Presentation of the project for reconstruction of caprolactam production unit А. Project Opportunity Description
А1. Project name
(а) Short name: Reconstruction of caprolactam production unit (b) Full name: Reconstruction of caprolactam production unit at joint stock company “Grodno Azot”, Republic of Belarus.
(с) Summary: The goal of the project is implementation of the first stage of reconstruction at caprolactam plant including construction of cyclohexane oxidation unit with annual capacity of 80 ths tonnes. The new oxidation unit is designed with the use of modern cost-effective technology that allows enhancement of JSC “Grodno Azot” export sales, maintenance and extension of company’s market share. А2. Progress status
Construction stage. Capital spending sights – 40,7 mln USD. Carried out capital investment – 20,7 mln USD. The company has bought 50% of required equipment and materials and completed about 40% of construction and erection work at the site. The unit is scheduled for start-up in 2005. There is a need for an investor. А3. Organizations involved and their roles (а) JSC “Grodno Azot” pr. Kosmonavtov, 100; Grodno 230013; Rebublic of Belarus Mr. Langov, General Director Phone number: (+375152) 444 210 Fax: (+37517) 210 80 55 А4. Project description There are two on-stream units at operating caprolactam plant with total annual capacity of 111,2 ths tonnes. Caprolactam produced by the plant is an important strategic product used in manufacturing of a variety of industrial products such as polyamide man-made fibers and yarns as well as plastics. As a part of the project “Grodno Azot” is carrying out construction of the new cyclohexane oxidation unit with annual capacity of 80 ths tonnes of anol-anol mix. With putting this unit in operation, two units with annual capacity of 30 ths tonnes each, that were started in 1970, will be removed from service. Commissioning of the new unit allows to diminish the cost of output at the expense of raw material and energy saving. It will also support improvement of process safety and environmental standards. With introduction of modern cost-effective technology, direct costs are estimated to be cut by 13-14%. Introduced equipment and technology employ high-temperature oxidation scheme including the following stages: Cyclohexane oxidation in the same reactor which is used for catalytic decomposition of hydroperoxide; Two-stage cyclohexane distillation; Reuse of waste-gas energy from oxidation units; Catalytic gas cleaning from carbon dioxide; Project cost is 20 mln USD.
А5. Background/history/ overall program/related or similar projects
JSC “Grodno Azot” was set in operation in 1963. Before the year 2002 the plant was a state company. Republic of Belarus holds 100% in the statutory fund of JSC “Grodno Azot”. Presently the joint stock company belongs to the Belarusian State Oil &Chemistry Concern. The major activity of the company is production of chemical fertilizers. The plant produces the following kinds of nitric fertilizers: urea, UAN solution, ammonium sulfate, ammonia water. In addition, the plant produces ammonia, weak nitric acid, sulphuric acid, caprolactam, and methanol. High quality of JSC “Grodno Azot” products is confirmed by certificates ISO 9002:1994. Certified quality system is applied to caprolactam production as well. At the present time JSC “Grodno Azot” is working on transition to the standard ISO 9001:2000 in the year 2002. Company production capacity amounts to 900 ths tonnes/year for ammonia, 305 ths tonnes/year for sulphuric acid, 645.7 ths tonnes/year for nitric fertilizers, 111.2 ths tonnes/year for caprolactam, and 55.4 ths tonnes/year for methanol-rectificate. А6. Environmental impact summary Introduction of modern technologies, substantial capital investment into the systems of gas purification, and advent of process control computer system allows to significantly decrease pollutant emissions and minimize emergency probability.
А7. Possible obstacles/problems/risk assessment
The risk level for the project implementation is not high. JSC “Grodno Azot” has a monopoly for caprolactam production in Republic of Belarus. In Belarus its main customer is JSC “Grodno Khimvolokno”, consuming about 30% of caprolactam produced.
А8. Time period for project implementation and pay-back period (years)
Year of putting into operation - 2005. Payback period - 4.6 years after start-up.
А9. Project's branch
Chemical industry В. Capital Cost Items (investment requirements for project) В1. Project physical components Design work, and other pre-investment costs Purchase of equipment and materials (including VAT and custom duties) Construction and erection work TOTAL С. Capital Resources Available С1. Recourses, grants, investments, equity/ownership, etc., tentatively or firmly arranged Capital base D. Required Financial Assistance
D1. Financing gaps, type of financial assistance required, rationale, name/basis for choice of financial sources and instruments
В2. Capital cost, ,000 USD 600 15 000 4 400 20 000
С2. Amount, , 000 USD 20 700
Direct investment
D2. Sources of finance Extra financing in addition to C1: Financing is required for equipment procurement, reimbursement of project design and specification cost, recovering the cost of construction and erection work (prospective investors are invited for co-operation; the address is given in box A3) TOTAL:
D3. Type of instrument Direct investment
D4. Amount, ,000 USD 20 000
20 000
Е. Demand (users) and revenues
Е1. Buyers, markets, revenues, prices, etc.
Caprolactam produced by the plant is an important strategic product used in manufacturing of a variety of industrial products such as polyamide man-made fibers and yarns as well as plastics. Target markets for the product are domestic enterprises, EU countries, the countries of SouthEast Asia and others.
Е2. Revenue (income)
Е3. Amount, ,000 USD
Тhe outputs of the unit are used as intermediates for manufacturing of the whole spectrum of enterprise products. F. Operation and Transaction Costs
F1. Cost components, strategies for cost recovery, etc.
The plant has at its disposal all the necessary engineering services and energy resources for production placement. There is no need for additional land space and extra workforce. Taking into account the long term of the existing cyclohexane oxidation unit operation, lack of opportunities to bring main process equipment in compliance with the requirements of current “Safety Standards and Rules” of the Republic of Belarus to the units of Class I by fire and explosion hazard, the construction of the unit allows to reach new level of process safety, improve environmental conditions in the region, reduce direct costs by 13-14% and maintain export sales of the company. H. Project Information Source Н1. The form is completed by: Ivanov V.I., Deputy Chief Engineer on Reconstruction Н2. Organization: JSC “Grodno Azot”, 100 Pr. Kosmonavtov, Grodno, Republic of Belarus Н3. Tel.\Fax\E-mail: Tel: (0152) 794619
Fax: (017) 2108596
E-mail: recon@azot.com.by
Н4. Date: 18.11.2002 Н5. Supreme organization: Belarussian State Concern “Belnephtechim”