CHAPTER 7

COST ESTIMATION

297
 CHAPTER 7
COST ESTIMATION

I. Total Capital Investment (TCI)

TOTAL CAPITAL INVESTMENT

Plant Capacity: 1400 kg collagen daily

Plant Operation: 24 hours/day
Dollar Exchange: 1 USD = Php 50.59

A. Direct cost
Cost (Php) Exhibit %
Purchased Equipment Delivered Php 39,149,628.47 A 21.46%
Installation Php 15,268,355.10 B 8.37%
Instrumentation and Control Php 10,178,903.40 C 5.58%
Piping System Php 12,136,384.83 D 6.65%
Building Php 11,353,392.26 E 6.22%
Electrical System Php 3,914,962.85 F 2.15%
Yard Improvement Php 4,697,955.42 G 2.58%
Service Facilities Php 21,532,295.66 H 11.80%
Total Direct Cost Php 118,231,877.97 64.81%

B. Indirect cost
Engineering and Supervisor Php 12,527,881.11 I 6.87%
Construct Expenses Php 13,310,873.68 J 7.30%
Legal Expenses Php 1,565,985.14 K 0.86%
Contractor's Fee Php 7,438,429.41 L 4.08%
Contingency Php 14,485,362.53 M 7.94%
Total Indirect Cost Php 49,328,531.87 27.04%

Fixed Capital Investment Php 167,560,409.84 91.84%

Working Capital Php 14,880,268.80 N 8.16%
Total Capital Investment Php 182,440,678.64

II. Total Production Cost (TPC)

TOTAL PRODUCTION COST

298
I. Manufacturing Cost Cost (Php/kg) Exhibit %
A. Direct Production Cost AA
Raw Material Php 239.09 AA-1 62.15%
Operating Labor Php 24.08 AA-2 6.26%
Direct Supervisor and Cleric Labor Php 3.62 AA-3 0.94%
Utilities Php 5.64 AA-4 1.47%
Maintenance and Repair Php 6.44 AA-5 1.67%
Operating Supplies Php 0.97 AA-6 0.25%
Laboratory Charges Php 3.61 AA-7 0.94%
73.68
Total Production Cost
Php 283.45 %

B. Fixed Charges BB 0.00%

Depreciation Php 8.94 BB-1 2.32%
Local Taxes Php 2.68 BB-2 0.70%
Insurance Php 0.75 BB-3 0.20%
Total Fixed Charges Php 12.38 3.22%

III.Plant Overhead Cost Php 20.48 CC 5.32%

82.23
Total Manufacturing Cost
Php 316.31 %

IV. General Expenses DD

Administrative Cost Php 6.83 DD-1 1.77%
Distribution and Marketing Php 42.32 DD-2 11.00%
Research and Development Php 19.23 DD-3 5.00%

17.77
Total General Expenses
Php 68.38 %
Total Production Cost Php 384.69

299
 III. SCHEDULE A-1 (PEPSIN DIGESTER)

Equipment: Pepsin digester

Equipment code: J-3
Type: Jacketed, Enzymatic reactor
Material of Construction: SS316

From Equipment Design:

Capacity: 10.0 m3
No. of Units 1
Pressure: 22.04 psia

Cost of Reactor:

From Plant Design and Economics for Chemical Engineers by Peters and

Timmerhaus 5th edition, Figure 13-15, p. 628

Cost of Reactor2002 = $ 60,000 for 10.0 m3 capacity

Computing for the Present Cost of Reactor:

604
Present Cost of Reactor2019 = ( $ 60,000 ) ( 390.4 )
Present Cost of Reactor2019 = $ 92,827.87

Cost of Insulation:

From Plant Design and Economics for Chemical Engineers by Peters and

Timmerhaus 5th edition, Figure 13-15, p. 628

For an insulation thickness of 50 mm,

Purchased Cost per m2 of Insulation installed= $ 101

300
Computing for the purchased cost of insulation for a 13.0 m2 heat transfer area,

Purchased Cost of insulation = $ 101 (5.0)

Purchased Cost of insulation = $ 1313.00

Computing for the present cost of insulation:

604
Present cost of insulation = ( $ 1313 ) ( 390.4 )=$ 2,031.38
Cost of Impeller:

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 12-42 p.516

For a Pitched-blade impeller with motor size of 10 hp:

Purchased Cost of Impeller (2002) = $ 16,000

For stainless steel and rotational speed of 125 rpm, adjustment factor is 1.85.

Purchased Cost of Impeller (2019) = $ 16,000 ( 1.85 ) =$ 29,600

Computing for the Present Cost of Impeller,

604
Present Cost of One (1) Impeller = $ 29,600 ( 390.4 )=$ 45,795.08

Total Present Cost of J-3 = $ 92,827.87+ $ 2,031.38+$ 45,795.08

Total Present Cost of J-3 = $ 140,654.33

Total Present Cost of J-3 in Philippine Currency:

Total Present Cost of J-3 = $ 1 40,654.33 ( Php1 USD

50.59
)
301
Total Present Cost of J-3 = Php7, 115,702.56

Cost of Reactor:

From Figure 15-17 of Peters and Timmerhaus 5th Ed.:

Purchased Cost of Reactor (2002): $60,000

302
Cost of Insulation:

From Figure 15-17 of Peters and Timmerhaus 5th Ed.:

For insulation thickness of 0.55 m:

Purchased Cost of Insulation (2002) = $102 per m2 installed

303
Cost of Impeller:

From Figure 12-53 of Peters and Timmerhaus 5th Ed.:

Purchased Cost of Impeller (2002) = $16,000

For SS316 and rotational speed of 125 rpm, adjustment factor is 1.85

304
 SUMMARY OF FIGURES USED IN SCHEDULE A-1
(PEPSIN DIGESTER)

Equipment Capacity (F-2) 1.295 m3

No. of Units 1
1 USD equivalent to Php Php 50.59
Purchased Cost of Reactor (2002) $60,000
Present Cost of Reactor (2019) $92,827.87
Purchased Cost of Insulation (2002) per m2
$1,313.00
installed
Present Cost of Insulation (2002) per m2 installed $2,031.38
Purchased Cost of Impeller (2002), Single $16,000
Present Cost of Impeller $29,600.00
Total Present Cost of F-2 $140,654.33
Total Present Cost of F-2 in Php Php 7,115,702.56

305
 IV. SCHEDULE A-2 (VACUUM CRYSTALLIZER)

Equipment: Vacuum crystallizer

Equipment code: F-2
Type: Salt-out, Crystallizer
Material of Construction: SS316

From Equipment Design:

Capacity:
No. of Units
Pressure:

Cost of Crystallizer:

Purchased Cost of Salting Out Crystallizer (1990)

Present cost of vacuum crystallizer with volume of 90 gal is $300,000 as of

January 1990. (PD&E for ChE, Peters, Timmerhaus, & West 4 th Ed.; Fig. 14-76,

p561).

306
 0.60
4.07 ton
Present Purchased Cost of Crystallizer =($ 300,000.00) ( 90 ton ) ( 604
356 )

Present Cost of Crystallizer ( 2019 )=$ 79,418.07

Cost of Pump:

307
Pressure Drop:

∆ P= ρslurry g hTDH

kg N −m
(
∆ P= 1,165
m3 )(
9.889
kg )
=11,520 Pa=1.67 psi

Purchased Cost of Pump (1990)

lb lb
Capacity Factor=gpm x 2
=( 73.31 gpm ) ( 1.67 psi ) =122.43 gpm 2
¿ ¿

lb
Present cost of centrifugal pump with capacity factor of 122.43 gpm is $
¿2

1500 as of January 1990. (PD&E for ChE, Peters, Timmerhaus, & West 4 th Ed.;

Fig. 14-41, p527)

308
 0.60
lb

( )
122.43 gpm
( 604
2

356 )
Present Purchased Cost of Centrifugal Pump ( 1990 ) =( $ 1,500 ) ¿ =$ 721.
lb
1000 gpm 2
¿

Present Cost of Centrifugal Pump ( 2019 ) =$ 721.79

309
Cost of Insulation:

From PD&E for ChE, Peters, Timmerhaus, & West 5th Edition, Fig. 15-17, p797

For Insulation thickness of 6.33mm for Collection Vessel:

Cost of Insulation per m2 installed=$ 155

2
Heat Transfer Area=3.06 m

0.60
$ 155 0.0063 m 604
Present Cost of Insulation= 2 (3.06 m2)
m (
0.026 m ) ( 390.4 )=$ 1,247.96

For Insulation thickness of 6.34mm for Cooling Condenser:

310
 2
Cost of Insulation per m installed=$ 155

2
Heat Transfer Area=3.06 m

0.60
$ 155 0.0064 m 604
Present Cost of Insulation=
m
2
(3.06 m2)( 0.026 m ) ( 390.4 )=$ 1,259.81

Total Present Cost of F-2:

Total Present Cost of F−2=$ 79,418.07+ $ 721.79+$ 1,247.96+$ 1,259.81

Total Present Cost of F−2=$ 82,647.63

Total Present Cost of F-2 in Philippine Currency:

$ 82,647.63 Php 50.59

Total Present Cost of F−2=(
unit (
)(1 unit )
$ 1.00 )
Total Present Cost of F−2=Php 4,181,143.602

SUMMARY OF FIGURES USED IN SCHEDULE A-2

(SALT OUT CRYSTALLIZER)

311
Equipment Capacity (F-2) 4.07 m3
No. of Units 1
1 USD equivalent to Php Php 50.59
Crystallizer Cost at 1990 for 90 gal $300,000
Present cost of Crystallizer $79,418.07
Purchased Cost of Insulation per m2
$155
installed for Collection Vessel
Present Cost of Insulation for
$1,247.96
Collection Vessel
Purchased Cost of Insulation per m2
$155
installed for Cooling Condenser
Present Cost of Insulation for Cooling
$1,259.81
Condenser
Cost of Centrifugal Pump at 1990 $1500
Present Cost of Centrifugal Pump $721.79
Total Present Cost of F-2 $82,647.63
Total Present Cost of F-2 in Php Php 4,181,143.602

V. SCHEDULE A-3: DECANTER CENTRIFUGE

Equipment: Decanter Centrifuge

Equipment code: K-5

312
Type: Decanter, Centrifuge
Material of Construction: SS316

From Equipment Design:

Feed Capacity: 36.0 m3
No. of Units 1

Cost of Decanter Centrifuge:

From Equipment Design

Design Capacity: 0.04 m3

Solid Liquid = 1

Purchased Cost of Decanter Centrifuge (2002)

Present cost of Decanter Centrifuge with bowl diameter of 0.5m is $55,000 as of

January 2002.

(PD&E for ChE, Peters, Timmerhaus, & West 5th Ed.; Fig. 15-43, p866).

313
 Present Purchased Cost of Decanter Centrifuge

0.6
$ 55,000× [ ] [
0.50
0.32
×
604
390.4]= $ 111,219.73

Total Present Cost of Decanter Centrifuge in Philippine Currency:

$ 111,219.73× [ ₱ 50.59
$1 ]
=₱ 5 , 626 , 606 .12

314
 SUMMARY OF FIGURES USED IN SCHEDULE A-3
(DECANTER CENTRIFUGE)

Equipment Capacity (K-5) 36 m3

No. of Units 1
1 USD equivalent to Php Php 50.59
Purchased cost of Decanter centrifuge
$55,000
based on bowl diameter (2002)
Total Present cost of Decanter
$111,219.73
centrifuge
Total Present Cost of F-2 in Php Php 5,626,606.14

315
 VI. Schedule A-4

Equipment: Freeze-drier
Equipment code: T-2
Type: Vacuum, Freeze-drier
Material of Construction: AIS SS316L
From Equipment Design:

Capacity: 1.295 m3
No. of Units 1

Cost of Dryer:

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 15-32, P.847.

Cost of dryer2002 (based on total shelf area) = $ 100,700

Present cost of dryer2019 (based on total shelf area) =

604
$ 100,700 ( 309.4 )=$ 196,583.06
Present cost in Philippine currency:

$ 196,583.06 ( 1 unit ) ( Php1 USD

50.59
)=Php 9,945,137.01

316
Cost of Compressor:

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 12-28, P.531

For a power requirement of 100kW

Cost2002= $ 100,000

Computing for the cost of the compressor with a power requirement of 118.33kW

using Sixth tenth rule:

0.6
118.33
Cost2002= $ 100,000 (
100 ) =$ 110,625.93

Computing for the present cost:

604
Cost2019= $ 110,625.93 ( 390.4 )=$ 171,152.82
Present cost in Philippine currency:

$ 171,152.82 ( 1unit ) ( Php1 USD

50.59
)=Php 8,658,621.16
Cost of Heat Exchanger (Condenser):

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 14-16, P.681

For a heating area of 90 m2:

Cost2002= $ 10,000

317
Computing for the cost of the shell and tube heat exchanger with a heating area

of 1.97m2 using sixth tenth rule:

1.97
90
Cost2002= ¿
¿
$ 10,000¿

Computing for the present cost:

604
Cost2019= $ 1009.56 ( 390.4 )=$ 1561.93
Present cost in Philippine currency:

50.59 Php
¿
¿
$ 1561.93 ( 1 unit ) ¿

Cost of Heat Exchanger (Evaporator):

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 14-16, P.681

For a heating area of 90 m2:

Cost2002= $ 10,000

Computing for the cost of the shell and tube heat exchanger with a heating area

of 1.97m2 using sixth tenth rule:

318
 0.664
90
Cost2002= ¿
¿
$ 10,000¿

Computing for the present cost:

604
Cost2019= $ 525.72 ( 390.4 )=$ 813.36
Present cost in Philippine currency:

50.59 Php
¿
¿
$ 813.36 ( 1unit ) ¿

Cost of Insulation:

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 15-17, P.797

For an insulation thickness of 52mm:

$ 102
Cost2002=
m2

For 52.71m2 of insulation:

$ 102
Cost2002= 2
( 52.71 m2 )=$ 5886.78
m

Computing for the present cost of the insulation:

604
Cost2019= $ 5886.78 ( 390.4 )=$ 9107.62
319
Present cost in Philippine currency:

$ 9107.62 ( 1 unit ) ( 50.59 Php

! USD )
=460,754.53 Php

Total Present Cost of Freeze-Drier:

Php8,658,621.16+ 79,018.04 Php+ 41,147.85 Php+ 460,754.53 Php

= Php 9,239,541.58

Cost of Freeze-Drier:

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 15-32, P.847.

Purchased Cost of Dryer (2002) = $100,700

320
Cost of Reciprocating Compressor:

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 12-28, P.531

321
Purchased cost of Reciprocating compressor2002 with a power requirement of

100kW = $100,000

Cost of Shell and Tube Heat Exchanger:

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 14-16, P.681

322
Purchased Cost of Shell and Tube Heat Exchanger 2002 with a heating area of 90 m 2

= $10,000

Cost of Shell and Tube Heat Exchanger:

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 14-16, P.681

323
Purchased Cost of Shell and Tube Heat exchanger 2002 with a heating area of 90 m2

= $10,000

Cost of Insulation:

From Plant Design and Economics for Chemical Engineers by Peter and

Timmerhaus 5th edition, Figure 15-17, P.797

324
Purchased Cost of Insulation (2002) with a thickness of 52mm = $102/m2

SUMMARY OF FIGURES USED IN SCHEDULE A-4

(FREEZE DRIER)

Equipment Capacity (F-2) 1.295 m3

No. of Units 1
1 USD equivalent to Php Php 50.59
Drier Cost at 2002 based on shelf area $100,700

325
Present cost of drier $196,583.06
Purchased Cost at 2002 of compressor with a
$110,625.93
power requirement of 118.33kW
Present Cost of compressor with a power
$171,152.82
requirement of 118.33kW
Purchased Cost at 2002 of shell and tube heat
$1009.56
exchanger (condenser)
Present Cost of shell and tube heat exchanger
$1561.93
(condenser)
Purchased cost at 2002 of shell and tube heat
$525.72
exchanger (evaporator)
Present Cost of shell and tube heat exchanger
$813.36
(evaporator)
Purchased cost at 2002 of insulation $5886.78
Present cost of insulation $9107.62
Total Present Cost of F-2 $379,218.79
Total Present Cost of F-2 in Php Php 19,184,678.59

326