ANALYSIS
What is the ideal size for
Fabio Dalla Giovanna, Business Development Manager, CMBITALY – TECHNOILOGY
In recent months ICIS prices of lubricating base oils have risen and have become very interesting again even for those who want to invest in used oil regeneration. The right balance between the cost of the raw material (used oil) and the price of the base oils mean that the business plan of a re-refining plant can be either attractive or unattractive for potential investors. But also, as is the case for every kind of plant, including lubricant, the CAPEX and the OPEX contribute significantly to changing the attractiveness of a re-refining investment.
Since I joined CMBITALY–TECHNOILOGY I have ascertained that an accurate study on the engineering choices and on the purchase of the main equipment can affect the profitability of a plant and its return on investment even by 15-20%, without affecting the quality of the manufactured products, maintaining that “made in Italy” has always characterised the quality of Italian manufacture.
Until a few years ago, according to the Oil & Gas mentality it was thought that the bigger a plant, the more crude oil it processes and therefore the more profitable it was. Generally speaking, this principle is always valid because fixed costs are almost equally distributed on the amount of feedstock and are obviously lower for a large size plant. But the peculiarity of the regeneration plants that distinguishes them from the plants that process crude oil is the supply of raw material: the used oil does
34 LUBE MAGAZINE NO.143 FEBRUARY 2018
not have a well of raw material that is tapped almost constantly for 20-30 years until its exhaustion, but it requires a capillary search both on national territory and abroad, as well as accurate analyses of the input parameters to verify that it is not contaminated by other wastes or substances that can damage the plants, causing fouling and corrosion.
This means that it is not always possible to erect plants of such dimensions as those that were built and operated in the years 1980 and 1990 due to shortage of raw material, but it is necessary to also make small size plants efficient and cost effective. Thirty-to-forty years ago, such plants were mainly configured for the acid-clay process since more sophisticated and expensive technologies such as solvent extraction or hydrogenation were not cost-effective for plants below a certain size.
CMBITALY– TECHNOILOGY has established a partnership with the Portuguese company
EGEO in order to first start a regeneration plant in Portugal and subsequently develop the regeneration business in other parts of the world.
These plants have been designed to be cost-effective even below 25-30,000 tons per year both in terms of capital expenditure and operating expenditure. The partnership between CMBITALY–TECHNOILOGY and EGEO is a perfect combination of operational experience, design skills, used oil collection expertise and management experience.
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