Project Management in the Chemical Industry.

The geographical location of the chemical plant contributes a lot to the success of any chemical business venture . Utmost care and thorough study is required for selecting the chemical plant site, and many different factors must be considered while selecting the site for the plant and this is generally considered at the DFR stage (Design Feasibility Stage.)
The Chemical plant site should be ideally located where the cost of producing the chemicals and their distribution can be at a minimum level .Also there has to be a good scope for plant capacity expansion, availability of raw material, cheap and easily availability of man-power and a conducive environment and if not available shall be developed like schools, dispensary, township facility, connectivity with Class A & B cities, etc which attracts the good technocrats. The major factors that contribute in the selection of chemical plant sites are

1. Raw materials availability
2. Energy availability
3. Meteorological data
4. Market study
5. Transportation facilities
6. Water supply
7. Waste disposal
8. Availability of Man power
9. Taxation and legal restrictions
10. Site characteristics
11. Safety and Environmental measures
12. Community factors

All these factors are generally covered in the pre-feasibility design report which is also known as Design Feasibility Report “DFR”. On the basis of these factors, acceptable locations can usually be reduced to one or two general geographical regions.

In the second step, the effects of transportation facilities, water and power supply are taken into account.

As a third step, a detailed analysis of all the options are made considering ease of business and various factors as mentioned above and other factors can be add-on like political stability in the region etc. Final recommendation can be justified based on the above factors.

Let us discuss the above factors one by one.
1. Raw materials availability:
The sourcing of raw materials for the plant is one of the most important factors influencing the selection of a chemical plant site. This becomes more sensible if a large number of raw materials are to be utilized in the plant, as it reduces considerable cost during transportation and storage charges. More Emphasis should be laid on the procured price of the raw materials, distance from the source of the supply, mode of transportation and related expenses, availability and reliability of supply.

2. Energy availability:
Consumption of Power and steam are generally very high in most of the chemical plants as they run 24 hours, and fuel is required to run the offsite utilities. The availability of Power and fuel can be considered as one of the major factors in the selection of a plant site. If the chemical plant requires large quantities of coal or oil, location near a source of fuel supply or connectivity of the site with the nearest railway line may be essential for economic operation. The cost of power supply by the state government can help determine whether power should be purchased or self-generated. This factor is generally highlighted in the DFR (Design feasibility Report). For small batch plants, coal for steam generation and fuel for DG Set can be transported through trucks.

3. Meteorological data:
If the plant is located in a very cold climate, costs may be increased by providing steam/electrical tracing arrangement for pipelines to avoid freezing of material inside pipelines and will not be energy efficient, while special cooling towers or air-conditioning equipment may be required if the prevailing temperatures are very high. Extreme temperature conditions can have serious effect on the economic operation of the plant, and these factors should be examined carefully when selecting a site. In such drastic conditions man-power will also not be available easily.

4. Market study: The location of product consumers or distribution centers affects the cost of product distribution and the time required for shipping. Proximity to the major consumer is one of an important consideration in the selection of a plant site, because the buyer usually finds it advantageous to purchase from nearby sources as they can maintain effective inventories, less freight charge to be paid, tracking of material becomes easy, etc It should be noted that markets are needed for by-products as well as for major final products.

5. Transportation facilities:
Waterways, railroads, and highways are common means of transportation. The quantity and quality of products and raw materials determine the most suitable type of transportation. If would be of great advantage, if the plant site should have access to all three types of transportation and, certainly, at least two types should be available. There is usually a need for convenient air and rail/road transportation facilities between the plant site and the company headquarters. The proper connectivity helps in arranging site visits for the contractors/vendors, in case any major break-down happens with the equipment and also helpful in arranging site-visit for the client. Nowadays generally client visits the site and do the safety audit of the chemical plants before buying the product to ensure plant sustainability.

6. Water supply:
The chemical industries use large quantities of water for cooling towers, equipment cleaning, steam generation, and as a raw material in the process. Hence, the plant must be located where a dependable supply of water is available in large quantities. A nearby large river or lake is preferable, although deep wells or artesian wells may be satisfactory if the amount of water required is not too great. The water table at plant site can be checked by consulting the state geological survey, and information on the constancy of the water table and the year-round capacity of local rivers or lakes should be obtained. If the state water supply shows seasonal fluctuations, it would be recommended to construct a water reservoir or to drill several standby bore-wells. The quality and cost of supply and purification of water must also be considered when choosing the water supply. It has been seen that petroleum industries which are nearer to the sea employed seawater treatment system to run the industry, in that case, land requirement and purification process consumes a large amount of project cost. A balance of all factors is to be taken into consideration while choosing a site.

7. Waste disposal:
In recent years, many strict legal restrictions have been placed on the methods for disposing of waste materials from the chemical industries by the government for protecting the environment. The site selected for setting up a chemical plant should have adequate capacity and facilities for correct waste disposal like Incinerator, Effluent treatment plant, Scrubbing system, etc.

8. Availability of Man power:
The availability of the labor in the vicinity of a proposed plant site must be examined as man-power is one of the biggest asset of any organization, hence consideration shall be made while selecting the site where technical and non-technical staff shall be available. Now a days companies are providing townships, free children education, medical benefits etc to attract the best brains and to avoid attrition rate.

9. Taxation and legal restrictions:
Nowadays companies are selecting those sites where state government provide better facilities for ease of business e.g Gujarat, Haryana etc

10. Site characteristics:
The characteristics of soil/land of a proposed chemical plant site should be examined carefully. Generally, the client/consultant hire companies who do soil investigation, the topography of the land and the soil structure must be considered, since either or both may have a pronounced effect on construction costs. The cost and size of the land is also very important factor along with living conditions. The availability of extra land for future plant expansion or any expansion like the building of a colony for employees within the premises should be taken into account while doing the site selection.

11. Safety and Environmental measures:
Many Chemical plants are located along the rivers or near large bodies of water, and there are risks of flood or hurricane damage. Before selecting a plant site, the regional history of natural disasters of this type should be examined and the consequences of such occurrences should be considered. Protection of Man and machine from losses by fire is another important factor for selecting a plant location. In case of a major fire break-out, assistance from the fire departments should be available and availability of medical facilities should also be considered.

12. Community factors:
The nature and extent of facilities of a community can have an effect on the location of the plant. If a minimum number of facilities for the satisfactory living of plant personnel do not exist, then the attrition rate would be very high, and this causes one of the major challenges for the industry to survive. Facilities such as transportation, hospitals, shopping hub, libraries, schools, civic theatres, etc should be made available to the community as the plant personnel is going to live with their families.