1.

0 INTRODUCTION

1.1 WHAT IS BENZENE?

Benzene (C6H6) is the simplest organic, aromatic hydrocarbon and parent compound of
numerous important aromatic compounds. Benzene is a natural component of crude oil and
is one of the most elementary petrochemicals. Benzene is a cyclic hydrocarbon with its
structure has alternating double bonds with hexagon shape. Benzene is a colourless liquid
with a characteristic odour and is primarily used in the production of polystyrene. It is highly
toxic and is a known carcinogen; exposure to it may cause leukemia. As a result, there are
strict controls on benzene emissions.

Benzene was first discovered by the English scientist Michael Faraday in 1825 in illuminating
gas. In 1834 German chemist Eilhardt Mitscherlich heated benzoic acid with lime and
produced benzene. In 1845 German chemist A.W. von Hofmann isolated benzene from coal
tar. The structure of benzene has been of interest since its discovery. German chemists
Joseph Loschmidt (in 1861) and August Kekule von Stradonitz (in 1866) independently
proposed a cyclic arrangement of six carbons with alternating single and double bonds. Kekule
subsequently modified his structural formula to one in which oscillation of the double bonds
gave two equivalent structures in rapid equilibrium. In 1931 American chemist Linus Pauling
suggested that benzene had a single structure, which was a resonance hybrid of the two
Kekule structures.

Benzene have a characteristics of modern bonding models (valence-bond and molecular

orbital theories) explain the structure and stability of benzene in terms of delocalization of six
of its electrons, where delocalization in this case refers to the attraction of an electron by all
six carbons of the ring instead of just one or two of them. This delocalization causes the
electrons to be more strongly held, making benzene more stable and less reactive than
expected for an unsaturated hydrocarbon. As a result, the hydrogenation of benzene occurs
somewhat more slowly than the hydrogenation of alkenes (other organic compounds that
contain carbon-carbon double bonds), and benzene is much more difficult to oxidize than
alkenes. Most of the reactions of benzene belong to a class called electrophilic aromatic
substitution that leave the ring itself intact but replace one of the attached hydrogens. These
reactions are versatile and widely used to prepare derivatives of benzene.

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1.2 HOW BENZENE ARE PRODUCED?

Benzene is one of the most fundamental compounds used in the manufacturing of various
plastics, resins, synthetic fibers, rubber lubricants, dyes, detergents, drugs, and pesticides.
Naturally, benzene is produced through volcanoes and forest fires. There are various
laboratories and industrial techniques existing for the preparation of benzene.

There are few processes that can be used to produce benzene. One of the processes is
catalytic reforming. Catalytic reforming involves the dehydrogenation of naphthenes to
aromatics, or the isomerization of alkylnaphthenes and it follows dehydrogenation process.
The feed for this process is naptha. Catalytic reforming is the reforming of naphtha with the
help of a catalyst which produces petrol with a high-octane rating. This process involves
dehydrogenation process which the benzene is used to separate from the other aromatic
chemical substance by distillation. Also, this process uses platinum chloride as a catalyst and
it requires the pressure ranging from 8-50 atm and temperature from 500-525⁰C.

Next, toluene hydrodealkylation is also one of the major processes used to produce benzene.
Basically, the aim of this process is to turn toluene into benzene and it is a hydrogen intensive
process where toluene is mixed with hydrogen. This chemical process usually occurs at high
temperature, at high pressure, or in the presence of a catalyst. These are predominantly
transition metals, such as platinum, chromium oxide or molybdenum.

Steam cracking is among one of the most common processes used to produce benzene.
Steam cracking is a petrochemical process in which saturated hydrocarbons are broken down
into smaller, often unsaturated, hydrocarbons. This process produced ethylene and other
alkenes from aliphatic hydrocarbons. In steam cracking, a gaseous or liquid hydrocarbon feed-
like naphtha, low pressure gas or ethane is diluted with steam and then briefly heated in a
furnace, obviously without the presence of oxygen. Pyrolysis gasoline is the by-product of
steam cracking of petroleum by products like paraffin gases, naphtha and gas oils.

Lastly, benzene can be produced by the production from coal tar. This process improved
methods of recovery and purification that coke-oven benzene has been able to withstand the
competition of petroleum-derived benzene as well as it has. Production of benzene from coal
tar involves recovering benzene from coal tar. The process includes extraction of lowest
boiling point fractions, applying of caustic soda for the removal of tar acids, crude oil distillation
and crude oil purification through hydrodealkylation.

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1.3 COMPANY’S BACKGROUND

BenChem Sdn. Bhd has a remarkable corporate presence in Malaysia which was found out
of passion that has grown significantly for over 25 years. BenChem Sdn. Bhd has been
successfully established as one of the leading suppliers of olefins and derivatives chemicals
in Malaysia. Our mission is to provide our customers with top quality of products in the most
efficient and responsible manner while sustaining maximum value to our stakeholders. Our
vision is to be the preferred world leader in olefins and derivative chemicals business and grow
our products portfolio.

Our initial products were ethylene, propylene and butadiene which each of them has their own
uses in producing broad range of human daily life products. After producing ethylene,
propylene and butadiene, the board of directors have decided to widen our business by
producing new chemical benzene which is a basic petrochemical raw material and a solvent.
Benzene has quite a lot of uses in producing daily products such as synthetic rubbers and
also dyes.

We have proposed three different locations to build our plant which are Pasir Gudang, Kerteh
and also Bintulu. After further discussion and evaluation between all the three locations, we
have decided to choose Kerteh, Terengganu for the location to build our chemical plant.
Benchem’s production plant will be located at Lot 3834, Kawasan Bukit Tengah, Kerteh,
Malaysia, 24300 Kerteh, Terengganu. Our chemical plant installed with the latest production
facilities which utilize innovational research and development technology to manufacture and
deliver high quality and efficient products. Our main targets are to be the reliable and
trustworthy partner in the chemicals production industry, to ensure the success of our
customers and to be the leading supplier of chemical producer. BenChem Sdn. Bhd put very
strong emphasis on Commitment and Integrity to achieve Corporate Excellence and to Excel
in Service Standards. We are Malaysian registered company actively involved in Engineering,
Procurement and Contracting the supply of various basic raw chemicals to many satisfied
customers around the world.

In order to successfully achieve our missions, the department of research and development
of our company are still striving to develop new innovative products. Backed by a team strong
professional, we upholds the values and strives for perfection at all times. Our decades of
expertise and experience bring forth our commitment to provide sustainable solutions based
on innovative sciences to the manufacturing and sectors with a vision to further enhancing
quality of life for all.

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1.4 PROJECT BACKGROUND

The purpose of this project is to develop a new chemical plant for the production of benzene..
This new chemical product is one of the solutions proposed as to bring our company to a
bigger market of producing raw basic chemicals. The chemical benzene is the product that we
are going to produce in our new chemical plant located in Kertih, Terengganu. Benzene have
been used widely in industrial chemical. It also has a lot of uses in different fields. Benzene is
a widely used industrial chemical and is a major part of gasoline. Some of the other uses of
Benzene include making plastics, synthetic fibers, rubber lubricants, dyes, resins, detergents,
drugs and pesticides.

Benzene is commonly used as a solvent in many industrial, commercial and research.

Manufacturers use products which contain benzene as solvents in various production stages
and it is used in manufacturing chemical and plastic products. Few examples include resins,
synthetic products such as nylon, Styrofoam and others. Benzene is also used in the
production of asphalt that is used by roofing and paving companies. Benzene is also used in
the production of tires and rubber and it is found in adhesives that are used to glue soles to
shoes. Further chemical compounds that are manufactured using Benzene include
detergents, pesticides insecticides, herbicides, and dyes.

Benzene is found in most products that is used in the printing industry. There are products
that contain this chemical and are further used specially for cleaning printing equipments which
also makes them last longer and functional. Additionally, ink and variety of painting products,
such as spray paints, sealers, lacquers and stains also contain some portion of benzene. It
keeps the paints in liquid form. Due to the its high octane number and natural availability,
Benzene is used as a fuel by a lot of people and manufacturers. Some have used it as an
gasoline additive to help burn fuel more efficiently.

However, the chemical also comes with health risks associated with exposure to benzene. It
has both several effects like headache, instability, convulsions, unconsciousness and
irritations. Depending on the exposure it can have both acute as well as chronic effects. And
this can happen when Benzene is taken in through mouth or inhaled through air or absorbed
by the skin. People are usually exposed to benzene when they fill their car with gasoline or
while using household items that contain benzene or contaminated water.

Proper and systematic planning is necessary to imposed project deadlines. In estimation, this
project requires about 6 months to fully develop the new chemical plan. Guidance from top
managers and expertise either internal or external are very important to make this project
conducted in systematic and effective ways. Thus, budget on experts’ supervision will also be
calculated for this project.

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 1.5 PROCESS AND LOCATION SELECTION METHOD

There are three process and three location that are chosen in our selection method. The best
selection will be chosen based on weighted factor scoring model that giving the highest score.

1.51 PROCESS SELECTION

Process

Selection Criteria Weightage Catalytic Toluene

Pryolysis Gasoline
Reforming Hydrodealkylation

Energy Availability 20 3 60 3 60 2 40

Power Supply 20 2 40 2 40 2 40

Water Supply 20 2 40 2 40 3 60

Water Disposal 15 3 45 2 30 2 30

Labor supply 10 2 20 1 10 1 10

Site characteristics 15 2 30 1 15 2 30

Flood and Fire Protection 20 3 60 2 40 2 40

Total 120 35 295 30 235 31 250

1.52 FACTORS INFLUENCING CHOICE OF LOCATION

Raw Material Availability

Raw material is the major substances that being used in the production of benzene. Since it
was the only raw material needed. Chemical plant that produces gasoline, kerosene, distillate
fuel oils, residual fuel oils, and lubricants are based near the site location that we choose. The
transportation at this location is at its best distance for product and raw material to be
transported out or in. Therefore, the raw material is considered as easily obtained for our
production line.

Market Accessibility

As stated, this location is a wide industrial area, so any buyer from most of the company are
familiar with this place. It made it easier for the buyer to recognized our product. Our product
also might be needed by most of company that need benzene as their raw material, these
hence reducing the transportation cost and time required by our buyers.

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 Site Characteristics

It can be considered as the most strategic location based on its community factor, which it was
located at an industrial area. It can be our motivation to build competitive behaviour by
accomplish our mission and vision in healthy way. It also might gives us a good net profit as
many supplier and company that need our company to be their supplier. Port that made
transportation easier and largely used these days were also near to our company location.

1.53 SITE SELECTION

Selection Criteria Weightage Location

Kerteh Pasir Gudang Bintulu

Raw material availability 20 3 60 2 40 3 60

Market Accessibility 20 3 60 2 40 2 40

Energy Availability 20 3 60 3 60 2 40

Cost of raw material 15 2 30 1 15 2 30

Number of competitor 10 3 30 1 10 1 10

Transportation facility 15 3 45 2 30 1 15

Power Supply 15 2 30 3 45 3 45

Water Supply 15 2 30 2 30 3 45

Water Disposal 10 3 30 2 20 3 30

Site characteristics 20 2 40 3 60 2 40

Community factor 15 3 45 2 30 2 30

Taxation and legal 20 2 40 2 40 2 40

restrictions

Flood and Fire Protection 15 3 45 3 45 2 30

Total 195 35 545 30 465 31 455

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2.0 FEASIBILITY STUDY

2.1 FEASIBILITY OF MARKET STUDY

A market study is an analysis that examines market demand for a specific product or service.
It studies the activities in a market with respect to such impacts as area, demand, and rivalry
which could possibly influence the value of the property. In our company, Benchem Sdn. Bhd
produces benzene chemical as our products in order to make plastics, resins, synthetic fibers,
rubber lubricants, dyes, detergents, drugs and pesticides. To make benzene we choose
catalytic reforming and naphtha as the raw material.

The purpose of this study is done is to see the profitability of product or services to earn back
the original investment analysis. Another reason is to see the engaging quality in the market
and to decide the strength and shortcoming of the company. This infers the demand for supply,
the cost and furthermore monetary study of beginning from the cost of the initial task to make
back the break-even point, payback period and rate of investment.

2.12 DEMAND ANALYSIS OF PRODUCT

In Malaysia there are also some companies that produce benzene itself such as the Titan
Petrochemicals (M) Sdn Bhd. Titan petrochemicals is one of the largest chemical producers
in this country. In spite of that, some other companies that also producing benzene is John
Chemicals Sdn Bhd. and Gremont Agrochem (M) Sdn. Bhd.

Production of benzene is closely related to the petrochemical industries because benzene is

used as a component in in gasoline therefore oil refineries play such an important role in
benzene production. Benzene also can be used for different of applications in the chemical
industry. The essential chemical produced from benzene are ethylbenzene, cumene,
cyclohexane, and nitrobenzene; together these four ends uses represented over 90% of the
worldwide benzene advertise in 2016.

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 Figure 1: World Consumption Demand of Benzene In 2016

In Figure 1 shows the world consumption of benzene in 2016 which indicates that China has
high demand of benzene if compare to other countries. In other Asian countries also shows
that benzene is most needed followed by middle east, South America and others. Asian
consumption will continue to dominate, provides an in-depth analysis of the global benzene
industry.

Figure 2: Benzene Supply or Demand Forecast

In Figure 2 portrays the world interest in benzene will expand by years. By 2003, the estimation
of world interest will be required to increment around 45 million tons metric ton for each yearly.

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One of the primary reasons is the expansion of the world population. Benzene is highly
demanding in much industry for instance in fundamental ingredient in laundry detergent
powder, polyesters, fire resistant, and medicinal implants.

By reviewing this study, it can be said that benzene in Malaysia still in demand and will
continue to increase by years. In addition, not only in Malaysia, but benzene demand also
maintaining high demand in other countries. Therefore, it can give more benefits to our
company as the demand will keep continuing.

2.13 MARKET STUDY ON RAW MATERIALS

In catalytic reforming process, naphtha is the raw materials needed in this process. Low
octane naphtha is used, and it will be converted into high-octane gasoline blending
components called reformates. Low-boiling naphtha (light naphtha) is another hydrocarbon
product that is likewise tradable with normal gasoline and lease condensates and is the
product assigned as naphtha, explicitly low-boiling naphtha. Low-boiling naphtha is
comparable in properties to lease condensate and natural gasoline however its light naphtha
is viewed as a refined product since it is produced by distillation refining or the process of
condensate splitting.

List of some refineries that is available in Malaysia are show below.

Naphtha Refinery Location

Petronas Penapisan Sdn Bhd Terengganu
Petronas Penapisan Sdn Bhd Melaka
Malaysia Refinery Company Sdn Bhd Sungai Udang, Melaka
Shell Refinery Company (FOM) Bhd Kuala Lumpur
Petron Malaysia Refining & Marketing Berhad Dungun, Terengganu

With the presence of a list of naphtha refineries in Malaysia, the supply of naphtha for the
production of benzene will continue and is easily available through various transport. Our
company based on Kerteh, Terengganu so that Petronas Penapisan Sdn Bhd and Petron
Malaysia Refining & Marketing Berhad became our choice as suppliers.

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 Figure 3: Lotte Chemical Titan Holdings’s Cash Margin

The graph demonstrates the development of petrochemical costs utilizing the costs on 30 Sep
2017 as the base. This gives a sign on how petrochemical product costs have moved in
respect to their naphtha feedstock cost. Naphtha costs have climbed quickly since Nov 2017,
well in ahead of most other petrochemical products. In early Feb 2018 naphtha costs have
facilitated and a larger part of the petrochemical products have gone up. This slack impact is
typical for the petrochemical industry.

Figure 4: North America Naphtha Market Volume by Application, 2012 - 2022 (Million Tons)

From Figure 4 naphtha in North America market increasing rapidly if used as chemicals,
energy/fuel or others. Light naphtha plays a major role in catalytic reforming. Major products
of the reforming process include aromatics (benzene). Developing plastics demand in
constructions, bundling and electrical and electronics is relied upon to steer market
development over the foreseeable future. Energy and fuel represented over 25% of the all-out
naphtha market revenue in 2014. Naphtha is likewise utilized in some specialty end-use

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sections as white petroleum liquid including the camp lamps and stoves. Developing a degree
in previously mentioned applications is foreseen to drive development until 2022. Furthermore,
in Malaysia naphtha price rose by 10.9% quarter-on-quarter in 2Q18, moving in tandem with
crude oil prices. Most petrochemical prices also rose during the period, but at varying levels
in comparison to naphtha.

From the study, because the rising price of naphtha will impact on benzene prices which
means it will give a little profit to the company and if the price of naphtha decreases it will
benefit the company. However, as the year's increase, benzene is still in demand, therefore,
with the rise and fall of the price of naphtha as a raw material of production of benzene will not
be affected by it.

2.14 MARKET PRICE OF THE PRODUCT

Asia's benzene costs have picked up by 6.8% since the beginning of the month and look set
to stay firm on restricted supply of brief cargoes, and strong values of upstream crude and
naphtha, industry sources In Europe and the US, issues in domestic production may likewise
prompt stronger demand for Asian benzene, further fixing supply in this district. The deficiency
prompt benzene cargoes, happening when unrefined and naphtha costs are on rising, has
elevated theoretical exchanges that have been driving up benzene costs regardless of weak
demand.

The standard value of benzene is around 1300$ - 1500$ which is in industrial grade benzene
and having purity of 93%. This cost depends on the production of benzene per ton, barring
charge for conveyances and furthermore the packaging. A different utilization of benzene will
make its cost increment quickly until the year 2020. The consumption of benzene particularly
in Asia and Eastern Europe are expanding and the export demand for this crude material will
influence the production. This will cause the cost of benzene escalate because of this specific
reason.

Furthermore, the utilization of benzene in numerous family units and everyday item likewise
cause the cost of this chemical to rise. It is normal that the cost will increment by around 70%
- 130% which will be around 2500$ - 3500$. Therefore, the profit of producing benzene can
be made from its production is quite high and it is good for the company.

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2.2 FEASIBILITY OF PROCESS STUDY

First step, the feed contains of naphta need to be hydronated which may be straight-run,
hydrocracked, thermally cracked, or catalitically cracked in order to eliminate presents of sulfur
contaminants, nitrogen, olefins, oxygenates, metals and also fractionated to remove heavy
ends. Higher temperature are needed in order to increase the hydrocracking reactions. The
temperature of the operations are 500-530 ℃. Hydrogen gas that has been recycle are added
to the feed which is hydronated naphta and then all of the substances were mixed and heated.
The presents of recycle hydrogen is to prevent the formation of carbon by decomposition of
the hydrocarbon at high temperature used. High pressure used which are 20 – 25 kg/ sq.cm
@ 5- 45 atm also minimize the potential of coke formation. After being mixed and heated, it
will enter the catalytic reactors where conversions of parafins to aromatic compounds
occur.The catalyst that is used for this process are platinum or rhenium chloride.

The products that exit from the catalytic reactor is basically made up of excess hydrogen and
hydronated naphta that has been increases its aromatics compounds. This occur because
high temperature used in the process increases the aromatics of the substances. The rich
aromatics compounds is then flow into separator which separation process will be done.
Hydrogen is being separated from liquid product and will sent back to the feed. The liquid
product is then fed into the stabilizer which light, volatile hydrocarbons are separated from the
liquid product. Debutanizer will receive the liquid product that has been stabilize. All the
aromatics compound which are benzene, toluene and xylene are extracted from the stabilize
liquid product.

Catalyst type and the severity of reaction, the cycle time and method of regeneration are
depended by the process as catalyst require regeneration after certain period of time. Different
catalytic reforming systems are contionously and take several time to generate catalyst that is
used in the process. This will affect the efficiency of the process in converting the parafins to
be aromatic compounds.

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2.3 FEASIBILITY OF TECHNOLOGY ANALYSIS STUDY

There are a few processes that can be applied to produce Benzene. The three most common
processes are catalytic reforming, hydrodealkylation of toluene and pyrolysis gasoline.
Catalytic reforming process in used in this project.

Catalytic reforming process is chosen after making a careful consideration by applying the
scoring method to determine the best process to be used. The raw material for the catalytic
reforming process is naphtha. It involved isomerization of alkenes, dehydrogenation of
cyclohexanes to aromatic hydrocarbons, isomerization and dehydrogenation of
alkylcyclopentanes and dehydrocyclization of alkanes. The equipment used for the catalytic
reforming process is fixed bed reactor. The catalyst used is platinum or rhenium chloride with
operating temperature and operating pressure of 500⁰C – 530 ⁰C and 5 atm-45 atm
respectively. The solvents that are used are diethylene glycol or sulfolane.

13
2.31 MACHINERY AND EQUIPMENT

Fixed bed reactor is a heterogeneous catalytic reactors which consist a cylindrical tube
filled with catalyst pellets with reactants flowing through the bed and being converted into
products.

Figure 5: Fixed Bed Reactor

Advantages and Disadvantages of Fixed Bed Reactor

Advantages Disadvantages
Flexible - large variation in operating Poor heat transfer with attendant poor
conditions and contact times is possible temperature control
Efficient – long residence time enables a Difficulty in regenerating or replacing spent
near complete reaction catalyst
Generally low-cost, low-maintenance
reactors

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3.0 COMPANY SETUP

3.1 ORGANIZATIONAL CHART

BENCHEM SDN BHD

General Manager

Project Manager

Nur Athirah Binti Azrai

Marketing Manager Production Manager

Financial Manager Human Resource Operation Manager
Najwa Syafiqah Bt Abd Siti Mariam Bt
Nur Qistina Bt Mohamad Surianajiha Binti Nur Hartini Azwa
Rahim Suharman
Kamarul Azman Kamarudin Binti Jamarullaili

Sales Product Quality

Manager Manager Control Accountant Hr Assistant Maintenance

Supervisor
Utility

Chemist

Research & Development

Safety
Manager

Product
Development

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 3.2 JOB DESCRIPTION

Position Description
Project Manager  To make sure that the project's goals can be
achieved
 Project manager is to plan, budget, oversee and
document all aspects of the project.
 Working with upper management to make sure
that the scope and direction of each project is
on schedule as well as other departments for
support.
 Has authority in recruitment of workers and
termination of workers' services.
Marketing Department  Monitoring all marketing processes.
 Provide guidance and ideas to organize
effective marketing events.
 Responsible for developing, implementing and
executing strategic marketing plans for an entire
organization in order to attract potential
customers and retain existing ones.
 Under this department, there are sales manager
and product manager.
Production Department  Ensure that the production is cost effective and
suitable resources are required.
 Responsible for the selection and maintenance
of equipment.
 Ensure the quality of production being
consistent.
Financial Department  Monitoring day-to-day financial operations
within the company and tracking the company’s
financial status and performances.
 Prepare the financial data, monthly and annual
reports and present the financial reports to
board members, stakeholders, executives and
clients.

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Human Resources Department
Operation Department
 Responsible for recruiting, screening,
interviewing and placing workers.
 Handle employee payroll, benefits and training.
 Under this department, there are HR executives
 Ensure the production line run smoothly and
supervise the laborers.
 Monitor the maintenance of the equipment and
production flow.

4.0 OVERVALL PLANNING

4.1 MIND MAP

Analytical
Study

Final Initial
proceeding proceeding

BENZENE

Logistics Production

Procurement

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4.2 WORK BREAKDOWN STRUCTURE (WBS)

Naphta

Raw Material Toluene

Dioleffins

Kerteh, Terengganu

Analytical Location Pasir Gudang, Johor

Study

Bintulu, Sarawak

Catalytic Reforming

Process Toluene hydrodealkylation

Raw material Pyrolysis
supply Gasoline
Initial Civil and Preheater
proceeding structural design
Fixed Bed
Land Reactor
preparation
Separator
Equipment and
machinery
Stabilizer
BENZENE

Raw Material
Extractor
Production Safety
assurances
Stripper
Quality control

Maintenance

Financing

Procurement Marketing

Administration
Lorry
Logistics Transportation
Forklift
Project
Getting License Manager
Final for production
proceeding Safety & Health Officer
Workmanship
Production
Manager
Financial
Manager

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5.0 PROJECT SCHEDULING

5.1 OVERALL SCHEDULING AT BENCHEM SDN BHD

Activity Description Predecessors Duration (month/s)

A Team development - 2
B Feasibility studies and - 4
location
C Financial B 2

D Project charter A,B 3

E Project planning C,D 3

F Law and regulations E 6

approval
G Finding customer and F 4
supplier

H Purchasing and choose a F 5

contractor
I Installing equipment H 3

J Piping and wiring I 2

K Testing equipment J 1

L Product inspection G,K 1

M Start-up operation K 2

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5.2 PROJECT SLACK

Activity Predecessor Duration Earliest Earliest Latest Latest Slack Critical

Start Finish Start Finish (LS – Path
(month/s)
(ES) (EF) (LS) (LF) ES)

2 0 2 2 4 NO
A - 2

4 0 4 0 4 Yes
B - 0

2 4 6 5 7
C B 1 No

3 4 7 4 7
D A,B 0 Yes

3 7 10 7 10
E C,D 0 Yes

6 10 16 10 16
F E 0 Yes

4 16 20 23 27
G F 7 No

5 16 21 16 21
H F 0 Yes

I 3 21 24 21 24
H 0 Yes

2 24 26 24 26
J I 0 Yes

1 26 27 26 27
K J 0 Yes

1 27 28 27 28
L G,K 0 Yes

2 28 30 28 30
M K 0 Yes

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5.3 ACTIVITY-ON-NODES (AON) NETWORK DIAGRAM

The Critical Path: B-D-E-F-H-I-J-K-L-M

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 5.4 GANTT CHART

DURATION
(HOURS) 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
ID TASK

A Team development

Feasibility studies and

B
location
Financial
C

Project charter
D

Project planning
E

Law and regulations

F
approval

Finding customer and

G supplier

Purchasing and choose

H
a contractor

I Installing equipment

Piping and wiring

J

Testing equipment
K

Product inspection
L

M Start-up operation

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6.0 PROJECT MONITORING AND CONTROLLING

6.1 INTRODUCTION

Monitoring and Controlling Project Work includes following real project performance with the
planned project management activities. It can, for the most part, be looked as a Control work
that happens at all phases of a project for example from Initiation through Closing. For little
projects, monitoring and control venture work is similarly a simple task. In any case, as you
know, Project Management is even more stringently required for huge tasks where the project
manager requires a formal exertion to monitor and control how the procedures are going. The
individual won't be by and engaged with performing project work in huge projects.

6.2 PROJECT MONITORING

6.2.1 PERFORMING REPORTING

Projects Status reports are a basic apparatus for communicating the project progress, viable
and briefly the project team and stakeholders. They report the current status of a project, costs,
risks, issues, and schedule.

Reporting by the project group including the suppliers and the expert teams will frequently give
a good sign of any issue areas and if reports give quality information and there is a culture of
receptiveness and trustworthiness project progress. This is important because of suppliers
play a major role by supplying raw material for benzene production and equipment while expert
teams are important people in ensuring the project runs smoothly.

Reports can be formed formal and casual for instance from telephone calls and chats in the
workplace to written reports. The Project Manager should look for reports that give no
deliberate sign of progress or give great impressions without any backup. For instance, reports
of "we are 80% finished" could demonstrate that the team has hit a risky 20% of the venture
that will take up 80% of the schedule.

6.2.2 CREATE A FORECASTS

Create a forecast is one of the project monitoring and controlling process. The Project
Manager together with team members should ask or discuss among them for example: what
will be the spending limit of the project on completion? What will be the end date of the project
if the project executes as it performed till now? These kinds of forecast help to perceive how
far our project is from its objectives.

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6.3 PROJECT CONTROLLING

6.3.1 PERFORMING QUALITY CONTROL

Quality control activities check the quality traits of the delivery outputs. For example, the result
of the product may meet the spending limit and schedule targets. Yet, the quality prerequisites
probably won't meet the clients' desires. For this situation, the project will be considered as
flopped also. Along these lines, performing quality control is significant. The output in
performing quality control should include this below:

 Quality control measurements

 Validated defect repair
 Updates to the quality baseline
 Recommended corrective and preventive actions
 Requested changes
 Recommended defect repair
 Updates to organizational process assets
 Validated deliverables
 Updates to the Project Management Plan

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7.0 PROJECT BUDGETING

7.1 COST ESTIMATING

WORKER SALARY

Description Number No of Salary per Total Salary

months Month (RM) (RM)
CEO 1 12 15 000 180 000
Managers 5 12 7 500 450 000
Engineers 5 12 4 250 255 000
Chemist 2 12 2 800 67 200
General workers 10 12 1 400 168 000
Total 1 120 200

RAW MATERIALS

Materials Capacity (kg/h) Price per kg Price per day Price per
year
Naphtha 835 2.70 54 108.6 19 749 639.6
Total 54 108.6 19 749 639.6

EQUIPMENT

Equipment Price (RM) Units Total price (RM)

Continous Industrial Furnace 52 000 3 156 000
Gas Separator 338 679 1 338 679
Fixed Bed Reactor 420 000 3 1 260 000
Centrifugal Pump 40 950 1 40 950
Distillation Column 355 800 1 355 800
Hydrogen Gas Compressor 4 801 1 4 801
Heat Exchanger 250 010 1 250 010
Total 2 406 240

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UTILITIES COST (PER YEAR)

Aspects Price in RM

Electricity 74 200
Water 73 000

Piping 108 050

Insurance 150 000

Maintenance 150 000

Building 600 700

Facilities 410 400

Transportation 70 000

Licence and Permit 130 000

Total 1 766 350

MANUFACTURING COST

Cost of manufacturing per year = Utilities + Labour + Raw Materials

 RM 1 766 350  RM 1 120 200  RM 19 749 639.6

 RM 22 636 189.6

CAPITAL COST

Aspects Price in RM

Estimate cost of equipment and raw materials RM 90 000 000

FIXED CAPITAL INVESTMENT

Fixed Capital Investment = Capital Cost + Investment (equipment)

 RM 90 000 000  RM 2 406 240

 RM 92 406 240

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 7.2 NET PRESENT VALUE

Packing process = 25kg/barrel

1 day = 25000kg production of benzene = 1000 barrel

1 month = 28 days operation = 700 000 kg production of ester

10 days off for maintenance of equipment/year

Aspects Total Production Total Barrel Price(RM) Total(RM)

Estimates/month 500 000kg 25 000 RM14/kg 6 800 000

Estimates/year 7 400 000kg 320 000 RM14/kg 114 600 000

Estimates 6% per annum
increment/year

List of factors that consider in NPV calculations

Fixed capital investment = RM 92 406 240

Discount rate = 6% per annum
Machine equipment = Rm 2 406 240
Raw materials = RM 19 749 639.60
Labour cost = Rm 1 120 200
Annual maintenance = RM 150 000

Discount
Year Inflow Outflow Netflow Factor NPV
0 - 146 712 215.60 -146 712 215.60 1 -156 702 215.60
1 116 600 000 74 675 265.60 42 754 734.40 0.9434 38 513 496.43
2 116 600 000 74 675 265.60 42 754 734.40 0.8899 37 225 418.14
3 116 600 000 74 675 265.60 42 754 734.40 0.8396 36 064 795.00
4 116 600 000 74 675 265.60 42 754 734.40 0.7921 34 024 445.12
5 116 600 000 74 675 265.60 42 754 734.40 0.7473 32 100 073.02
Total 24 244 012.11

NPV = 24 244 012.11

Since NPV > 1, the project can be proceeded.

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8.0 TERMINATION

Project termination is a situation when a given project supposed to be closed or finalized.

Project termination requires the management team to examine the current state of the project
work, review progress of goals and objective, evaluating the project against success criteria,
and checking the status of deliverable under a respective procedure.

The team needs to understand the criteria for success and failure thus evaluating the project
against the criteria in order to determine the reason that is relevant to the project. There are
four types of project termination which are as follows:

1. Project Extinction
 Occurs when the project activity suddenly stops, although there is still property,
equipment, materials, and personnel to disburse or reassign.
2. Termination By Integration
 The project property is simply transferred to an existing or newly created
organizational entity. With this integration, the output of the project becomes a
standard part of the operating system of the sponsoring firm, or the client.
3. Termination By Starvation
 Starvation often occur when it is impolitic to terminate a project but its budget
can be squeezed as budget always are, until it is a project in name only.
4. Termination By Addition
 Occurs when an ‘in-house’ project is successfully completed and
institutionalized as a new, formal part of the organization.

This project was terminated by addition because its goals have been achieved. Project
termination by addition is the project that will be terminated because it is a major success and
becomes a formal part of the parent organization. The product is to be terminated in the span
of 10 years.

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 Project close-up

Organization Financial Purchasing Site

Close out Charge audits Compliance Closedown

meeting documents facilities

Personal Collect Equipment

Supplier
reports receivables material
notifications
disposal

Final report Final payments

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9.0 PROJECT CHARTER FOR BENCHEM SDN BHD.

Project Overview

This project aims to develop a new chemical plant for the production of benzene. As benzene
has been known as widely used in industrial chemical, the company strives to produce top
quality benzene to be further use in variety of applications. The company believes that this
project will open the opportunities to secure a firm position in the market due to high demands
from manufacturers.

Project Approach

This project will be held in Kerteh, Terengganu, Malaysia where latest production facilities will
be installed to allow innovational research and development technology in order to obtain high
quality and efficient products. The project will be lead by Nur Athirah as project manager,
Najwa Syafiqah as marketing manager, Nur Qistina as financing manager, Siti Mariam as
production manager, Surianajiha as human resources manager, and Nur Hartini Azwa as
operation manager.

Project Objectives

 To produce and maintain high quality of benzene at an affordable price.

 To expand company’s position through new market development.
 To secure a firm position as benzene producer in the market.
Major Deliverable

 Increasing company’s credibility and public recognition

 High technology and modern equipment and machinery.
 Availability of raw material is continuous.
Constraints and assumptions.

 Technical constraint which the equipment and machines will face error or breakdown.
 Research and development department might use over budget.
 The product manufacturing team might lack of manpower.
 The duration of the project might be delayed due to uncertainties.
Risks and Feasibility

The primary risk is that high maintenance for the high facilities of production might be hard for
a newly developed plant to cater. Another risk is that the price of raw materials are not
consistent that will affect the profit gain from time to time. Other than that, the surrounding
environment will be affected due to chemical waste from the plant.

30
10.0 REFERENCES

1. Adams, J. (n.d.). Project Monitoring & Controlling | 16 Best Practices for a Successful
Project. Retrieved from https://blog.masterofproject.com/project-monitoring-
controlling-process/
2. Benzene demand to continue strong growth. (1998, November 11). Retrieved from
https://www.ogj.com/articles/print/volume-96/issue-47/in-this-
issue/petrochemicals/benzene-demand-to-continue-strong-growth.html
3. Benzene. (2017, July) Retrieved from https://ihsmarkit.com/products/benzene-
chemical-economics-handbook.html
4. Hassib, A. (2018, May 16). Project Monitoring and Control. Retrieved from
https://pmdocuments.com/project-monitoring-and-control/
5. James G. Speight Ph.D., D.Sc., in Natural Gas (Second Edition), 2019
6. Naphtha Market Analysis by Application (Chemical, Energy & Fuel) And Segment
Forecasts To 2022 (2015, March). Retrieved from
https://www.grandviewresearch.com/industry-analysis/naphtha-market/methodology
7. Naphtha surge hampers strong petrochemical price run. (2018, March 12). Retrieved
from
http://www.bursamarketplace.com/mkt/tools/research/ch=research&pg=research&ac
=383575&bb=392724
8. Project Monitoring and Control - techniques to control budget, status and planning.
(n.d.). Retrieved from https://www.stakeholdermap.com/project-management/project-
monitoring-and-control.html

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