FACULTY OF CHEMICAL ENGINEERING

EH220: BACHELOR IN CHEMICAL ENGINEERING

CPE520: PROJECT MANAGEMENT
EH2204G
DR RUSMI BINTI ALIAS
BIO-D SDN BHD
MINI PROJECT
BIODIESEL PRODUCTION

MEMBERS:
MOHAMAD WISHAL KURNIA BIN AZMY (2018437792)
MUHAMMAD AIMAN BIN ALI RAHMAN (2018227476)
MUHAMMAD IQMAL HANIF BIN MOHAMAD AFANDI (2018287548)
MUHAMMAD SYAHMI BIN SUMAIRI (2018299938)
MUHAMMAD SHAMMIL ASHMAN BIN MOHD SAUPI (2018441592)

DATE SUBMITTED: 10TH JUNE 2019

 PROJECT CHARTER

Project Overview of a Biodiesel Production

This project is conducted to develop a new and profitable biodiesel production chemical plant.
This initiative is supported by the government as a medium to increase palm oil demands to the
global market.
Project Approach
This project are beneficial to all parties, including the government, people and the environment
as well. Bio-D SDN BHD are committed to yield the best quality of biodiesel and enhance its
application towards engineering approach by investing in research department in the future. In
order to achieve the desired target, staffs and managers are entrusted to create a stable and
controlled performance of the factory. The commitment and dedication from all departments will
ensures our bright future as the leading biodiesel provider in the market.
Project Objectives
 Produce a high purity of biodiesel which meets the client’s requirements
 Produce a profitable by-product, glycerine
 Provide a platform to increase people’s acceptance on the usage of bio-oil.
Major Deliverables
 Machinery involved in the process
 Estimation of profit in the long run
 Project final report
Constraints
The project requires thorough separation columns to yield a better conversion of biodiesel.
Risk and Feasibility

Market Process Technology

Biodiesel market is growing The production of In the batch reactor, the reactants are
rapidly and the demand for biodiesel is from the charged into the reactor at the
biodiesel is becoming higher. vegetable oils. determined amount. The reactor is then
closed and taken to the desired reaction
conditions (temperature, pressure, and
stir rates).
The market value of biodiesel Transesterification For PFRs, the reactants are fed into one
increasing. process will convert side of the reactor. The chemical
free fatty acid into composition changes as the material
biodiesel moves in plug flow through the reactor.

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 Table of Contents

1.0 Introduction………………………………………………………………………. 5
1.1 Company overview……………………………………………………….... 5
1.2 Organizational chart………………………………………………………... 6
1.3 Schedule of task and responsibilities………………………………………. 7
1.4 Business location…………………………………………………………… 12
1.5 Factors influencing choice of location……………………………………... 13
1.6 Company objectives………………………………………………………... 18
1.7 Vision………………………………………………………………………. 18
1.8 Mission……………………………………………………………………... 18
2.0 Selection of Product and Site Selection…………………………………………... 19
2.1 Product selection…………………………………………………………… 19
2.2 Site selection……………………………………………………………….. 23
2.3 Map view of the location………………………………………………….... 26
2.4 Net Profit Value (NPV)…………………………………………………….. 27
3.0 Feasibility Study of Market, Process and Technology…………………………… 28
3.1 Overview feasibility………………………………………………………... 28
3.2 Introduction to biodiesel process flow……………………………………... 30
3.3 Process flow………………………………………………………………... 32
3.4 Process Flow Diagram (PFD)……………………………………………… 34
4.0 Mind Mapping and Work Breakdown Structure…………………………………. 35
4.1 Mind map…………………………………………………………………... 35
4.2 Work Breakdown Structure (WBS)………………………………………... 36
5.0 Project Scheduling………………………………………………………………... 37
5.1 AOA diagram………………………………………………………………. 37
5.2 AON diagram………………………………………………………………. 39
5.3 Gantt chart………………………………………………………………….. 41
6.0 Project Budgeting and Costing…………………………………………………… 42
6.1 Raw Materials……………………………………………………………… 42
6.2 Machinery…………………………………………………………………... 42

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 6.3 Manpower budgeting………………………………………………………. 43
6.4 Land cost…………………………………………………………………… 43
6.5 Initial investment…………………………………………………………... 43
7.0 Evaluating and Terminating Project……………………………………………… 44
7.1 Evaluating and Terminating Project……………………………………….. 44
7.2 Termination Process……………………………………………………….. 47
7.3 Project Final Report………………………………………………………... 47
8.0 Conclusion……………………………………………………………………….. 48
9.0 Recommendation…………………………………………………………………. 49

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 1.0 INTRODUCTION

1.1 Company Overview

BIO-D SDN BHD is the selected of a few trusted by the government of Malaysia to produce a
high purity and yield of biodiesel product for the distribution to the local and international
subsidiaries. We are the leading company to provide a high quality of biodiesel for further
process of other chemical industries throughout the years. With complete and advanced
chemical process equipments, we convinced that our production can achieve maximum
capacity and gives better results as a whole.

BIO-D SDN BHD was established on 1999 where the chemical plant only operated on a small
scale and provided small volume of biodiesel every month. The company only had small
amount of investment in the beginning of its establishment and it can only produce minimal
volume of biodiesel at a time. The hardship and determination to improve the company lead
the staffs and directors to burn the midnight oil, hence, proving that it is worth the effort with
the current company standings in the local and global market.

The depletion of natural resources in our world has raised concern across the globe mainly the
chemical industry. Natural resources has been known for its contribution on motorised
industries whereby it is used to generate energy for daily activities. With natural resources
decreasing every years, attention on biodiesel energy has been brought upon on top
management of every chemical and government organization. This action is to reduce the
dependency on the natural resources, and focusing on the innovation of biodiesel instead.

Hence, our company are trusted to provide the best biodiesel in accordance with client’s
requirement. This brought us to develop more efficient and better biodiesel content aside with
producing researches incentives for greener and safe environment. The main office is located
at Kertih Biopolymer Park while research and development department are expected to be
located at Kerteh in the near future.

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1.2 Company’s Organizational Chart

Figure 1: Company’s organizational chart

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1.3 Schedule of Task and Responsibilities
Table 1: Responsibilities for each position.

POSITIONS RESPONSIBILITY

1. To lead the development of the company with a good strategy

and help from the Board Directors
2. To oversee the implementation of company’s long and short
plans.
3. To ensure the company is appropriately organized and staffed.
4. Has the authority to hire and terminate staff.
Chief Executive 5. To ensure the expenditures is within the authorized company’s
Officer budget.
6. To assess the risks of the company and keep on monitoring and
managing the risks well.
7. To conduct company with appropriate system in both lawfully
and ethically.
8. To communicate effectively with the shareholders, employees,
Government authorities and public.
1. Represents the president by welcoming visitors, reviewing
correspondence; arranging company dinners and other corporate
functions; answering questions and meeting requests directed to
the president.
2. Publishes the corporate newsletter by gathering information;
preparing and editing articles; designing graphic presentation;
Executive
producing and distributing.
Assistant
3. Helps key executives make consistent decisions by advising
them of historical precedents; serving as liaison between them
and the president.
4. Arranges corporate travel and meetings by developing itineraries
and agendas; scheduling the corporate jet; booking other
transportation; arranging lodging and meeting accommodations.

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 5. Completes projects and special assignments by establishing
objectives; determining priorities; managing time; gaining
cooperation of others; monitoring progress; problem-solving;
making adjustments to plans.
6. Updates job knowledge by participating in educational
opportunities; reading professional publications; maintaining
personal networks; participating in professional organizations.
7. Improves quality results by studying, evaluating, and re-
designing processes; implementing changes.
8. Enhances president's and corporation's reputation by accepting
ownership for accomplishing new and different requests;
exploring opportunities to add value to job accomplishments.

1. Plays a major role in the formulation of the company policies and

goals.
2. Has heavy influence in planning, implementation, and directing
the manufacturing activities.
3. To oversees the budgetary issues related to manufacture and
Vice President production.
Manufacturing 4. To provide technical direction to the company.
5. Enhance the product lines.
6. Supervise the low superiors’ production facility management to
produce high quality dairy products.
7. Set up policies in material usage, capacity planning, production
methods and employee relations.

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 1. . To develop and implement an overall marketing and sales
strategy for company products, including pricing and customer
service policies and advertising programs. Develops marketing
action plans that clearly define objectives, goals, schedules and
assignments to implement and achieve targeted opportunities.

2. To develop a plan and supporting procedures for customer order

processing; to supervise a staff of salespeople and customer-
service representatives who implement that plan.

3. To carry out a program for market research and analysis

including market segments, buying trends and competitor
Vice President
analysis.
Marketing and
Sales 4. To provide recommendations for improving or adding new
product designs and assists with product development and
testing.

5. Maintains relationships with advertising agencies, public

relations firms and market research firms.

6. Oversees and verifies reporting of sales and marketing activities,

including leads generated and tracking reports, sales orders
received, sales by product, backlog reports and customer lists and
determines appropriate reporting frequency, such as weekly,
monthly, and quarterly basis

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 1. Collaborate with management team to craft the company’s vision
and mission.
2. Developing strategic human resources plans and policies.
3. Hiring, guiding, and evaluating the work of human resources
executives.
Vice President
4. Decide and act on initiatives of labour for equal opportunity and
Human Resources
diversity.
5. Assume the responsibility of labour and employee relations.
6. Re-engineer processes to maximized efficiency.
7. Ensure all procedures comply with legal regulations and best
practices.
1. Ensure timely and accurate budget analysis and financial review
for management team.
2. Recommends and develops policies, procedures, and systems to
meet company objectives.
3. Provides strategic financial leadership and support on the
Vice President evaluation of potential alliances, acquisitions, mergers, pension
Finance funds, investments, and other issues regarding finance.
4. Build, develop, and manages finance and the team must capable
to carry out needed initiatives.
5. Make financial reporting systems and controls to ensure
compliance with company expenditure requirements and to meet
customer needs.
1. Lead, guide and mentor administrative staff in their tasks and
functions.

Vice President 2. Integrate and coordinate functions of administrative, finance,

Administration sales and marketing departments.

3. Develop innovative strategies to enhance performance of the

administrative staff.

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4. Assess and evaluate existing methods and functions in
administrative functions.

5. Track, monitor and document performance of each individual.

6. Integrate, upgrade and update all databases.

7. Plan, schedule and conduct training new employees.

8. Supervise functions of payroll, vendor payments and accounts

receivable and payable.

9. Manage accounting, investing and financial services including

audits.

10. Ensure best corporate practices in implementing administrative

activities.

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1.4 Business Location
1.4.1 Address
BIO-D SDN BHD
Kertih Biopolymer Park,
24300 Kerteh,
Terengganu, Malaysia
1.4.2 Plant layout

Figure 2: Plant layout for BIO-D SDN BHD.

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1.5 Factors Influencing Choice of Location

1.5.1 Availability of raw materials

The source of raw materials is one of the most important factors influencing the
selection of a plant site. This is particularly true if large volumes of raw materials are
consumed, because location near the raw-materials source permits considerable
reduction in transportation and storage charges. Attention should be given to the
purchased price of the raw materials, distance from the source of supply, freight or
transportation expenses, availability and reliability of supply, purity of the raw
materials, and storage requirements.

1.5.2 Market

The location of markets or intermediate distribution centers affects the cost of product
distribution and the time required for shipping. Proximity to the major markets is an
important consideration in the selection of a plant site, because the buyer usually
finds it advantageous to purchase from nearby sources. It should be noted that
markets are needed for by-products as well as for major final products.

1.5.3 Energy availability

Power and steam requirements are high in most industrial plants, and fuel is ordinarily
required to supply these utilities. Consequently, power and fuel can be combined as
one major factor in the choice of a plant site. Electrolytic processes require a cheap
source of electricity, and plants using electrolytic processes are often located near
large hydroelectric installations. If the plant requires large quantities of coal or oil,
location near a source of fuel supply may be essential for economic operation. The
local cost of power can help determine whether power should be purchased or self-
generated.

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1.5.4 Climate conditions

If the plant is located in a cold climate, costs may be increased by the necessity for
construction of protective shelters around the process equipment, and special cooling
towers or air-conditioning equipment may be required if the prevailing temperatures
are high. Excessive humidity or extremes of hot or cold weather can have a serious
effect on the economic operation of a plant, and these factors should be examined
when selecting a plant site.

1.5.5 Transportation facilities

Water, railroads, and highways are the common means of transportation used by
major industrial concerns. The kind and amount of products and raw materials
determine the most suitable type of transportation facilities. In any case, careful
attention should be given to local freight rates and existing railroad lines. The
proximity to railroad centers and the possibility of canal, river, lake, or ocean
transport must be considered: Motor trucking facilities are widely used and can serve
as a useful supplement to rail and water facilities. If possible, the plant site should
have access to all three types of transportation, and, certainly, at least two types
should be available. There is usually need for convenient air and rail transportation
facilities between the plant and the main company headquarters, and effective
transportation facilities for the plant personnel are necessary.

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1.5.6 Water supply

The process industries use large quantities of water for cooling, washing, steam
generation, and as a raw material. The plant, therefore, must be located where a
dependable supply of water is available. A 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 level of the existing water table 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 water supply shows
seasonal fluctuations, it may be desirable to construct a reservoir or to drill several
standby wells. The temperature, mineral content, silt or sand content, bacteriological
content, and cost for supply and purification treatment must also be considered when
choosing a water supply.

1.5.7 Waste disposal

In recent years, many legal restrictions have been placed on the methods for disposing
of waste materials from the process industries. The site selected for a plant should
have adequate capacity and facilities for correct waste disposal. Even though a given
area has minimal restrictions on pollution, it should not be assumed that this condition
will continue to exist. In choosing a plant site, the permissible tolerance levels for
various methods of waste disposal should be considered carefully, and attention
should be given to potential requirements for additional waste-treatment facilities.

1.5.8 Labor Supply

The type and supply of labor available in the vicinity of a proposed plant site must be
examined. Consideration should be given to prevailing pay scales, restrictions on
number of hours worked per week, competing industries that can cause dissatisfaction
or high turnover rates among the workers, and variations in the skill and productivity
of the workers.

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1.5.9 Taxation and legal restrictions
State and local tax rates on property income, unemployment insurance, and similar
items vary from one location to another. Similarly, local regulations on zoning,
building codes, nuisance aspects, and transportation facilities can have a major
influence on the final choice of a plant site. In fact, zoning difficulties and obtaining
the many required permits can often be much more important in terms of cost and
time delays than many of the factors discussed in the preceding sections.

1.5.10 Site characteristics

The characteristics of the land at a proposed plant site should be examined carefully.
The topography of the tract of land and’ the soil structure must be considered, since
either or both may have a pronounced effect on construction costs. The cost of the
land is important, as well as local building costs and living conditions. Future
changes may make it desirable or necessary to expand the plant facilities. Therefore,
even though no immediate expansion is planned, a new plant should be constructed
at a location where additional space is available.

1.5.11 Flood and fire protection

Many industrial plants are located along 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 events of this type should be examined and the
consequences of such occurrences considered. Protection from losses by fire is
another important factor in selecting a plant location. In case of a major fire,
assistance from outside fire departments should be available. Fire hazards in the
immediate area surrounding the plant site must not be overlooked.

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1.5.12 Community factors

The character and facilities of a community can have quite an effect on the location
of the plant. If a certain minimum number of facilities for satisfactory living of
plant personnel do not exist, it often becomes a burden for the plant to subsidize
such facilities. Cultural facilities of the community are important to sound growth.
Churches, libraries, schools, civic theaters, concert associations, and other similar
groups, if active and dynamic, do much to make a community progressive. The
problem of recreation deserves special consideration.

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1.6 Company Objectives

Our goals are certain to produce a product which is globally certified and meet our potential
customer’s requirements, yet improving of any ways possible to enhance its purity and
performances.

1.7 Vision

BIO-D SDN BHD is managing its supply chains in such a way that it is at the forefront of
biochemical development and sustainability, offering a competitive edge in the global
environment.

1.8 Mission

BIO-D SDN BHD identifies and priorities key challenges for the biochemical industry and
develops and steers an action program to address these, taking into account legal, political and
company boundaries.

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 2.0 SELECTION OF PRODUCT AND SITE SELECTION

2.1 Product Selection

2.1.1 Product selection by using Screening Method

Biodiesel is an alternative fuel like conventional or ‘fossil’ diesel. Biodiesel can be

produced from straight vegetable oil, animal oil/fats, tallow and waste cooking oil. The
process used to convert these oils to Biodiesel is called transesterification. The largest
possible source of suitable oil comes from oil crops such as rapeseed, palm or soybean.
Most biodiesel produced at present is produced from palm crude oil. After the cost of
converting it to biodiesel has been added on it is simply too expensive to compete with
fossil diesel. There are three basic processes for biodiesel production from oils and fats:

 Alkali/Base catalysed transesterification of the oil.

 Direct acid catalysed transesterification of the oil.
 Conversion of the oil to its fatty acids and then to biodiesel (Esterification).

The transesterification process is the reaction of a triglyceride (fat/oil) with an alcohol to

form esters and glycerol. A triglyceride has a glycerine molecule as its base with three
long chain fatty acids attached. The characteristics of the fat are determined by the nature
of the fatty acids attached to the glycerine. The nature of the fatty acids can in turn affect
the characteristics of the biodiesel. During the esterification process, the triglyceride is
reacted with alcohol in the presence of a catalyst, usually a strong alkaline like sodium
hydroxide.

The alcohol reacts with the fatty acids to form the mono-alkyl ester, or biodiesel and
crude glycerol. In most production methanol or ethanol is the alcohol used (methanol
produces methyl esters, ethanol produces ethyl esters) and is base catalysed by either
potassium or sodium hydroxide. Potassium hydroxide has been found to be more suitable
for the ethyl ester biodiesel production, either base can be used for the methyl ester. A
common product of the transesterification process is Rape Methyl Ester (RME) produced
from raw rapeseed oil reacted with methanol.

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 Table 2: Process Selection
Comparison of various
catalysts for Advantages
transesterification.
Homogenous base  Very fast reaction rate
 Mild reaction conditions
 Inexpensive
Heterogeneous base  High basicity and non-
toxic
 Faster than acid-
catalysed reaction
 Mild reaction conditions
 Easy separation of
catalyst
 Easy to reuse and
regeneration of catalyst
Homogenous acid  Insensitive to FFA and
water content
 Simultaneous
esterification and
transesterification
possible
 Mild reaction conditions
Heterogeneous acid  Insensitive to FFA and
water content
 Simultaneous
esterification and
transesterification
 Easy separation of
catalyst
 Easy to reuse and
regeneration of catalyst
Disadvantages
 Huge amount of energy
needed
 Sensitive to FFA content
 Soap formation
 High post-production cost
 Catalyst cannot be reused
 Large amount of
wastewater
 Produced low quality
glycerol
 Poisoned at ambient air
 Sensitive to FFA content
 Soap formation
 Leaching of catalyst
causing contamination of
product
 Energy intensive
 Very slow reaction rate
 Corrosive catalyst (e.g.
H2SO4)
 Separation of catalyst is
difficult
 Complicated reaction
synthesis leading to
higher processing costs
 High reaction
temperature, high alcohol
to oil molar ratio, long
reaction time
 Energy intensive
 Leaching of catalyst
causing contamination of
product
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The vital element in the production of biodiesel was the catalyst used in the process. We
decided to take four type of catalyst that might be chosen in the process of biodiesel. In
the above table, scoring method of unweighted factor model is used to examine the
selection criteria that we choose as important to our company with scale of 1 to 3 with 1
as the lowest score and 3 as the highest score. Based on the unweighted factor model, the
suggested catalyst used in the process of biodiesel production is heterogeneous base
catalyst.

The selected catalyst has some advantage of product’s availability to reach market,
catalyst reformation and the medium processing cost. Even though the catalyst in
insensitive to Free Fatty Acid (FFA) which would increase the formation of soap and
effect the post process cost, it is not as high as post-production cost of homogenous
catalyst which have a large amount of wastewater to be treated and energy used. Same
goes to both acid catalysts which have relatively high post-production cost like catalyst
corossivity and the chance pf product contamination for homogenous and heterogeneous
acid, respectively.

Almost all biodiesel is produced using base catalysed transesterification as it is the most
economical process requiring only low temperatures and pressures and producing a 98%
conversion yield. For this reason only this process (base catalysed transesterification)
will be described in this report.

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 2.1.2 Product selection by Unweighted Factor Model

Table 3: Weight factor for product selection

Weight Description
1 Low Score
2 Medium Score
3 High Score

Table 4: Selection Criteria

Homogenous Heterogeneous Homogenous Heterogeneous
Selection Criteria
base base acid acid

Facility and equipment 2 2 2 2

Availability of raw
2 2 2 2
materials

Product potential market 2 2 2 2

Time to Market 3 3 1 2

Sensitivity to Free Fatty

1 1 3 3
Acid (FFA)

Catalyst Reformation 1 3 3 2

Feedstock Cost 2 2 3 3

Processing Cost 2 3 2 1

Post-Production Cost 1 2 1 1

TOTAL 16 20 19 18

Rank 4 1 2 3

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2.2 Site Selection
2.2.1 Site selection by using Screening Method
For our site selection, we proposed three locations;

1) Kertih Biopolymer Park, 24300 Kerteh, Terengganu.

 12.0 acres (RM 8,911,550)
 Suitable for warehouse, factory, storage and distribution.
 Near to source of raw materials
 Strategic location for exporting
 Good location
 Easy access
 Flat land

2) No P75, Pekan Pengerang, 81600 Pengerang, Johor.

 3.0 acres (RM6,423,000)
 Easy to access
 Strategic location for exporting
 Beside main road
 Behind Sea

3) Seberang Perai Tengah, 13600 Seberang Perai, Penang.

 5.0 acres (RM10,000,000)
 Suitable for light industry
 Strategic location for exporting

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2.2.2 Site selection by using Weighted Factor Model

Table 5: Weight factor for site selection

Weight Description

1 Low Score

2 Medium Score

3 High Score

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 Table 6: Site Location

Seberang Perai Tengah, No P75, Pekan

Criteria to Weighted Kertih Biopolymer Park,
13600 Seberang Perai, Pengerang, 81600
consider 24300 Kerteh,
Penang. Pengerang, Johor.
Terengganu

Raw Weighted Raw Weighted Raw Weighted

score score score score score score
Source of
raw materials 12 2 24 1 12 3 36

Size of area 10 2 20 1 10 3 30

Transportation 8 3 24 2 16 1 8

Expansion
Potential 8 1 8 2 16 3 24

Energy
Availability 10 3 30 3 30 3 30

Price 12 2 24 2 24 3 36
Natural
climatic
10 3 30 2 20 2 20
conditions
Topography
conditions 8 2 16 2 16 3 24

Location
with the
12 2 24 1 12 3 36
suppliers
Distance
from
2
residential 10 3 30 20 2 20
area

TOTAL 100 230 176 264

Rank 2 3 1

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2.3 Map of Selected Location

Figure 3: Suggested Location (Kertih Biopolymer Park, 24300 Kerteh, Terengganu)

Figure 4: Suggested Location via Satellite (Kertih Biopolymer Park, 24300 Kerteh, Terengganu)

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2.4 Net Present Value (NPV)
Since projects in general require a substantial investment in terms of money and resources,
both of which are limited, it is of vital importance that the projects that an organization selects
provide good returns on the resources and capital invested. The proper selection of investment
projects is crucial to the long run survival of every organization. The major function of the
selection process is to ensure that several conditions are considered before a commitment is
made to undertake any project. Numeric project selection models are models that use numbers
of evaluation. The net present value (NPV) of a project is equal to the present value of the cash
inflows minus the present value of the cash outflows all discounted at the discount rate.
Formula of Net Present Value (NPV) is given as follows:

𝐹𝑉 𝐹𝑉1 𝐹𝑉2 𝐹𝑉𝑛

𝑁𝑃𝑉 = −𝐼𝑜 + ∑𝑛𝑡=1 (1+𝑘)
𝑡
𝑡 = −𝐼0 + 1 + 2 +
(1+𝑘) (1+𝑘) (1+𝑘)𝑛
Where,
FVt = Net cash flow from the project in period t
k = The discount rate
n = Economic life of the project
I0 = Initial investment of the project

Hence,
𝑛=5
46,342,537
𝑁𝑃𝑉 = −9,402,615 + ∑
(1 + 0.15 + 0.03)𝑛
𝑡=1

= RM 179,562,127.00

With the calculation performed by using Net Profit Value (NPV), we can conclude that the
project are expected to yield a high profit in the upcoming long run.

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 3.0 FEASIBILITY STUDY OF MARKET, PROCESS AND TECHNOLOGY

3.1 Overview feasibility

Table 7: Feasibility studies
Market Process Technology
Biodiesel market is The production of biodiesel is In the batch reactor, the reactants
growing rapidly and the from the vegetable oils. are charged into the reactor at the
demand for biodiesel is determined amount. The reactor
becoming higher. is then closed and taken to the
desired reaction conditions
(temperature, pressure, and stir
rates).
The demand of biodiesel Biodiesel consist of fatty acid For CSTRs, the reactants are fed
start to increase especially methyl is produced from into a well-mixed reactor. The
in western country. chemical reaction of oils and composition of the product
fats with methanol. stream is identical to the
composition within the reactor.
Hold-up time in a CSTR is given
by a residence time distribution.
The market value of Transesterification process will For PFRs, the reactants are fed
biodiesel increasing. convert free fatty acid into into one side of the reactor. The
biodiesel chemical composition changes as
the material moves in plug flow
through the reactor. The
residence time is defined by the
length of time required for
molecules to travel through the
reactor.

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Biodiesel is a new Two major products will exists Centrifuges are most typically
initiative to replace the (glycerine and biodiesel) and it used to separate solids and
diesel. will be separated. liquids, but they can also be used
to separate immiscible liquids of
different densities. This type of
separation can also be achieved
using a settling tank.
Biodiesel is a better fuel The catalyst in the glycerine Another means of separating
compare to petroleum will be neutralized and soaps chemicals in a fluid mixture is by
diesel. are split to fatty acids and salts. exploiting the differences in
Free fatty acids and methanol boiling points between the
will be removed and recovered. chemicals. If the boiling points
are sufficiently different for the
chemicals to be separated, such as
with water and biodiesel, an
evaporator or flash vaporizer can
be used for the separation.
Biodiesel is a fuel safe, The glycerine will be Tray distillation columns are the
renewable, non-toxic, neutralized. most common. A tray is where
biodegradable and much contacting occurs between the
less contaminant for the vapour stream and the liquid
environment than stream.
conventional diesel. It
represents a strategic
source of energy
especially for the countries
that have not oilfields.
The biodiesel will be washed
gently with warm water.

29 | P a g e
3.2 Introduction to Biodiesel Process Flow
When a liquid mixture is heated so that it boils, the evolved vapour will have a higher
concentration of the more volatile (i.e., lower boiling point) components than the liquid
mixture from which it evolved. Conversely, when a vapour mixture is cooled, the less volatile
components tend to condense in a greater proportion than the more volatile components.

Figure 5: Schematic diagram of a continuous binary distillation column.

Figure 5 schematically illustrates what happens in a distillation column. A liquid mixture is

fed into the distillation column. On entering the column, the heated feed is partially vaporized
and rises up the column. However, as it rises, it cools by contacting the descending cooler
liquid and partially condenses so that, while part of vapour continues to flow upward, the
condensed portion is enriched in the less volatile component(s) and flows downward. As the
vapour continues to flow upward, it undergoes partial condensation a number of times and
each time becomes richer in the more volatile component(s).

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The part of the feed liquid that did not vaporize on entering the column, flows downward and
is heated by contacting the upward flowing hot vapour until it is partially vaporized. The
resulting vapour flows upward and the residual liquid is enriched in the less volatile
components and flows downward. As the liquid continues to flow downward, it undergoes
partial vaporization a number of times and each time becomes richer in the less volatile
components.

Heat is required to provide the multiple occurrences of partial vaporization in a distillation

column. The required heat is applied to the bottom of a distillation column in a number of
ways, the most common being the transfer of heat from a reboiler. Similarly, cooling is required
to provide the multiple occurrences of partial condensation that also occur in a distillation
column. The required cooling is most usually provided by a condenser used to cool and
condense the overhead vapour into a liquid and then returning part of the cool condensed liquid
to the top of the column as reflux.

The overhead condenser may be water-cooled or air-cooled. The bottoms reboiler may be a
heat exchanger heated by steam or hot oil, or it might be a fuel-fired furnace. The location of
the feed entry can vary from one design to another and is selected to provide optimum results
(McCabe-Thiele method).

A continuous distillation column is kept in a steady state or approximate steady state. In the
context of continuous distillation, that means that the feed rate, output product rates, reflux
rate, heating and cooling rates, temperatures, pressures, and compositions at every point within
the column are essentially kept constant during operation. It also means that the column is
material-balanced and heat-balanced (i.e., the material inputs equal the material outputs, and
the heat inputs equal the heat outputs). If a variation in conditions does occur, modern process
control equipment is usually able to gradually return the system to a steady state again.

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3.3 Process flow

This section will describe the process of biodiesel production from vegetable oils where the
triglyceride oil is broken into alkyl (biodiesel) and glycerine by reaction with a mono alcohol.
The biodiesel and glycerine phases are then separate and purified. Production processes contain
the same stages, irrespective of the production scale, although the differences in equipment
may be significant.

Process steps are as follows:

1) Feeding the Palm Oil + Methanol and Catalyst

 Biodiesel consists of Fatty Acid Methyl Ester is produced by the chemical reaction
of oils and fats with methanol. A catalyst, usually sodium or potassium hydroxide
is utilize to accelerate the formation of alkyl esters.
2) Reaction Stage/Transesterification
 The objective of the transesterification is to convert the free fatty acid (FFA)
fraction of the feedstock into biodiesel. When the FFA content is high, the reaction
stage will be conduct in transesterification.
3) Separation Stage
 Once the reaction is complete, two major products exist: glycerine and biodiesel.
Each has a substantial amount of the excess methanol that was used in the reaction.
The reacted mixture is sometimes neutralize at this step if needed. The glycerine
phase is much denser than biodiesel phase and the two can be gravity separated
with glycerine simply drawn off the bottom of the settling vessel.
4) Acidulation and FFA Separation
 The glycerine after the separator is usually 50% glycerine, 40% methanol and 10%
soap and catalyst. The catalyst is neutralize and soaps are split to fatty acids and
salts. Free fatty acids and methanol are remove and recovered.
5) Glycerine Neutralization
 The glycerine by-product contains unused catalyst and soaps that are neutralize
with an acid and sent to storage as crude glycerine.
 Refined Glycerine: Crude glycerine are further refined to pharmaceutical or
technical grades or feed grades by removing water and salts by distillation.

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6) Methyl Ester Wash
 Once separated from the glycerine, the biodiesel is sometimes purified by washing
gently with warm water to remove residual catalyst or soaps, dried, and sent to
storage.
 To increases biodiesel purity.
7) Storage (by-product)
 Glycerine is stored in suitable storage tanks.
8) Transport (by-product)
 Transportation is required for the processed co-product glycerine.
9) Storage and Transport (Product)
 Methyl Ester is stored in suitable storage tanks
 Transportation of the final product to the vendor

Feeding the Palm Oil

+ Methanol and Reaction
Separation Stage
Catalyst in the feed Stage/Transesterification
reactor

Acidulation and FFA Glycerin

Methyl Ester Wash
Separation Neutralization

Storage & Transport

Storage (Glycerine) Transport (Processed
(Final Biodiesel:
by-product co-product glycerine)
Methyl Ester)

Figure 6: Process flow in Block Flow Diagram (BFD)

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3.3 Process flow diagram (PFD)

Figure 7: Process Flow Diagram (PFD) of production

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 4.1 Mind Map

Process Flow
Palm Oil Fed with Catalyst
Transesterification reaction
Separation stage

Resource Allocation Recycle of methanol

Process Selection Acidulation and FFA separation

Operations
Planning Glycerine Neutralization
Budget Preparation
Methyl Ester Wash
Resource Scheduling
Storage by-products
Major Equipment Installation
Installation Transport Processed Co-Product
Electric Installation Bio-Diesel Production
Facilities Storage of Bio-Diesel
Maintenance
Transport of Biodiesel

Figure 8: Mind map

Marketing Plan
Product Design
Needs Specification Marketing
Quality In-Process Inspection
Demand Assurance
s Product Inspection
4.0 MIND MAPPING AND WORK BREAKDOWN STRUCTURE (WBS)

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 4.2 Work Breakdown Structure (WBS)

Bio-Diesel Production

Planning Facilities Marketing Operations Quality Assurance

Resource
Installation Maintenance Marketing Plan Process Flow Product Design
Allocation

Major Equipment Needs Palm Oil Fed with In-Process

Process Selection
Installation Specification Catalyst Inspection

Transesterification
Budget Preparation Electric Installation Demands Product Inspection
reaction

Resource
Separation stage
Scheduling

Recycle of
methanol

Acidulation and
FFA separation

Glycerine
Neutralization

Methyl Ester Wash

Storage by-
products

Transport
Processed Co-
Product

Storage of Bio-
Diesel

Transport of
Biodiesel

Figure 9: WBS

36 | P a g e
 5.0 PROJECT SCHEDULING

5.1 Activity on Arrow (AOA) Diagram

Table 8: Project scheduling
Duration
Activity Description Precedent
(hours)
Feeding the palm oil with methanol and catalyst in
A 2 -
the feed reactor
B Transesterification reactor 3 A
C Separation stage 3 B
D Recycle of methanol 1 C
E Acidulation and Free Fatty Acid (FFA) separation 3 C
F Glycerin Neutralization 3 E
G Methyl Ester Wash 2 E
H Storage (Glycerin) by-product 1 F
I Transport of processed co-product Glycerin 2 H
J Storage of final Biodiesel: Methyl Ester 1 G

K Transport of Final Biodiesel: Methyl Ester 2 J

The diagram shown below illustrates the network diagram for the processes in producing a
Fatty Acid Methyl Ester (FAME) and Glycerin which acts as a profitable by-product. There
are 3 networks involved in the manufacturing process which is ABCD network, ABCEGJK
network and ABCEFHI network. Of all the networks drawn, the longest duration for a network
is called the critical duration. It is calculated that the critical path network (the longest network
path) which is ABCEFHI network requires a total of 17 hours. This proves that the path cannot
be delay as it will be affecting the project duration as a whole.

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Figure 10: Activity on Node (AOA) diagram

38 | P a g e
5.2 Activity on Nodes (AON) Diagram

Table 9: Project scheduling

Duration
Activity Description Precedent
(hours)
Feeding the palm oil with methanol and catalyst in
A 2 -
the feed reactor
B Transesterification reactor 3 A
C Separation stage 3 B
D Recycle of methanol 1 C
E Acidulation and Free Fatty Acid (FFA) separation 3 C
F Glycerin Neutralization 3 E
G Methyl Ester Wash 2 E
H Storage (Glycerin) by-product 1 F
I Transport of processed co-product Glycerin 2 H
J Storage of final Biodiesel: Methyl Ester 1 G

K Transport of Final Biodiesel: Methyl Ester 2 J

The diagram shown below illustrates the network diagram for the processes in producing a
Fatty Acid Methyl Ester (FAME) and Glycerin which acts as a profitable by-product. There
are 3 networks involved in the manufacturing process which is ABCD network, ABCEGJK
network and ABCEFHI network. Of all the networks drawn, the longest duration for a network
is called the critical duration. It is calculated that the critical path network (the longest network
path) which is ABCEFHI network requires a total of 17 hours. This proves that the path cannot
be delay as it will be affecting the project duration as a whole.

39 | P a g e
Figure 11: Activity on Node (AON) diagram.

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 5.3 Gantt Chart

Figure 12: Gantt Chart for the project.

41 | P a g e
 6.0 PROJECT BUDGETING AND COSTING

6.1 Raw Materials

A total of 7 ton of raw materials is needed to perform the process.
A total of 6 ton of product is produces per day. 2 ton of product is Biodiesel while 1 ton is the
product of Glycerine.
No. Raw Material RM/kg RM/day RM/month RM/year
1. Palm Oil 02.04 12634.37 379031.18 4548374.21
2. Methanol 20.93 06035.37 181061.11 2172733.20
3. Sodium Hydroxide (NaOH) 36.92 00110.76 003322.80 0039873.60
TOTAL 6,760,981.01

1kg=1000kg=1tonne
1barrel=300lbs=136.078kg=7.3barrel/1ton=21.9barrel/3ton
1month=30days
6.2 Machinery
Price (RM) / Total Price
NO. Type of Machine Unit
Unit (RM)
1. Transesterification reactor 2 43958.25 0087916.5
2. Distillation column 2 65757.36 131514.72
3. Glycerine Separator 1 10466.25 010466.25
4. Kettle reboiler 4 01858.81 007435.24
5. Pump (centrifugal, double diaphragm) 10 03453.86 0034538.6
6. Heat exchanger 2 1255.95 0002511.9
7. Tank 5 16746.00 083730.00
8. Delivery transportation (tank truck) 2 54424.50 108849.00
9. Control panel in control room 1 10252.70 010252.70
10. Valve 22 00043.82 000964.04
11. Condenser 3 04295.35 012886.05
TOTAL 212,512.90 491,065.00

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6.3 Manpower budgeting

Number Salary
No of
Description of Total Salary
Months (RM/month) (RM/year)
Workers
Head of
5 12 12000.00 144000 720000
Department
Manager 4 12 9808.25 117699.00 470796

Supervisor 3 12 2851.75 034221.00 102663

Engineer 1 12 3587.92 043055.00 43055

Accountant 1 12 5044.58 060535.00 60535

Chemists 1 12 2850.00 034200.00 34200

Technician 5 12 2039.17 024470.00 122350

General worker 3 12 1321.00 015852.00 47556

TOTAL 474,032.00 1,601,155

6.4 Cash Inflow

Product Income
4500𝑘𝑔 365𝑑𝑎𝑦𝑠 𝑚3 1𝐿 1$ 𝑅𝑀4.19 5 1𝑦𝑒𝑎𝑟
𝑥 𝑥 𝑥 3
𝑥 𝑥 𝑥
1 𝑑𝑎𝑦 1𝑦𝑒𝑎𝑟 887.5𝑘𝑔 0.001𝑚 𝐿 1$ 1 5𝑦𝑒𝑎𝑟
Biodiesel

= RM 38,772,254.00/5years
1500𝑘𝑔 660$ 365𝑑𝑎𝑦𝑠 𝑅𝑀4.19 5 1𝑦𝑒𝑎𝑟
𝑥 𝑥 𝑥 𝑥
Glycerine 1 𝑑𝑎𝑦 1000𝑘𝑔 1𝑦𝑒𝑎𝑟 1$ 1 5𝑦𝑒𝑎𝑟
= RM 7,570,283.00/5years
TOTAL RM 46,342,537.00

6.5 Land cost

The 12 acres of land is worth up to RM 8911550.00, and acts as a part of the initial
investment.
6.6 Total initial investment
The total initial investment is RM9402615.00.

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 7.0 EVALUATING AND TERMINATING PROJECT

7.1 Introduction to evaluating and terminating project

The term “evaluate” means to set the value of or appraise. A project evaluation appraises the
progress and performance relative to the project’s initial or revised plan. The evaluation also
appraises the project against the goals and objectives set for it during the selection process
amended, of course, by any changes in the goals and objectives made during the project’s life.
In addition, evaluations are sometimes made relative to other similar projects.

The project evaluation, however, should not be limited simply to an after-the-fact analysis.
Rather, it is useful to conduct an evaluation at a number of crucial points during the project life
cycle. Because the primary purpose of a project evaluation is to give feedback to senior
management for decision and control purposes, it is important for the evaluation to have
credibility in the eyes of both senior management and the project team. The control purpose of
evaluation is meant to improve the process of carrying out projects. The decision purpose is
intended to improve the selection process. Thus an evaluation should be as carefully planned
and executed as the project itself.

Besides, project termination is also called project close-out or final shut down. During this
phase, the people involved are acknowledging for their achieved goals and the work is
considered complete. The way project termination is managed can have an impact on the
success of the project. However, it has a major effect on the residual attitude toward the project
held by senior management, the client, the project team, and even others in the organization. It
also has a major effect on the organization’s successful use of the projects in the future. The
management team must consider the evaluations and considerations based on the types of
termination. The decisions of the termination are based on the types of project termination
below:

1) Termination by extinction

Occurs when the project activity suddenly stops, although there is still property,
equipment, materials, and personnel to disburse or reassign. The project was terminated
either because it was successfully completed or because the expectation of failure was
high.

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 2) Termination by addition

Occurs when an “in-house” project is successfully completed, and institutionalized as

new, formal part of the organization. This may take the form of an added department,
division, subsidiary, or other such organizational entity, depending on the magnitude
and importance of the project.

3) Termination by integration

It represent a common, but exceedingly complicated method for dealing with

successful projects. The project’s resources, including the project team, are reintegrated
within the organization’s existing structure following the conclusion of the project. The
output of the project becomes a standard part of the operating systems of the sponsoring
firm, or the client.

4) Termination by starvation

Occurs when it is impolitic to terminate a project but its budget can be squeezed, as
budgets always are, until it is a project in name only. The project may have been
suggested by a special client or senior executive, or perhaps terminating the project
would be an embarrassing acknowledgement of managerial failure.

To decide which project should be continued and which project should be dropped, the project
manager needs to identify:

1) Luxury projects

2) The potential risk of all the project

3) Projects that has a strategic imperative

4) Project that drive to future revenues and growth

5) Project that can be delivered successfully by matching skill and strength of the
company

45 | P a g e
If the company has met its stability, the company is ready to open up a new brunch. This
process is crucial in order to sustain the business performance and to expand the company to
whole new level. A success project is comes from the success in project execution and with
proper termination. In this context, the project manager decided to do a termination by addition.
With the success of this project production of biodiesel in Malaysia, the management team had
discussed to expand the business to other countries where biodiesel is use as transportation fuel
such as trucks, busses and tractors.

As below is the primary duty of the project manager when doing termination:

1) Need to ensure the successful of the

2) All deliveries is accomplished

3) Completion of all documentation

4) Redistribute all the resources to the appropriate places

5) Have a very strong business plan in order to purse the idea of business expansion

46 | P a g e
7.2 Termination process
It is the best for a comprehensively based council of executives’ senior officials to make the
termination process. The project manager will be the one who will expand the project, helped
by the specialist in project termination manager to do a long process of expansion. The chart
of termination project is shown below

Figure 13: Process for termination.

7.3 Project Final Report
Table 10: Project Final Report

Project Name Production of biodiesel (Methyl Ester)

The production of biodiesel (methyl ester), the achievement and the
Project
Performance production results
Administrative The administrative that worked well
performance
The structure of this company from early start to termination
Organizational
structure process
Project Team members who worked well
teamwork
The skills and technique in planning, budgeting and costing,
Management
technique selection, scheduling and terminating project.

47 | P a g e
 8.0 CONCLUSION

The raw materials for biodiesel production are vegetable oils, animal fats and short chain alcohols.
The oils most used in Asian and Central American countries are palm. Meanwhile, methanol is the
most frequently used alcohol although ethanol can also be used. Since cost is the main concern in
biodiesel production and trading (mainly due to oil prices), the use of non-edible vegetable oils
has been studied for several years with good results. Besides its lower cost, another undeniable
advantage of non-edible oils for biodiesel production lies in the fact that no foodstuffs are spent to
produce fuel.

As we know, oil palm is a tropical plant that reaches a height of 20–25 m with a life cycle of about
25 years. Full production is reached 8 years after planting. Two kinds of oil are obtained from the
fruit: palm oil proper, from the pulp, and palm kernel oil, from the nut of the fruit (after oil
extraction, palm kernel cake is used as livestock food). Several high oil-yield varieties have been
developed. Indonesia and Malaysia are the leading producers. International demand for palm oil
has increased steadily during the past years, the oil being used for cooking, and as a raw material
for margarine production and as an additive for butter and bakery products. It is important to
remark that pure palm oil is semisolid at room temperature (20–22OC), and in many application
sis mixed with other vegetable oils, sometimes partially hydrogenated.

In a nutshell, there are significant advantages in the use of biodiesel as a replacement of diesel fuel
and in blends. The vegetable oils used as raw materials can be obtained from different oil crops
that may be grown in a wide variety of environments, some of which are not adequate for
traditional agricultural production. Microalgae grown in ponds and photo biological reactors have
also great potential for the production of oils for biodiesel production. Moreover, used cooking
oils and fat residues from the meat processing industry may also be employed in biodiesel
production.

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 9.0 RECOMMENDATIONS

Transportation is the biggest system which depend on fuel. Nowadays, it is only one single fuel
that is used to support the transportation globally, which is conventional oil. Demand for oil is
expected to grow for the upcoming years, along with the overall demand for energy. Biofuels can
help meet this demand by producing straight from vegetable oil, animal oil/fats, tallow and waste
cooking oil by process called transesterification.

To increase the production of biofuel in the future to shorten our time to reach the market, the
consistent policies and support from broad of stakeholders are needed. Other than that, increasing
in efficiency of production remains the cheapest way to decrease the pollution and security risks
associated with petroleum use.

Introduce biofuels as fuels with the certified sustainability schemes by governments. Since biofuels
are the alternative to conventional diesel, usage of biofuels in government vehicle could be a good
move to support biofuel industry. For government linked company like government’s sub-contract
or any company, tax incentives can be given to support a better fuel in the market. One of the
major concerns of the biofuels are its price on the market. With initiatives, the price of the biofuels
can be more competitive with the conventional diesel in the market.

Government policies on biofuel should focus more on market development of the biofuels itself.
The gap between production and demand for biofuels should be controlled to ensure stability
between them. Consumer demand could be a powerful driver of the renewable fuels market. In the
scope of biofuels, strategies to increase public awareness about biofuels can be held including
various forms of public education, such as formal awareness campaigns, public announcements,
and university research.

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