Analysis of Cost Benefit in n- butanol Production Processes

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By: Shobanna Jeevanand --

03 August, 2012

Analysis of Cost Benefit in n- butanol Production Processes
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N-butanol production process plays a significant role in the production cost of the solvent. The n-butanol is synthesized from both direct syntheses from propylene and from n-butyraldehyde. Comparing two different processes across different regions such as US, Europe and China in terms of production cost which involves raw material cost, process cost, labor cost and fixed cost, shows the cost benefit for the buyer. Due to the raw material cost contribution of around 70% - 75% (n-butanol from direct synthesis) and 50% - 66% (n-butanol from butyraldehyde) of the final production cost of n-butanol, fluctuation in the price of propylene has a linear impact in the production cost of n-butanol. Direct synthesis of n-butanol through propylene incurs lower production cost as part of the cost is allocated to the by-product iso-butanol. N-butanol is used widely in the manufacturing of solvents such as butyl acetate, methacrylate, glycol ethers, n-butyl acetate, and n-butyl amines. The n-butanol can be produced through two different sources; they are propylene and n-butyraldehyde. And the industry is projected to grow at a CAGR of around 11% during 2011 - 2015. Inspite of that the n-butanol demand is increasing and global production of n ï¾Ãƒâ€šÃ‚Æ’?? butanol does not meet the demand of the market especially in the Asia Pacific region. Prices of propylene which is the major raw material of n-butanol is also increasing, having said this, currently the focus of the buyers is to reduce cost through negotiation with suppliers.




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