DATE: FEBRUARY 22, 2023

ADDIS ABABA UNIVERSITY

ADDIS ABABA INSTITUTE OF TECHNOLOGY

SCHOOL OF CHEMICAL AND BIO-ENGINEERING

CHEMICAL ENGINEERING DESIGN PROJECT

Title: PRODUCTION OF RBD TALLOW AS A RAW

MATERIAL FOR BAR SOAP

NAME OF STUDENTS ID NUMBER

1. Hibreselam Dereje ATR/8198/11

2. Melaku Daniel ATR/8133/11
3. Yemisrach Yared ATR/1212/11
 Acknowledgments

First and foremost, we want to express our gratitude to God for allowing us the stamina to
work on and finish this project. We would like to thank the Addis Ababa Institute of
Technology for helping us with this project by giving the resources we needed. Also, we
want to thank our lecturers, Mr. Molalign E. and Mr. Habtamu A., without whose help this
project would not have been feasible. Finally, we would like to express our gratitude for the
insightful criticism and remarks that we have received from our peers.

i
 Abstract

Tallow is the rendered form of animal fat. It is primarily made up of triglycerides. It is

primarily derived from rendered beef tissue but can contain other animal fats as well. It is
used as an inexpensive and readily available domestic raw material for the production of soap
due to its chemical similarity to oils. RBD tallow or rendered, bleached and deodorized
tallow is better raw material than normal tallow for the production of soap due to its better
color and odor. This project aims to produce RBD tallow and test the physicochemical
properties of the product.

ii
Table of Contents

Acknowledgments i

Abstract ii

Table of Contents iii

List of Figures v

List of Tables vi

CHAPTER ONE 1

1. Introduction 1

1.1. Background 1

1.2. Statement of the Problem 2

1.3. Objectives 2

1.3.1. General Objective 2

1.3.2. Specific Objectives 2

1.4. Significance of the Study 2

1.5. Scope of the Study 3

CHAPTER TWO 4

2. Literature Review 4

2.1. Historical Background 4

2.2. Worldwide Tallow Production 5

2.3. Tallow Production Africa 6

2.4. Uses of Tallow 6

2.5. Raw Materials 6

2.6. Process Technology 7

2.6.1. Rendering Process 7

2.6.2. Bleaching Process 8

iii
 2.6.3. Deodorizing Process 9

CHAPTER THREE 10

3. Materials and Methods 10

3.1. Raw Material Collection, Transportation, Sample Preparation and Storage 10

3.2. Processing Methods 10

3.3. Methods of Analysis 10

CHAPTER FOUR 13

4. Suggested Process Technology for Production of RBD Tallow 13

4.1. Process Technology of RBD Tallow 13

4.2. Material and Energy Balance on Major Unit Iperations 13

4.2.1. Material Balance 13

4.2.2. Energy Balance 16

4.3. Economic Evaluation of the Plant 18

4.3.1. Plant Capacity 18

4.3.2. Equipment and Installation cost 19

4.3.3. Fixed Capital Investment Estimation 20

4.3.4. Total Production Cost Estimation 21

4.3.5. Financial Evaluation 24

CHAPTER FIVE 27

5. Conclusion and Recommendation 27

5.1. Conclusion 27

5.2. Recommendation 27

References 28

iv
List of Figures

Figure 1: Process flow diagram of plant 13

Figure 2: Material balance block diagram of the renderer 13

Figure 3: Material Balance block diagram of the mechanical Screw Press 14

Figure 4: Cash Flow for ten years 26

v
List of Tables

Table 1: Equipment and Their Cost 19

Table 2:Annual requirement and price of raw materials 22

Table 3: Utilities required and their cost 22

Table 4: Human resource and Training 23

Table 5: Total production cost estimation 24

Table 6: Construction and finance 24

Table 7: Depreciation 24

vi
 CHAPTER ONE

1. Introduction

1.1. Background

Tallow is a rendered form of beef or mutton fat, primarily made up of triglycerides. It is

primarily derived from rendered beef tissue but can contain other animal fats as well. In terms
of total volume and economic value, tallow is one of the most important animal fats. (H.W.
Ockerman, 2014)

As a saturated animal fat, tallow almost looks like a hybrid of coconut oil and butter, but with
a dry, waxy texture. It’s generally made from cattle fat, but can come from any animal,
except pork, pork tallow is called lard. So, tallow is basically cow lard.

In industry, tallow is not strictly defined as beef or mutton fat. In this context, tallow is
animal fat that conforms to certain technical criteria, including its melting point. Commercial
tallow commonly contains fat derived from other animals, such as lard from pigs, or even
from plant sources.

The composition of the fatty acids is typically as follows: (Bitman, 1976)

Saturated fatty acids:

Palmitic acid (C16:0): 26%

Stearic acid (C18:0): 14%

Myristic acid (C14:0): 3%

Monounsaturated fatty acids:

Oleic acid (C18-1, ω-9): 47%

Palmitoleic acid (C16:1): 3%

Polyunsaturated fatty acids:

Linoleic acid: 3%

Linolenic acid: 1%

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 1.2. Statement of the Problem

The majority of the raw materials used to make soap in our country are imported. The
manufacturing of soap requires a lot of expensive synthetic ingredients and essential oils. For
soap production to be as inexpensive as possible and substitute import, domestic raw
materials must be used.

Animal tallow is an inexpensive and readily available domestic raw material used in our
environment to make soap due to its chemical similarity to oils. According to most
definitions, animal tallow fats are a byproduct of the meat industry. Animal fat is sometimes
consumed as food, however doing so raises the risk of heart attacks and atherosclerosis. It
also contains the acids myristic, palmitic, stearic, oleic, and linoleic, which are used to make
soap.

In this project, the plan will be the production of RBD Tallow to serve as a raw material for
soap production.

1.3. Objectives

1.3.1. General Objective

The main objective of this project is production RBD Tallow.

1.3.2. Specific Objectives

 To render animal fat into tallow.

 To bleach tallow.
 To deodorize tallow.
 To measure the iodine value of RBD Tallow.
 To measure the saponification value of RBD Tallow.
 To measure the titer of RBD Tallow.

1.4. Significance of the Study

Since tallow is a byproduct of meat processing industry producing soap from these raw
materials would help by decreasing imports of raw materials. Additionally, it brings in an
additional income for the industries processing meat.

The result of this study would be used as a base line information for possible future studies.

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 1.5. Scope of the Study

The scope of this project is production of RBD Tallow and characterizing the produced
tallow by fulfilling the above general and specific objectives.

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 CHAPTER TWO

2. Literature Review

2.1. Historical Background

Tallow is primarily derived from rendered beef tissue but can contain other animal fats as
well. In terms of total volume and economic value, tallow is one of the most important animal
fats. The term ‘inedible’ does not define any specific grade or specification other than that the
rendering or processing was not conducted under food regulatory supervision. Tallow is
accompanied by many grades, specifications, and criteria depending on its end use. Titer is a
basic specification requiring solidification above 40 °C (104 °F) after saponification. In
contrast, greases solidify below this temperature. Fat quality is determined by hardness, color,
moisture, impurities, stability, and free fatty acid (FFA) content. These specifications place
an emphasis on titer and FFA content in determining grade and value. For soap production,
‘hard fats’ or fats of high titer make soap of hard textures, whereas lower titer fats make
softer textured soap. Fats with higher FFA contents have a greater glycerin loss in the soap-
making process, which lowers their value. (H.W. Ockerman, 2014)

Tallow is produced and traded 365 days of the year and is used by many people on a daily
basis in one form or another.

Tallow is the rendered fat of cattle and sheep predominantly, although other animals can be
brought into the equation, such as horses, goats and other dead stock.

The predominant source of tallow comes from cattle and is a by-product of the meat industry.
At the time of slaughter for human consumption at registered abattoirs/meat-works around
the world, the carcasses are first stripped of their hides for the leather industry, whilst hooves
and horns are removed to the glue pots.

In the case of sheep, again the skins are removed once the fleece has been shorn with the
wool going to the wool spinners and the skins to the clothing/furniture and shoe industries.

Excess fat on the exterior of the carcass is removed, and once all the meat has been removed
the internal fats remain.  The hard white fats around the heart and kidneys are separated out
and after rendering separately become edible tallow

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The rest of the fats and all the bones are passed through a cracker/series of blades which
breaks them down into relatively small pieces which are then fed into very large pressure
cookers along with water. As we all know fat is lighter than water and floats on top, so the
water is drained off first.

The remaining fat and cooked meat and bones is then centrifuged to remove all the liquid
fats, with the remaining solids ultimately becoming either meat meal or meat and bone meal
after being subjected to a drying process.

The liquid fat is in fact what is then known as tallow, and dependent upon the animals that
have been slaughtered and cooked, the fats can be graded for different end uses.

All countries with a sheep or cattle population will have a rendering industry of some kind
with the end products entering their local markets or being exported.

2.2. Worldwide Tallow Production

Historically tallow was used as a lighting medium in the form of tallow dips/tapers/lanterns
as in the earliest street lighting in London. Many years ago ceremonial church candles were
made from tallow and bees wax. These days there is no tallow in them as it is too soft and
apparently smells to “high heaven”. 

However, the major cattle and sheep rearing countries such as the USA, Canada, Argentina,
Australia and New Zealand export some two million tons of tallow around the world
annually. The tallow is carried in specially designed tankers where the tanks are fitted with
low pressure steam heating coils to enable the product to be kept in its liquid form for
pumping out at destination ports.

Because of its properties and long carbon chain, tallow has a huge number of uses.

When split there are two main properties – glycerides and fatty acids, with the glycerides
being used in the pharmaceutical and explosives industries, to name a couple.

The fatty acids form the basic ingredient of soaps and cosmetics such as rouges, lipsticks etc,
with the stearic acids being used in the vulcanization of rubber and metal drawing.

Furthermore, tallow has a high protein and energy content and is used in many parts of the
world in animal feeding compounds.

Nevertheless as one door closes another one opens and in recent years tallow has been
processed to enter the biodiesel and paint industries as well as many other chemical products.

5
Overall, worldwide tallow production is around 7-7.5 million tonnes, which is a very small
percentage of the total vegetable oils and fats production of around 135 million tonnes.

However, there is one very sure thing, that as long as we all eat meat in all its forms there will
always be tallow to be used in one form or another, and of course dripping is still the finest
frying agent for FISH and CHIPS. (Peter Cormack, 2015)

2.3. Tallow Production Africa

Thera are few countries in Africa that produce tallow for example, South Africa

In 2019, South Africa exported tallow fat valued at 4.18m USD, a surge of 17.91% from
2018's total tallow fat export of 3.545m USD. The yearly increase in value of South Africa
tallow fat between 2017 to 2018 was -14.64 pc.

The annual/yearly variation in the amount of South Africa's tallow fat exports between 2017
and 2019 was -89.83% compared to a variation of -90.558% in the period between 2018 and
2019.

South Africa's portion of the world's total tallow fat's exports in 2019 was less than 1%.
South Africa holds position 35 in world exports of tallow fat.

2.4. Uses of Tallow

Tallow is considered a by-product of animals in modern times, but many people in history
traditionally used tallow in almost every aspect of daily life as a matter of survival as it was
widely available: like primitive cultures, the colonists, settlers, and pioneers. Because of its
properties and long carbon chain, tallow has a huge number of uses.

When split there are two main properties – glycerides and fatty acids, with the glycerides
being used in the pharmaceutical and explosives industries, to name a couple.

The fatty acids form the basic ingredient of soaps and cosmetics such as rouges, lipsticks etc,
with the stearic acids being used in the vulcanization of rubber and metal drawing.

2.5. Raw Materials

Tallow is primarily derived from rendered animal fat but can contain other animal fats as
well. Rendering fat is the process of using raw fat (beef and pork in this recipe) and making it
shelf stable by evaporating the moisture (water) which would otherwise limit the shelf life.

6
Water is one of the components that a bacterium needs to survive and multiply, so by
removing the water, making it safer to store. (Schoberle, 2018)

The name of the final product varies depending on the animal fat used.

The products being, lard from pork fat, tallow from beef or lamb fat, schmaltz from chicken
or goose fat, and ghee from butter fat.

Despite all their different names – the process is the same no matter what fat that will be
used.

Basically, to render fat, it will be melted and heated at a low temperature until all proteins
solidify and any water evaporates. It will then be filtered, separating the solids from the liquid
fat. Once cooled, the product will result with clean pure fat.

Toxins such as antibiotics that are fed to intensively farmed animals accumulate in their fat
stores, so it’s recommended to source the fat from healthy, free range and pastured animals.
(Hogbin, 2015)

2.6. Process Technology

In order to become suitable for human consumption, animal fats require processing. After
rendering of animal fats, bleaching and deodorization are the two most important processes.

2.6.1. Rendering Process

Fats are produced by a variety of processes, generally referred to as rendering. Fatty tissues
from both beef and pork are composed of essentially three components, which are: water,
protein and fat. It is the purpose of any rendering system to obtain as complete a separation as
feasible of these materials. In most cases, the fatty tissues are cooked and the fat is released
by temperature and cell rupture. In alternative process, the temperature is kept low and the fat
is released principally through mechanical rupture of the cells. (Sharma & Goswami, 2013)

Thus, the term “rendering of fat” is the thermal processing operation that breaks down the
cellular structures to release triacylglycerols from animal by-products and underutilized fish
species. The fat can be obtained from any of the following methods: (Sharma & Goswami,
2013)

a. Dry Rendering
b. Wet Rendering
c. Low Temperature Wet Rendering

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Dry Rendering: A dry renderer is made up of horizontal stem jacket with two or three
stirrers keeping the raw material continuously under motion for uniform heat distribution to
avoid charring. The steam remains in the outer jacket and does not come in direct contact
with raw material or charge which is cooked at 75psi for 3-4 hrs. in its own moisture. There is
no loss of nutrients in this. The resultant material called “cracklings” is taken out. The
cracklings should be gritty, fibrous and non-slippery. It still contains lot of fat, thus, fat is
removed to 5% in order to economize the labor and to increase the keeping quality of
material. Removal of fat is done from cracklings inside the centrifugal expeller and fat
settling tank. Long bones from settling tank are sent to digester. Dried and nearly fat free
cracklings are ground to recover meat meal. A cyclone and sacking unit allows direct filling
of bags. Lard and almost all of the inedible tallow is produced by dry rendering. (Sharma &
Goswami, 2013)

The advantage of this method is that yield is nearly 20% higher.

Wet Rendering: This is generally vertical type equipment in which steam directly comes in
direct contact with raw material or charge. The material is cooked at 40psi for 4-8 hrs. After
processing, the tankage or slush is allowed to settle for 2 hrs. These greasy or fatty material
which floats on top is removed first, followed by water and finally by the tankage with
digested meat and bones. The bones are sent to bone digester. (Sharma & Goswami, 2013)

The advantage of this method is that the recovery of fat is better.

Low temperature wet rendering: This system uses heating, separation and cooling on a
continuous basis and is regarded as an ideal purpose. The process involves mincing of the
material, melting by live steam injection at 90 degrees Celsius, continuous separation of
solids from liquid fats in a decanter centrifuge; further heating; centrifugation to remove the
fines and cooling in plate heat exchanger to below solidification point. (Sharma & Goswami,
2013)

2.6.2. Bleaching Process

It is a very important step in oil and fat processing. Crude oils often contain pigments that
produce undesirable colors (carotenoids, gossypol, etc.) or promote lipid oxidation
(chlorophyll). In early days the process was thought to remove only colored pigments, but
more modern schools of thought consider the process to be much more than this. Bleaching
reduces the color of fat or oil and it is achieved by adsorbing the colorants on bleaching earth

8
and/or charcoal or by chemical reactions involving their oxidation or reduction. (Sharma &
Goswami, 2013)

Various bleaching options have been explored to reduce color of tallow required for high
value toilet soaps. Of these options many oxidizing agents, reducing agents and halogen
compounds have been investigated for use in the bleaching process but have unsatisfactorily
produced poor results when used on their own and have suffered negatively from acceptance
in the commercial. Oxidizing agents commonly used include calcium and sodium hypo
chlorites and hydrogen. However, for hypochlorite type oxidizing agents, the bleaching
action is slow particularly when it is not enhanced by catalytic activity since fat matter is by
nature hydrophobic. This makes hypochlorite agents less favorable for commercial
applications. (Chakawa, Nkala, Hlabangana, & Muzenda, 2019)

The bleaching processes that will be employed will use Calcium Sulphate as a bleaching
agent. (Chakawa, Nkala, Hlabangana, & Muzenda, 2019)

2.6.3. Deodorizing Process

It is an important step because tallow, if not deodorized, contain substances contributing to

undesirable flavor and odor and these substances must be removed. This can be achieved by a
technique known as steam distillation under reduced pressure which is designed to remove
unacceptable odors and flavors form oils and fats. (Sharma & Goswami, 2013) An alternative
to steam distillation is the use of nitrogen stream at 180 °C and 0.8 bar vacuum . (Aireza,
Heshmati, & Hamedi, 2009)

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 CHAPTER THREE

3. Materials and Methods

3.1. Raw Material Collection, Transportation, Sample Preparation and

Storage

The raw material which is animal fat will be collected from local slaughter houses also
known as ‘Kera’ and also from households and restaurants by the use of different collection
points.

The animal fat collected will be transported through tanker or container/vat trucks to the
processing site.

The sample will be prepared by random choosing of sample from the transported animal fats.

The animal fats will be stored in a closed, air proof, and dry place to prevent hydrolysis and
oxidation of the animal fat.

3.2. Processing Methods

The processing methods, as described in the literature review, are the rendering of animal fat
into tallow, then the bleaching of the tallow and finally the deodorizing of tallow.

The specific methods that will be used are the mid temperature (60) dry rendering, bleaching
with Calcium Sulphate and the deodorization by steam distillation.

3.3. Methods of Analysis

The analytical methods described below will be used to control the processing steps and to
maintain the constant check on product quality.

Free fatty acid: Free fatty acid is expressed as percentage of free oleic acid of total sample
weight. All fat contains some free carboxylic acids, but these will be removed by the refining
process. The level of these free fatty acids will be measured continuously to check the
refining efficiency. The fat will be mixed with alcohol (in which the carboxylic acids are
soluble but the fat is insoluble) and the alcohol layer will be removed and titrated with
sodium hydroxide. Indicator that will be used in this will be phenolphthalein. The amount of

10
FFA in tallow is an indication of the degree of spoilage that has taken place. Generally, the
FFA content should not be more than 2%. (Sharma & Goswami, 2013)

Iodine number: It indicates the degree of unsaturation i.e., the number of double bonds
present in the length of the chain. The iodine value is low for animal fats and high for
vegetable oils. The higher the iodine value, the lower becomes the melting point. In this
manner, the presence of pig fats would be detected in tallow allegedly derived from beef
sources. Lard-55-65; Rendered Pork fat-60-72; Premier Jus-36-47; Tallow-40-53. (Sharma &
Goswami, 2013)

Peroxide test: This test will be used to determine the rancidity of tallow. If the peroxide
value is low, this normally suggests that the tallow has not become rancid and will have good
stability. Fresh fats have a peroxide value of 1-2, whereas rancid fats have a peroxide value of
15- 20. Rancidity is caused by oxidation and hydrolysis. (Sharma & Goswami, 2013)

Smoke point: It is the temperature to which the fat may be heated before it begins to smoke.
It has direct relationship with FFA. Tallow with FFA of 0.2% has smoke point of 225
degrees, Tallow with FFA of 1.0% has smoke point of 145 degrees and tallow with FFA of
5.0% has smoke point of 120 degrees. Lard has smoke point of 121-218 degrees. (Sharma &
Goswami, 2013)

Saponification value: It represents the number of milligrams of potassium hydroxide or

sodium hydroxide required to saponify 1g of fat under the conditions specified. It is a
measure of the average molecular weight (or chain length) of all the fatty acids present. As
most of the mass of a fat/tri-ester is in the 3 fatty acids, it allows for comparison of the
average fatty acid chain length. The long chain fatty acids found in fats have low
saponification value because they have a relatively fewer number of carboxylic functional
groups per unit mass of the fat as compared to short chain fatty acids. Lard- 192-203 mg
KOH/g of fat, Tallow-190-202 mg KOH/g of fat. (Sharma & Goswami, 2013)

Refractive index: It indicates the purity and identity of substance. Lard-1.448-1.460,

Rendered Pork Fat-1.448-1.461, Premier Jus-1.448- 1.460, Tallow- 1.448-1.460. (Sharma &
Goswami, 2013)

Melting point: The melting point of a solid is the temperature at which it changes state from
solid to liquid. At the melting point the solid and liquid phase exists in equilibrium. Back Fat:
30-40 degrees, Leaf Fat: 43-48 degrees, Mixed fat: 36-45 degree. (Sharma & Goswami,
2013)

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Moisture, impurities and unsaponifiable (MIU): Pure fat is virtually free of moisture.
Water in tallow is undesirable as it acts a medium for the growth of fat-splitting bacteria and
the action of fat- splitting enzymes. Level around 0.2% is desirable. If Polyethylene (oil-
soluble impurity) is present in the fat to be used for the manufacture of soap, then it is seen as
black specks in the soap in the settling and filtration process. Unsaponifiable matter is the
material in tallow that cannot be converted into soap by the use of an alkali. Small quantities
occur naturally in a fat. Cholesterol is naturally occurring unsaponifiable fat. Lard-10 g/kg,
Rendered Pork fat-12 g/kg Premier Jus-10 g/kg, Tallow-12 g/kg. (Sharma & Goswami, 2013)

12
 CHAPTER FOUR

4. Suggested Process Technology for Production of RBD Tallow

4.1. Process Technology of RBD Tallow

Figure 1: Process flow diagram of plant

4.2. Material and Energy Balance on Major Unit Iperations

4.2.1. Material Balance

4.2.1.1. Material Balance on the Renderer

Figure 2: Material balance block diagram of the renderer

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 Assumptions: 100 kg /hr of feed

Input mass = Output mass

Accumulation = 0 kg (assuming no losses other than the separation of solids and

vaporization of volatile compounds)

During rendering, there is loss of 10% of the input mass due to the separation of
solids, resulting in cracklings and the vaporization of volatile compounds present.

W 1=¿ Initial Animal Fat = 100 kg

W 2=¿ Rendered Animal Fat = 10 0 kg

X 2=¿ Cracklings and Volatile Compounds Content = 0.1

X 1=¿ Rendered Tallow Content = 0. 9

Calculation:

W 1=(W 2∗X 1)+(W 2∗X 2)

100 kg=( 100∗0.9 ) +(100∗0.1)

100 kg=90 kg+ 10 kg

4.2.1.2. Material Balance on the Bleacher

Figure 3: Material Balance block diagram of the mechanical Screw Press

Assumptions: 100 kg of feed

Input mass = Output mass

Accumulation = 0 kg (assuming no losses other than the absorption of impurities by

the bleaching agent)

14
 During bleaching, there is loss of 1% of the input mass due to the absorption of
impurities by the bleaching agent used.

X 1=¿ Rendered Tallow Content = 0.89

X 2=¿Calcium Sulphate = 0.11

W 1=¿ Initial Animal Fat = 90 kg

W 2=¿ Calcium Sulphate = 10kg

Calculation:

W 1+W 3=( W 2∗X 1 )+(W 2∗X 2)

90 kg +10 kg=( 100∗0. 8 9 )+(100∗0.11)

100 kg=8 9 kg+ 11 kg

4.2.1.3. Material Balance on the Deodorizer

Assumptions: 100 kg of feed

Input mass = Output mass

Accumulation = 0 kg (assuming no losses other than the vaporization of odorous

substances)

During bleaching, there is loss of 1% of the input mass due to vaporization of odorous
substances under very high temperature.

W 1=¿ Rendered and Bleached Tallow = 100 kg

W 2=¿ RBD Tallow = 99.5kg

W 3=¿Volatilized Odorous Substances = 0.5kg

Calculation:

15
 W 1=W 2+W 3

100 kg=99.5 kg+ 0.5 kg

4.2.2. Energy Balance

Recall the general balance equation that was derived for any system property, the law of
conservation of energy states that energy is neither created nor destroyed, but it can change
from one form to another.

Ein−Eout=Eaccumulated
Assuming accumulation of energy neglected for steady state system.

Ein−Eout=0

In our system potential and kinetic energy terms are negligible

∆ H =Q – Ws

Q=∆ H +Ws

4.2.2.1. Energy Balance on the Renderer

Assumptions
o
The rendering process happens at 60 C.

Ws = 8.5 kW

∆H = Hout - Hin

∆ H =¿

Cp, tallow = 2.775 kJ /kg

M (mass flow rate) = 1000 kg /day

Working hour = 8hr/day

Calculation

1000∗2. 755∗(60−25)
∆ H=
28800

∆ H =3 .3 4 8 kW

16
 Q=∆ H +Ws

Q=3.348+ 8.5

Q=1 1.848 kW

4.2.2.2. Energy Balance on the Bleacher

o
The rendering process happens at 40 C.

Ws = 8.5 kW

∆H = Hout - Hin

∆ H =¿

Cp, tallow = 2.775 kJ /kg

M (mass flow rate) = 1000 kg /day

Working hour = 8hr/day

Calculation

1000∗2. 755∗(4 0−25)

∆ H=
28800

∆ H =1.43 5 kW

Q=∆ H +Ws

Q=1.435+ 8.5

Q=9.935 kW

4.2.2.3. Energy Balance on the Deodorizer

o
The rendering process happens at 160 C.

Mechanical agitation is not required here. Q = ∆H

Working hour = 8hr/day

∆H = m [ ∫ 𝑐𝑝𝑑𝑡]

Q=∆ H

1000∗2.755∗(16 0−25)
∆ H=
28800

17
 Q=∆ H=12.914 kW

4.3. Economic Evaluation of the Plant

4.3.1. Plant Capacity

4.3.1.1. Plant Location

The geographical location of the plant has a strong influence on the success or failure of the
plant. It has a crucial effect on the profitability of a project, and the scope for future
expansion. In order to make the design project realistic, the aspect of site selection must be
given consideration. By considering the following major constraints, the sub-city of Koye
Fecha, in the city Addis Ababa was selected as a suitable location for the plant. The area of
land is 1500 square meters. Factors that must be considered in site selection are as follows;

1. Raw Material

The main raw material for the production of RBD Tallow is animal fat. The source of raw
material 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 allowed considerable reduction in transportation and storage charges.
The city of Addis Ababa was selected as a location for this plant since it is the largest city in
Ethiopia and its people are higher consumer of meat products. There are many butcher hoses
and a very large slaughter house (Kera) in Addis Ababa, so that enough amount of animal fat
will be collected for the plant.

2. Market

The location of markets or intermediate distribution centers affects the cost of product
distribution and the time required for shipping. The major markets for the product, RBD
Tallow, are the local soap manufacturing industries. 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 the major final products. Multiple soap manufacturing industries
are located in and near Addis Ababa (Mojo and Dukem).

3. Utilities

Power and steam are required in the plant, 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

18
plant site. In the plant steam is required by the boiler so furnace oil or natural gas required
operating the boiler.

4. Climate

This is considered a very important factor when choosing a location for the plant. Generally,
adverse climate conditions at a plant site will increase cost. Addis Ababa has two major
seasons (dry and rainy seasons) which is common to all the possible plant location. This
factor thus favors the possible plant location.

5. 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 rates restriction on number of
hours worked per week, competing industries that can cause dissatisfaction or high turnover
rates among the workers racial problem and variations in the skill and intelligence of the
workers.

6. 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 the
plant site. In fact, zoning difficulties can often be much more important in terms of cost and
time delays than many of the factors discussed in the preceding sections.

4.3.1.2. Production Plan

A factory with a daily capacity of 1000 kg is envisioned in this study. 275 days a year will
see the plant in use. Sundays and federal holidays that amount to 65 days a year, are
recognized as plant holidays. Additional 25 days are allocated for maintenance and repair
work as well as for a contingency of unplanned job stoppage. If the factory produces for the
aforementioned number of working days, it will produce roughly 275 tons yearly.

4.3.2. Equipment and Installation cost

Table 1: Equipment and Their Cost

N Equipment Unit Cost (In USD)

o

1 Hopper 1 440,000
19
 2 Grinder 1 165,000

3 Heating & Agitating Tank/Vat 2 2,000

4 Mechanical Filter Press 1 2,800

5 Filter System 2 3,000

6 Steam Distiller 1 11,000

7 Boiler 1 3,000

8 Storage Vessel 1 5,000

9 Trucks with Vats 1 45,000

10 Freight, Insurance, Charges, Inland Transport, etc. - 7,190

= Total Cost of Machinery and Equipment - 71,090

4.3.3. Fixed Capital Investment Estimation

From the above table, total equipment cost is $71,090

Direct cost = Purchased Equipment Cost + Purchased Equipment Installation +
Instrumentation and Controls + Piping + Electrical Installation + Building including services
+ Yard improvement + Service facilities + Land

1. Purchased Equipment Cost (PE) = 54 * 71,090

= 3,838,860 ETB

= 3,839,000 ETB

2. Equipment installation (including insulation and painting) is 50% of equipment cost

= 0.5 * 3,839,000

= 1,919,500 ETB

3. Instrumentation and controls installed, taking 25% of PE

20
 = 0.25 * 2,839,000

= 959,750 ETB

4. Piping installed, taking 65% of PE

= 0.65 * 4,533,000

= 2,495,350 birr

5. Electrical installed, taking 30 % of PE

= 0.3 * 4,533,000

= 1,151,700 birr

6. Building, process and auxiliary, taking 50% of PE

= 0.5 * 4,533,000

= 1,919,500 birr

7. Service, facilities and yard improvement, taking 75% of PE

= 0.75 * 4,533,000

= 2,879,250 birr

8. Land purchase cost estimation

= 5,000,000 birr

Total Direct Cost = 20,164,050 birr

Direct cost = 70 – 85 % FCI, taking 75%

FCI = Direct cost/0.75

= 20,164,050 /0.75

= 26,885,400 birr

21
 4.3.4. Total Production Cost Estimation

4.3.4.1. Annual Requirement and Cost of Raw Materials

Table 2:Annual requirement and price of raw materials

No Raw Material Yearly Quantity Price/ unit Total Price

(in Birr) (in Birr)

1 Animal Fat 308 tons 30,000/ton 9,240,000.00

2 Calcium Sulphate 28.05 tons 34,560/ton 969,408.00

3 Diesel 2,592 Liter 67.3/Liter 174,441.60

Total Cost = 10,383,849.60 Birr

4.3.4.2. Utilities Requirement at Full Capacity

Table 3: Utilities required and their cost

No Item Annual Cost/ Unit Cost

Requirement (in Birr) (in Birr)

1 Electricity 100,000 KWH 0.928/KWH 92,800

2 Water 1000 Quintal 650/Quintal 650,000

Total Cost = 742,800 Birr

22
 4.3.4.3. Human Resource and Training Requirement
Table 4: Human resource and Training

No Description No Monthly Annual Expenditure

Salary/Wages

Production

1 Plant Manager (Chemical 1 25,000 300,000

Engineer)

2 Production Supervisor 1 14,000 168,000

3 Operators 4 8,000 384,000

4 Labor workers 15 4,000 720,000

Administration

5 Human Resource Officer 1 14,000 168,000

6 Personnel Officer Accountant 1 14,000 168,000

7 Salesman 3 7,000 252,000

8 Cashier 1 6,000 72,000

9 Lab Technicians 3 6,000 216,000

10 Security 5 4,000 240,000

11 Training 50 1000 50,000

Total Cost = 2,738,000 Birr

23
 4.3.4.4. Total Operation Cost Estimation
Table 5: Total production cost estimation

Annual Utility 742,800

Annual Raw Material Cost 10,383,849.60

Salary & Training 2,738,000

Total Working Capital 13,864,649.60

Total Investment Cost = Total Fixed Investment Cost + Total Working Capital

= 26,885,400 + 13,864,649.6

= 40,750,049.60 Birr

4.3.5. Financial Evaluation

4.3.5.1. Assumptions
Table 6: Construction and finance

Construction period 1 year

Source of finance Loan

Bank interest rate 18%

Spare Parts, Repair & Maintenance 1% of fixed investment

Table 7: Depreciation

Building 5%

Machinery and equipment 10%

Office furniture 20%

4.3.5.2. Annual Net Return

Gross Profit = Total Revenue – Total Working Capital

24
Total Revenue = Annual Production (in kg) * Sell price/kg

= 275,000 kg * 100 ETB = 27,500,000 ETB

Gross Profit = 27,500,000 - 13,864,649.60 = 13,635,350 Birr

4.3.5.3. Net Profit

Depreciation = (0.05 * 4,000,000) + (0.1 * 3,839,000) + (0.2 * 600,000)

Depreciation = 703,900 Birr

Income Tax = 0.35 * (Gross Profit - Depreciation)

Income Tax = 4,526,007.5 Birr

Net Profit = Gross Profit - Depreciation - Income Tax

Net Profit = 8,405,442.5 Birr

4.3.5.4. Net Return

Net Return = Net Profit + Depreciation

Net Return = 9,109,342.5 Birr

4.3.5.5. Return on Investment

ROI = (Net Profit)/ (Total Investment cost)

= (8,405,442.5 / 40,750,049.60) * 1 0 0 %

ROI = 20.62%

4.3.5.6. Cash Flow

Assuming that the plant will have yearly maintenance, with a maintenance cost equaling that
of 1% of fixed cost.

Maintenance Cost = 0.01 * 26,885,400 = 268,854 Birr

The cash flow statement, for the next 10 years, will result in the following.

25
Figure 4: Cash Flow for ten years
4.3.5.7. Net Present Value

NPV = - CF * 1 /(1+r)^-2 ((CFprofit - CF maintenance) * (+ 1/(1+r)1 + 1/(1+r)2 + 1/(1+r)3+

1/(1+r)4 + 1/(1+r)5 + 1/(1+r)6 + 1/(1+r)7 + 1/(1+r)8 + 1/(1+r)9 + 1/(1+r)10) – CFfurniture *
(1/(1+r)^6)

NPV = -31,724,772 + 36,565,421.89 – 222,258.92

NPV = 4,618,390.97 Birr

Since the NPV >> 0 the project is accepted.

4.3.5.8. Profitability Index

PI = Cash Flow in / Cash Flow out

PI = 37,773,638.32 / (31,724,772 + 1,208,216.43 + 222,258.92)

PI = 1.14

4.3.5.9. Breakeven Analysis

The breakeven point of the projects is given by the formula:

Total Revenue = Total Cost

Number of Sales in kg × Price per kg = Fixed Capital Investment + Working Capital

Number of Sales in kg needed to break even = (26,885,400 + 13,864,649.6) / 100 per kg

Unit Sales in kg needed to break even = 407,500.496 kg

Break Even Analysis in Production Capacity = (101,325.8 / 84,000) x 100 = 148.18%

26
 4.3.5.10. Payback Period

PP = Total investment cost / Net return

PP = 40,750,049.60 / 9,109,342.5

PP = 4.47 years

27
 CHAPTER FIVE

5. Conclusion and Recommendation

5.1. Conclusion

For this project, RBD Tallow will be produced. The major raw materials are animal fat and
Calcium Sulphate. The different physicochemical properties, such as pH value, moisture
content, iodine number, smoke point, saponification value and so on, of the product will be
tested and recorded. The production has three major unit operations: rendering, bleaching and
deodorizing. According to suggested process technology, a preliminary economic evaluation
of a production plant was made. The plant has a production capacity of 7500 tons per annum.
The project is financially viable with a net profit of 8,405,442.5 Birr, a rate of return on
investment (ROI) of 20.62%, a Net Present Value of 4,618,390.97 Birr, a profitability index
of 1.14 and a payback period of 4.47.

5.2. Recommendation

Despite the technical feasibility from an economic point of view, the construction of the plant
as it is not recommended due to the low profitability index a long, relatively, payback period.
If the plant is found necessary to be constructed and to start production, it is recommended to
increase the capacity of the production to about 250% to 300% and increase the price of the
product by 20%, to maximize the profit index and minimize the payback period, while still
staying in business. (Bhuiyan & Khandaker , 2018)

28
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