attempts t o decrease certain operating costs and to increase yields of furfural. With the techniques available today it might be possible to construct a furfural plant to use a nearly ideal raw material for approximately 10 cents per pound of furfural per year. I n order to reach such a low investment cost it would be necessary to build the plant for a raw material with the density, pentosan content, and particle size of a material such as oat hulls or cottonseed hull bran. It would be necessary t o have this raw material available throughout the year in sufficient abundance so that practically no storage would be necessary and so that the plant could operate at least 330 days per year producing a t least 30,000,000 pounds of furfural. It would also be necessary, in order to meet this figure, t o keep waste disposal facilities to an absolute minimum. Furfural plants have been built at costs all the way from 10 cents per pound of furfural per year t o 35 cents per pound of furfural per year. One may expect that in the future as well, considerable differences in investment cost will appear between different plants due t o peculiar circumstances a t particular locations. The size of the investment which will be justified will depend on the cost of raw materials, the possibilities of integration with other processes, the selling price of the furfural, and the return on investment necessary t o attract capital to the particular venture in question. As a result of the sizable investment necessary in a furfural plant an appreciable fraction of the selling price must go as profit to the investor in order to represent a satisfactory return on the investment, Naturally the return necessary to encourage investment is dependent on the risks inherent in the venture. The principal risks are failure of the raw material supply and inability to sell furfural a t a price high enough to produce a profit or possibly t o sell furfural a t any price. The risk of losing customers to other manufacturers of furfural can be minimized by having lower costs than competing producers of furfural. The risk of losing consumers to other chemicals can never be eliminated, but it can be reduced somewhat by suitable contractural arrangements. The importance of a continuous, reliable supply of raw material cannot be overemphasized. Furfural plants are large expensive installations which cannot be moved to new locations in the event that local raw materials for furfural become unavailable. The large investment makes operation a t or near capacity necessary in order to obtain satisfactory returns on investment. It is, therefore, necessary from the point of view of safety of the investment as well as a satisfactory return from the operation to choose raw materials and a location for their exploitation which
will be satisfactory over a long period of time. Furthermore, since reliability of supply is of the utmost importance to the consumer of furfural, reliability of supply of the raw materials is of great importance to the producer of furfural in order that he may make sufficient guarantee of future availability to enable him to obtain customers for his product. The likelihood of a continued supply of a specific raw material a t a satisfactory price must be judged on the merits of the individual situation. Chances of good continued supply are best where the furfural plant draws only a small percentage of the raw material from the area in which it is located or where the plant is operated by and in connection with the producer of the raw material and his mill. It is wise to avoid the use of materials where availability is extremely sensitive to weather and other conditions affecting crops. The use of a special raw material such as liquid pulp-mill wastes may be particularly dangerous. Here changes in the amount and type of pulp being produced or changes in pulping techniques may have disastrous effects on the quantity and quality of wastes being made available for production of furfural. Since investment costs are usually very high in the type of process used for such liquid wastes, lost production is particularly expensive. Because plants are designed specifically for the waste in question other raw materials cannot be used in the event that the primary raw material is unavailable. Probably the two greatest risks to raw material supply are development of other higher value uses for the proposed raw material or changes in the process in which the raw material is produced. The producer of furfural has very little control over changes in the processes which produce the raw material since usually the economics of the process producing the raw material are controlling, and the furfural tail cannot wag the raw material producing dog. Something can be done, however, to combat the invasion which other higher value uses may make into the supply of suitable furfural raw materials. I n most raw materials for the manufacture of furfural less than 10% of such material eventually appears as furfural. Better utilization of the remainder will go far toward combatting the effects that possible future increases in the price of raw materials may have on the cost of producing furfural. SUMMARY
Although the next few years may see production capacity appreciably greater than consumption, we expect that, over the long term, the markets for furfural will continue to grow and that it will be desirable to exploit additional raw material sources not now economical. However, the raw materials available for furfural production are so plentiful that the possessor of a possible raw material should consider furfural production only under the following conditions: 1. There should be assurance of a long term raw material supply a t a reasonable price, The effect of weather on raw material availability, of possible competing uses for the taw material, and, for by-product raw materials, the effect of possible changes in process on raw material availability should be considered carefully. 2. The over-all production cost should be low enough to permit successful competition with existing and potential producers and to obtain a satisfactory return on the investment. 3. There should be an adequate assurance of sales which will allow the plant to run a t or near capacity. Obviously, such an expensive plant should not be built on the basis of temporary shorta es due to abnormal and temporary demands. 4. bhe production should be on a sufficient scale to support a research staff capable of competing with those of other producers. The management should be willing to make additional investments as the research results indicate the desirability of modifications or additions to the original plant. RECEIVED for review October 22, 1954.
ACCEPTED April 6, 1955.
END OF SYMPOSIUM July 1955
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