CHAPTER II
ECONOMY ISSUES
2 .1
INTRODUCTION
Ethylene oxide (EO) is a raw material used in manufacture of chemical derivatives for major major consum consumer er goods. goods. It mainly mainly used used to produc producee ethylen ethylenee glycol glycol which which is prepre product for polyesters. EO is used directly in the gaseous form for m to produce sterilizing s terilizing agent fumigant and many others application. !ue to the commercial success of the direct oxidation process the mar"et trend toward larger single-train plant #ecomes phenomenal growth of production production capacity of ethylene oxide in the world. 2.2 2.2
ETHY ETHYL LENE OX OXID IDE E MA MARK RKE ET ANA NAL LYSIS SIS
$ccording %&I 'onsulting %$ (orth $merica) is the country that produced * million tons of ethylene oxide which is over one fifth of all glo#al production and the highest production in +,,* followed #y enezuela (+ million tons) %audi $ra#ia (./ millio million n tons) tons) and 'hina 'hina (.* (.* millio million n tons). tons). 0ecaus 0ecausee of direct direct oxidat oxidation ion process process #ecome successful due to higher yields and less downtime the glo#al production increases from / million metric tons in +,,1 to 2 million metric tons in +,,/ and +,,2 (%&I 'onsulting +,,2). 3he mar"et of ethylene oxide is #eing driven #y strong demand especially in polyester fi#res and 4E3 resin which are largely used in the textile food and #everage industries. 3he glo#al mar"et in terms of revenue in +, was estimated worth %! +2,2. million and and expected to #e increasing until %! *+56+. *+56+. million in +,/ growing at a '$7& of 8.1 9 from +,* to +,/. +,/. $sia $sia 4acific dominates the ethylene oxide mar"et accounting for over 569 of total demand in +, (3ransparency (3ransparency :ar"et
&esearch +,+). ;ith the crude oil prices moving upwards the price trend are expected to reflect in the ethylene prices which is an important material for ethylene oxide. 3he uptrend in ethylene oxide prices is li"ely to prompt the producers to increase the prices (:ar"etsandmar"ets +,,). 5%
5%
11% Other Countries 44%
China USA
17%
Saudi Arabia South Korea Canada 18%
7lo#al demand for ethylene oxide is forecast to grow at a rate of 89 per year from +,,2 to +,* and around 69 per year from +,* to +,2 (%&I 'onsulting +,,). % :ar"it +,5). In $sia 'hina is the largest producer of ethylene oxide. 'hina?s ethylene oxide mar"et will remain relatively domestic the supply and demand are currently and expected to #e highly dominated and satisfied #y domestic producers and users ( %$I &eport +,,). In :alaysia company of Optimal 7lycols (:) %dn. 0hd. a joint venture #etween 3he !ow 'hemical 'ompany of % and 4E3&O$% has annual production capacity of 6/8,,, million tons of ethylene oxide (EO) and 658,,, million tons of ethylene glycols in @erteh 3erengganu. $nother plant 4&4' 7lycols %dn. 0hd. in 4engerang Aohor has capacity of *,,,,, million tons per year (4E3&O$%
+,5). :alaysia has so far #een relatively unaffected #y the general crisis in East $sia (I'I% +,6). 3otal import of ethylene oxide in :alaysia was ,.819 from 6, million tonnes of glo#al production in +,5. %ince the proposed plant #uilt is una#le to fulfill completely the increasing demand of ethylene oxide in worldwide thus the production rate of the proposed plant #uilt is estimated to cover ,.19 of ethylene oxide?s import in :alaysia. 3he annual growth import rate of ethylene oxide in :alaysia is forecast to grow at a rate /.29 in 8 years from +,1 to +,++. 3he production of ethylene oxide for our plant would #e 8, "iloton per year. 237600 226800 204000 171000
250,000 200,000 150,000 Thousand tonnes
113400
100,000 50,000
563724565
0 2008 2012 2016 2020 2006 2010 2014 2018 2022 Year
2.3
GLOBAL EXPORTS AND IMPORTS BY COUNTRY
Oxirane (ethylene oxide) are the +8/*th most traded product and the 6+st most complex product according to the 4roduct 'omplexity Index (4'I). :alaysia contri#ute ,.**29 from the glo#al exporters and ,.819 from glo#al importers of ethylene oxide in +,5. 3he glo#al top exporters of Oxirane (ethylene oxide) are 7ermany (*,9) the etherlands (+,9) 0elgium-Buxem#ourg (9)
India. :alaysia has #een imported the ethylene oxide from 0elgium Buxem#ourg Aapan India and %ingapore. 3he highest percentage of import is from 0elgium Buxem that is +29 followed #y Aapan with around +69 and +,9 in India.(OE'+,*)
2.4
CONCLUSION
3he annual production of our plant would #e 8, "ilotons per year. %ince the total import of ethylene oxide in :alaysia was ,.819 from 6, million tonnes of glo#al production in +,5. 3hus the production rate of the proposed plant is estimated to cover ,.19 of ethylene oxide?s import in :alaysia. Our plant operates for +* hours in 68, days annually. %o the #asis production rate of our plant is 828+"gChr.