3rd YEAR INTEGRATED PROJECT

(CHEMICAL ENGINEERING PROGRAM)

SEMESTER II 2016/2017

PRODUCTION OF VINYL ACETATE

PRELIM REPORT II

LECTURERS:
KKKR 3694 – DR. ROSIAH BINTI ROHANI
KKKR 3663 – PROF. MADYA NOORHISHAM BIN TAN KOFLI
KKKR 3644 – DR. NUR TANTIYANI BINTI ALI OTHMAN
DR. SHUHAIDA BINTI HARUN
KKKR 3664 - DR. YULIANA BINTI YUHANA
PROF. DR. SITI KARTOM BINTI KAMARUDDIN
KKKR 3684 – DR. NORLIZA BINTI ABD RAHMAN
DR. PEER MOHAMED

GROUP : KK6

MEMBERS :NEE KAH POH (A147812)

NUR ATIQAH BINTI ALI (A144518)

PETTYMILONNA ANAK MICHAEL (A148348)

KAUTSAR BINTI TABRI (A148256)

FARAH SYAFIQAH BINTI ABDUL KALAM (A151086)

 CHAPTER II

ECONOMIC ISSUES

2.1 INTRODUCTION
Before starting up the plant, the first thing we have to consider is the economic issue of vinyl
acetate. The analysis of economic issue is based on the production and consumption of vinyl
acetate in the worldwide. The price and future market of vinyl acetate will discussed further
in this chapter.

2.2 CONSUMPTION OF VINYL ACETATE

Overall growth in vinyl acetate consumption during from 2015 to 2020 will be driven by
demand in China and the United States. Vinyl acetate monomer (VAM) consumption in China
is forecast to increase at about 5% per year during 2015 to 2020, while the US forecast is for
2.5% average annual growth. (IHS, 2016)

Asia Pacific was the largest consuming region and accounted for approximately 56% of
the total market volume in 2014. Increasing construction spending coupled with growing
automotive production in emerging markets of China and India is expected to drive the
regional market. (Tecnon, 2015)

Global Consumption of Vinyl Acetate By

Region in 2014
1% 3%
17% Asia
America
56% West Europe
23%
East Europe

Figure 2.1 Global Consumption of Vinyl Acetate By Region in 2014

Source: Tecnon, 2015
2.3 SUPPLY AND DEMAND OF VINYL ACETATE

Global VAM market demand was 5,880 kilo tons in 2013 and is expected to reach 7,934.2
kilo tons by 2020, growing at a CAGR of 4.4% from 2014 to 2020. Global supply for
VAM was around 7,300 kilo tons in 2013 and is expected to grow at a CAGR of 1.1% for
the next five years. (Lyondellbasell, 2016)

Graph of Supply vs. Demand

10000
9000
8000
7000
Kilotons/year

6000
5000
Supply
4000
3000 Demand
2000
1000
0
2013 2014 2015 2016 2017 2018 2019 2020
Year

Figure 2.2 Graph of global supply and demand of vinyl acetate against year
Source: Lyondellbasell, 2016

Demand of vinyl acetate in year 2020 : 8,800,000 tons

Percentage of Asia region’s consumption : 56%

We had decided to design a plant which caters to 5% of the Asia region’s consumption. The
plant capacity was decided after considering the demand of vinyl acetate in Asia and also the
production rate of vinyl acetate in Shanxi Yanchang Group located in China with a capacity of
300,000 tons per year. This plant had produced about 6% of vinyl acetate for consumption in
Asia region (Tecnon, 2015).

Thus, the capacity of our plant will be,

8,800,000 tons/year x 56% x 5% = 246,400 tons/year
2.4 LIST OF COMPANIES PRODUCING VINYL ACETATE
China Great Wall Chemical in China has the highest plant capacity which is 450 kilo tons/yr
followed by Changdai in Singapore with 350 kilotonnes/yr. The main suppliers of ethylbenzene
around in Asia are shown in Table 2.1.

TABLE 2.1 List of Asian manufacturers and their plant capacities

Company Location Capacity
(‘000 tons/year)
China Great Wall China 450
Changdai Singapore 350
Shanxi Yanchang Group China 300
Reliance Industries India 300
Inner Mongolia Shuangxin China 200
Source: Tecnon, 2015

2.5 PRICE OF VINYL ACETATE

Figure 2.3 shows how the price of vinyl acetate varied for each month from January to
December 2014. The price of vinyl acetate is ranged from RM4510 per ton to RM7900 per ton.
The graph shows that the price of vinyl acetate fluctuated in year 2014 and had a sudden rise
to hit its highest price valued RM7900 in September 2014.

Price of Vinyl Acetate in 2014

10000
Ringgit Mlaysia (RM)

8000
6000
4000
2000
0

Month

FIGURE 2.3 Global price of vinyl acetate in year 2014

Source: ICIS, 2015
2.6 FUTURE MARKETING POTENTIAL OF VINYL ACETATE

VAM consumption in the mature markets in Western Europe and Japan is expected to increase
only very slightly or even decline slightly. In comparison, increasing construction spending
coupled with growing automotive production in emerging markets of China and India is
expected to drive the regional market. China will continue to lead the demand for vinyl acetate
at an above-average annual growth rate from 2015 to 2020, with continued strong demand in
polyvinyl acetate and polyvinyl alcohol. Demand for VAM in ethylene–vinyl acetate is also
growing well in China .In conclusion, Asia Pacific is expected to witness the highest growth
rate over the next five years. The region is expected to grow at an estimated CAGR of 4.7%
from 2014 to 2020. (IHS, 2016)