Ideas
Exchange
Column
l&ECs features bring in lots of f a n mail. Readers want information, and they pass along ideas. Ideas Exchange Column is a careful screening of this correspondence. This is not a place for praise or criticism; it is a source of technical questions and their factual answers.
Chlorine Manufacture SIR:
M a n y readers, both domestic a n d foreign, have taken the time to point out a fundamental error in the Cost column on Chlorine Manufacture [ I / E C 49, No. 9, 55 A (September 1957)]. This error, a misplaced decimal point, resulted in d a t a for plant depreciation and other over head costs which were considerably below actual costs. T h e production costs as shown in the column were,
however, in line with reported av erage costs for the industry. T h u s , the usual check failed to disclose the obvious error which would normally have been noted immediately. T h e simple correction of this error in the original table results in pro duction costs which are far in excess of reality. T h u s , the validity of the other tabulated d a t a is in doubt. T h e entire series of Cost columns dealing with individual chemical processes illustrate the economic factors underlying the selection of
Unit Requirements and Costs of Electrolytic Chlorine and Caustic Soda" 100 U n i t s p e r D a y C a p a c i t y 1 u n i t = 1 t o n chlorine p l u s 1.12 t o n s caustic soda 9 0 % load factor Materials Salt Graphite Soda Hydrochloric acid, 3 0 % Caustic soda Mercury Utilities Power, kw.-hr. Steam, M lb. Water, M gal. Labor M a n hours
Cost, S/lb. 0.0052 0.4200 0.0300
D i a p h r a g m Cells L b . / u n it $/unit 3500 7 13
18.20 2.94 0.39
0.0180 3 0.0290 1 2.9600 R a w material cost
0.05 0.03
0.0075/KWH 0.75/Mlb. 0 . 0 3 / M gal. Utilities cost 2.00 Total
Overhead 6 Royalty Administrative expense approx. 2 % of sales price Depreciation, at 6% of plant c o s t / y e a r (Diaphragm, 5 1 1 , 0 0 0 , 0 0 0 Mercury $ 1 2 , 0 0 0 , 0 0 0 ) Taxes and insurance at 2 % of plant c o s t / y e a r Total
3400 6
17.68 2.52
•.. 45 17 0.36
0.81 0.49 1.07 $22.57
3500" 1.06» 3.26"
26.25 0.80 0.10 $27.15
$ 21.61
3040" 10.1" 31*
22.80 7.58 0.93 S 31.31
3.7» S
7.40 7.40
$
6.68 6.68
7.28 $ 7.28
0.25
1.50
2.60
2.60
20.00
21.82
6.68 $ 29.53
7.28 $33.20
Maintenance at 2 % of total plant cost/year Total
M e r c u r y Cells Lb./unit $/unit
4.8 11
9.60 S 9.60
Estimated cost of purifying 9.50 diaphragm caustic Estimated production cost $106.03 $99.80 per unit of Cl2-NaOH ° U n i t s of m a t e r i a l or utilities per u n i t of p r o d u c t i o n . b O v e r h e a d a n d sales costs n o t itemized a b o v e are n o t considered in a b o v e e s t i m a t e .
plant capacity for profitable opera tion a n d for determination of pro duction cost. Actual costs informa tion is rarely released by commercial firms. Considerable d a t a are avail able, however, from various sources. These d a t a generally deal with prac tical material, labor, a n d utility re quirements and serve as the basis for production cost estimates. Certain conventions, used in cost estimates, have been generally valid. Among these are the 1 0 % charge for depreciation per year of plant invest ment and similar factors for other overhead costs. Following the disclosure of the error in the original column, the entire basis for the cost calculation was re-evaluated. Investigation in dicated that the previous assumed cost for utilities was so high as to render a chlorine-caustic soda plant uneconomical. Depreciation at 6 % per year was found to be more realistic for an operation of this type. Further, in the original columns, production costs were determined for chlorine only, with the caustic soda being considered a by-product and arbitrarily credited at two thirds of its sales price. This procedure is normal in m a n y instances. How ever, in this instance the two chem icals are coproducts and it is more realistic to specify production costs on a per unit production basis. I n the revised table, the unit of produc tion is one ton of chlorine plus 1.2 tons of caustic. While the actual production costs for chlorine—caustic soda plant will naturally vary with specified site conditions a n d local material and utility costs, this revised table should be reasonably representative*of cur rent costs. I regret that this error was intro duced in the original column and thank the m a n y readers who took the time to point out this discrepancy. W A L T E R L.
HARDY
Foster D. Snell, Inc. 29 West 15th St. New York 11, Ν . Υ. VOL. 50, NO. 5
•
MAY 1958
87 A
