Business India, December 28-January 10, 1999
More from less
Debottlenecking has become a mantra to help chemical companies stay a float during hard times
For years, M.M. Sharma, FRS, the doyen of Indian chemical engineers, used tacky slogans in every chemical industry meet to propagate the importance of clever R&D for healthy bottom lines. "More from less!", "Convert liabilities into assets!", "Knowledge engineering!" were some of them. The response was mixed. Protected markets and lack of serious domestic competition due to licensing were hardly the ideal conditions to breed lean and mean companies. However, the current hard times have more than convinced many businessmen of the wisdom of these words. In smart companies, these slogans have led the effort in intensive debottleneckrng, leading to tangible benefits. The list of 'smart' companies is long. It includes giants like Reliance, IPCL, the psu oil refineries engaged in commodity chemical business as well as midsize players like Arti Organics, Herdillia Chemicals, Excel, Bombay Oil, Hindustan Organic Chemicals, Atul and Alkyl Amines who have a mixed portfolio of commodity and specialty chemicals or purely specialty chemical players in the pharmaceutical industry like Ranbaxy.
It is not that the tongue twister, "debottlenecking" is new to the chemical industry. In fact, under the licence raj many companies used to report that they debottlenecked and increased the capacity at an incremental cost, as soon as the government increased their licensed capacity. This made their claims largely suspect. It was assumed that the declared capacity was understated in the first place. With liberalisation, there is no incentive to understate capacity. Now, chemical imports are pushing the price level down, export markets are under great pressure, most greenfield projects are being shelved, profit margins are thin and any incremental innovation is welcomed. Thus, debottlenecking is turning into a fine art.
The word "debottlenecking", though it does not occur in any dictionary, means removing the bottlenecks in a process. The exercise consists of identifying the bottlenecks and then removing them one by one. There are many levels at which the process works. The more pedestrian level is of making a physical analysis of the equipment in the plant like pumps, compressors and distillation columns. This can lead to clues to increasing the capacity of particular compressors, pumps, etc, leading to higher throughput. This can be called level one debottlenecking. Due to overdesign by plant designers (as they have to give guaranteed performance in terms of throughput, quality, etc) there is always scope to increase the plant rough put by 25 per cent with hardly ny additional investment. A more thor ugh analysis and some marginal investment can readily yield 50-60 per cent increase. For example, Reliance is currently manufacturing about 250,000 tonnes of PT A from a 180,000-tpa plant at Patalganga near Mumbai. There are reasons to believe that soon it may go up to even 300,000 tonnes. The lessons learnt here are being readily applied in the larger plants at Hazira, where two 350,000-tonne PTA plants are being fine-tuned to yield 500,000 tonnes each. Some RIL engineers believe that this can be further increased to 600,000 tonnes each. In fact, ICI plants in Wilton, UK were debottlenecked after learning from the experience at Reliance.
The second level consists of improving the design of equipment like columns, heat exchangers and reactors. -Por example, using appropriate packing in a distillation column, changing the contact surface, etc, can change the throughput. Similarly, studying impeller design in the reactor, or in plain English, "stirring the brew properly" can increase reaction rates. "The first thing is to find out what are the factors limiting the reaction rate in a plant," says Prof. J.B. Joshi of the University Department of Chemical Technology (UDCT), Mumbai, one of the busiest industry consultants. Without mentioning names of companies, for confidentiality reasons, Joshi reels out example after example, of benefits from applying scientific methods to debottlenecking. In fact, he derives great intellectual satisfaction from these exercises. As a result of his extensive research into reactor design, using hitech tools like laser dopplerimetry, and vast consulting experience, he teaches a course on multiphase reactor design at UDCT, only one of its kind in world.
"One needs to do just about 40-50 laboratory experiments in a small one- litre capacity reactor to understand the process," Joshi claims. He has developed new methods involving Gamma Ray Tomography to study running plants without disturbing them. The results have been so fantastic that he is one of the most sought after consultants by even international giants like ICI. For example, his work has improved the process developed by the Indian Institute of Petroleum, Dehradun, for cracking heavy petroleum residue in a refinery (vis breaking) to get more diesel and kerosene.The non-invasive Gamma Ray Tomography technique is being applied to "vis breaking" at the IOC refinery, near Baroda, which can yield a 10 per cent increase in the middle distillates (diesel, kerosene, naphtha). In plants of millions of tonnes of capacity, this can be a substantial gain. In fact, this is an example of advanced debottlenecking where quality and composition of the products can be changed without any significant addition of equipment. The end is achieved purely through better reactor and process design. Another striking example of this is the way Reliance has understood the PVC process. The result: a PVC plant designed to produce 180,000 tpa is today producing nearly 300,000 tpa, thereby amazing even the licensors - Geon. Reliance consistently beats financial analysts’ projections by seating it plants, turning into reality Sharma's catch phrase, "more from less".
Joshi points out such work can give " better quality products with lower impurity profile, higher selectivity and lesser load on the environment Contrary to common perception, both Joshi and Sharma emphasise the fact that debottlenecking is not just for large commodity chemical companies but will yield even higher returns for specialty chemical companies. Joshi cites the case of a company which was making a specialty chemical with a market price of about Rs200 a kg. The detailed analysis of the process led to a 20 per cent increase in the yield almost increasing the profit margin by Rs40 a kg. This is a win-win exercise. Not only does the company benefit through better margins but the quantum of effluents, as in the case of dyes and pharma companies, can also be greatly reduced through better conversion. "In many cases a 100 per cent material balance can be established," claims Joshi. Practically nothing will be wasted. This is what Sharma calls "converting liabilities into assets".
Rajeev Pandia, managing director, Herdillia Chemicals, who applied some of Sharma's recipes, concurs: "Some of the waste products which we were burning were converted into fumaric acid, and there were even times when the price of fumaric acid in the market was higher than that of the primary product, pthalic anhydride," he adds.
The next level of debottlenecking is termed knowledge engineering by Sharma. This might involve development of new and better catalysts with higher selectivity, etc. At times the developments have already occurred elsewhere in the world and one needs to understand them and change the catalysts.
"All these steps require a certain willingness on the part of the management to take risks," says Joshi and this he claims to have found in plenty in mid-sized companies with Rs100-500 crore turnover. The returns to companies too have been handsome.
"There are other side benefits of this debottlenecking exercise", claims Pandia. "The multidisciplinary engineering team from technical services, R&D, operations, etc, which gets involved, gets so charged by this process, that it has very good HRD benefits," he adds. A senior Grasim executive confirms this. He claims that debottlenecking is a highly creative process and he greatly enjoyed it when he was a plant R&D engineer.
When the exports are under severe pressure and there is heavy competition from crisis-hit Asian countries, one way to ensure you don't lose your markets is to supply products of premium quality consistently. Debottlenecking helps in achieving this, claims Joshi, and cites the success in exports of Arti Organics, Alkyl Amines, Herdillia Chemicals and so on.
Observers of East Asia claim that many companies there are becoming leaner and meaner during the present crisis and might come out with even more vigour internationally at the end of the crisis. Complacent Indian companies who take shelter in the fact that the crisis in India is not so severe might thus be jolted out of their wits in a couple of years. However, the industrial downturn has definitely made some Indian companies smarter and more productive. Realising its importance, the Indian Chemical Manufacturers Association is planning a workshop on debottlenecking for the benefit of its members. The unpronounceable word is obviously yielding pronounced results.