Page 239 - Plant design and economics for chemical engineers

TABLE 26
Estimation of capital investment cost (showing individual components)
The percentages indicated in the following summary of the various costs constituting the capital
investment are approximations applicable to ordinary chemical processing plants. It should be
realized that the values given can vary depending on many factors, such as plant location, type
of process, complexity of instrumentation, etc.
I. Direct costs = mate&l and labor involved in actual installation of complete facility
(70-85% of fixed-capital investment)
A. Equipment + installation + instrumentation + piping + electrical + insulation + painting
(5060% of fured-capital investment)
1, Purchased equipment (15-4096 of fixed-capital investment)
2. Installation, including insulation and painting (25-551 of purchasedequipment cost)
3. Instrumentation and controls, installed (6-30% of purchasedequipment cost)
4. Piping, installed (lO-80% of purchased-equipment cost)
5. Electrical, installed (lO-40% of purcbasedequipment cost)
B. Buildings, process and auxiliary (lo-70% of purchasedequipment cost)
C. Service facilities and yard improvements (40-10096 of purchasedequipment cost)
D. Land (I-2% of fixed-capital investment or 4-8% of purchased-equipment cost)
Il. Indict costs = expenses which are not directly involved with material and labor of actual
installation of complete facility (15-3096 of fured-capitaf investment)
A. Engineering and supervision (5-302 of direct costs)
B. Construction expense and contractor’s fee (6-30% of direct costs)
C. Contingency (5-151 of fixed-capital investment)
Ill. Fixed-capital investment = direct costs + indirect costs
IV. Working capital (lO-20% of total capital investment)
V . Total capitaf investment = fixed-capital investment + working capital

TABLE 27
Estimation of total product cost (showing individual components)
The percentages indicated in the following summary of the various costs involved in the complete
operation of manufacturing plants are approximations applicable to ordinary chemical processing
plants. It should be realized that the values given can vary depending on many factors, such as
plant location, type of process, and company policies.
Percentages are expressed on an annual basis.

I. Manufacturing cost = direct production costs + fmed charges + plant overhead costs
A. Direct production costs (about 60% of total product cost)
1. Raw materials (lO-50% of total product cost)
2. Operating labor (10-204 of total product cost)
3. Direct supervisory and clerical labor (lO-25% of operating labor)
4. Utilities (10-20% of total product cost)
5. Maintenance and repairs (2-10% of fuued-capital investment)
6. Operating supplies (lO-20% of cost for maintenance and repairs, or 0.5-1% of fued-
capital investment)
7. Laboratory charges (IO-20% of operating labor)
8. Patents and royalties (0-6% of total product cost)
B. Fixed charges (l O-20% of total product cost)
1. Depreciation (depends on life period, salvage value, and method of calculation-about
10% of fued-capital investment for machinery and equipment and 2-396 of building
value for buildings)
2. Local taxes (1-496 of fixed-capital investment)
3. Insurance (0.4-1% of furedcapital investment)
4. Rent (8-12% of value of rented land and buildings)

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