March 23, 2021 PLANT DESIGN AND ECONOMY

DEBREREHAN UNIVERSITY

INSTITUTE OF TECHNOLOGY

COLLAGE OF ENGINEERING

DEPARTMENT OF CHEMICAL ENGINEERING

COURSE TITLE: PLANT DESIGN AND ECONOMICS

COURSE COADE: ChEng 5191

PROJECT TITLE: PRELIMINARY DESIGN ON FLOUR PRODUCTION

FROM POTATO

GROUP 11
NAME ID.NO

1.Tadesse Assefa -------------------------------------------------------0427/09

2.Gedefaw Enbiale-----------------------------------------------------0171/09

3.Yshihareg Assefa ----------------------------------------------------0687/09

4.Kisanet Kebede-------------------------------------------------------0828/09

5.Tsedale Moges -------------------------------------------------------0456/09

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Advisor name:- Instructor Endayehu. H

Table of Contents
1. INTRODUCTION .................................................................................................................................................... 1

1.1. Back ground ....................................................................................................................................................... 1

1.2. Statement of the problem ................................................................................................................................... 3

1.3. Objective ............................................................................................................................................................ 3

1.3.1. Main objective ................................................................................................................................................ 3

1.3.2. Specific objective ........................................................................................................................................ 3

1.4. Significance of the project ................................................................................................................................. 4

2. LITERATURE REVIEW ......................................................................................................................................... 5

2.1. Product description and their application .......................................................................................................... 5

2.1.1. Production of potato in Ethiopia ................................................................................................................. 5

2.1.2. Distribution of potato in Ethiopia ............................................................................................................... 6
2.1.3. Consumption of potato in Ethiopia ............................................................................................................. 7
2.1.4. Availability of potato .................................................................................................................................. 8
2.1.5. Properties of potato ..................................................................................................................................... 8
2.1.6. Nutritional composition of potato ............................................................................................................... 8
2.1.7. Potato products ............................................................................................................................................ 8
2.1.8. Application of potato flour .......................................................................................................................... 9
2.2. Raw material selection ..................................................................................................................................... 10

3. PROCESS TECHNOLOGY SURVY .................................................................................................................... 10

3.1. Process description of potato flour .................................................................................................................. 10

3.2. Material and energy balance ............................................................................................................................ 13

3.2.1. Material balance ........................................................................................................................................ 13

3.2.2 Energy balance ......................................................................................................................................... 16
3.3. Equipment design and Specification................................................................................................................ 18

4. ENGINEERING ECONOMICS ............................................................................................................................ 26

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4.1. Market study and plant capacity ...................................................................................................................... 26

4.1.1. Past supply and present demand ............................................................................................................... 27

4.1.2. Demand projection ........................................................................................................................................ 28

4.2. Investment costs ............................................................................................................................................... 29

4.2.1. Capital investment ..................................................................................................................................... 29

4.2.1.Total fixed capital investment (FCI) .......................................................................................................... 31
4.2.2. Working capital ......................................................................................................................................... 32
4.2.3. Total Production Cost (TPC) .................................................................................................................... 32
4.3. Financial analysis ............................................................................................................................................. 37

4.3.1. Annual gross earning (gross profit)........................................................................................................... 37

4.3.1. Profitability ............................................................................................................................................... 38
4.3.2. Break-even analysis (BEA) ....................................................................................................................... 38
4.3.3. Pay-back Period ........................................................................................................................................ 39
4.3.4. Rate of return or Rate on investment ........................................................................................................ 40
4.3.5. Projected cash flow ................................................................................................................................... 40
4.3.6. Net present value ....................................................................................................................................... 43
5. PLANT LOCATION, PLANT LAYOUT AND ENVIRONMENT ..................................................................... 44

5.1. Plant location ................................................................................................................................................... 44

5.1.2. Plant Layout .............................................................................................................................................. 45

5.1.3. Principles of plant layout .......................................................................................................................... 45
5.1.4. Site selection ............................................................................................................................................. 46
5.2. Economic and Social benefits .......................................................................................................................... 47

5.3. Environmental considerations.......................................................................................................................... 47

6. Conclusion and Recommendation .......................................................................................................................... 48

6.1. Conclusion ....................................................................................................................................................... 48

6.2. Recommendation ............................................................................................................................................. 48

7. REFERENCE ......................................................................................................................................................... 49

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List of table
Table1.Nutritional value of potato ............................................................................................................................... 8
Table2.Inlet and outlet of feed and air........................................................................................................................ 22
Table 3.Production period .......................................................................................................................................... 26
Table 4.past supply and present demand .................................................................................................................... 27
Table 5.Fore casting ................................................................................................................................................... 28
Table 6.projected demand for the future of potato flour ............................................................................................ 28
Table 7.Purchasing equipment cost ............................................................................................................................ 30
Table8.Direct cost....................................................................................................................................................... 30
Table9.Indirect cost .................................................................................................................................................... 31
Table10.Direct production cost .................................................................................................................................. 33
Table11.Fixed charges ................................................................................................................................................ 34
Table12.General expense ........................................................................................................................................... 35
Table 13.Projected cash flow of potato flour production ........................................................................................... 41

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List of figure
Figure 1.vegetable of potato ......................................................................................................................................................... 2
Figure2.Production of potato in Ethiopia ..................................................................................................................................... 6
Figure3.Production of potato in Ethiopia ..................................................................................................................................... 7
Figure4.Potato products ................................................................................................................................................................ 9
Figure5.Flow sheet of potato flour production ........................................................................................................................... 13

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1. INTRODUCTION
1.1. Back ground
The word potato comes from Spanish patata. Solanum tuberosum is thought to originate in the Andes of South
America. (Abera & K, 2004)

Potato (Solanum tuberosum L.) popularly known as „The king of vegetables‟, has emerged as fourth most
important food crop in India after rice, wheat and maize. Indian vegetable basket is incomplete without Potato.
Because, the dry matter, edible energy and edible protein content of potato makes it nutritionally superior vegetable
as well as staple food not only in our country but also throughout the world. Now, it becomes as an essential part of
breakfast, lunch and dinner worldwide. The potatoes are processed in to a diverse range of food stuff including
chips, potato flour and dried potato. They are common source of starch, glucose and dextrin. (Jongen, 2002)

Potato (SolanumtuberosumL). is the number one non grain crop with an estimated world production of about 309
million metric tons (MMT) in 2007. It is believed that potato cultivation originated about 8,000 years ago in the
highlands of the Andes Mountains, in what is now Peru and Bolivia. In the sixteenth century, Spanish travelers
brought potato to Europe and from there, its cultivation spread to other parts of the world. According to the
International Potato center (CIP, Lima, Peru), potato is grown for food in about 100 countries, under temperate,
tropical, and subtropical climates. Although a subsistence crop, potato and potato products are of great economic
and nutritional significance Advancements in agriculture, postharvest than dling, and processing have opened
opportunities for developing and introducing new potato products with better sensory and nutritional qualities.
However, improvement in agricultural and agronomic practices to produce high-yielding, early maturing, disease-
and pest-resistant varieties suitable for and processing requires continuous efforts. potatoes sprouteasil, requiring
proper pre and postharvest handling, grading, storage, and transportation infrastructures to extend their shelf life
and quality.

As we learn more about the benefit of naturally occurring phenolic compounds, the likely contribution of potatoes,
having relatively high levels of phenolic compound chlorogenic acid, to our health is of interest. Similarly, other
potato constituents such as “resistant potato starch” (having physiological benefits) vitamin C, and lutein (found in
yellow-fleshe potatoes, and which may help to slow the onset of age-related macular degeneration of eyes) are
important to our health. Nonetheless, there are some health concerns as well, such as reports about potentially
carcinogenic acrylamide in high heat processed potato products. In this chapter, we review information related to

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production, postharvest handling and storage, consumption, physicochemical, functional, phytochemical,

nutritional, and processing aspects of potatoes and major potato products.

Potato (Solanum tuberosum L) is a nourishing food that has sustained civilizations for centuries in South America
and Europe. Potato production has significantly increased in recent years in many countries, particularly Asia
where it has become more important as a food and industrial crop. Potato processing at the village level has
considerable potential to reduce post-harvest losses and to generate income through the manufacture of value
added food products. Processed potato flour are highly versatile in manufacturing convenience foods.

(Adeleke & Odejeje, 2010)

Figure 1.vegetable of potato

Potato flour is made from potatoes, including their skins. The potatoes are cooked, skins on, then dried and ground
finely. It can be used as a thickener to some degree (though it does not thicken as well as potato starch, however)
and in some baked goods, as it retains moisture. In mid 1700s, when wheat flour was expensive and scarce, the
French peasants made flour out of potatoes and tried to make bread out of that flour. Potato flour can improve the
functional properties of several food products. It can be used in a great variety of foods. The nutritional advantage
of potato has been demonstrated in comparison with other major stables and vegetable crops in terms of the total
number of people who can be fed as a food for individual consumers. Potato flour is gluten free. It has protein
content similar to rise, but lower protein content than cornmeal or wheat flour. Potato starch can thicken a greater
amount of liquid than potato flour. Potato flour is heavier in weight than potato starch. In developed countries
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potato flour is produced commercially using sophisticated methods such as drum drying and spray drying of pre-
cooked mashed potatoes. The methods have limited application for village level processing in developing
countries. Potato flour is an excellent source of starch and most of its functional characteristics and applications
depend on its starch content. Potato flour is also a good source of protein. Flour is fine powder made from cereals
or other starch based produce. It most commonly made from wheat. Flour can also be made from potatoes.

(WWW.Cooksinfo.Comm>>.....> flour Retrieved, 2016)

1.2. Statement of the problem

Ethiopia is one of the major potato producing countries of the sub-Saharan Africa region where potato is the fastest
expanding food crop. The natural environment in Ethiopia is very suitable for year round production of potato
using rain-fed and irrigated system. The main production season for potato in Ethiopia in areas with altitude higher
than 2500m rains from June to September while the off-season slot starts in April and ends in August.

(WWW.Cooksinfo.Comm>>.....> flour Retrieved, 2016)

The principal problem in potato production that has been highly perishables and seasonal vegetable. Potato storage
is limited to a maximum period of 2-3 months, while waiting for better prices. The price of wheat is high as
compare to price of potato due to most of food products are produced from wheat.

1.3. Objective

1.3.1. Main objective

The main objective of this project will be preliminary design on flour production from potato.

1.3.2. Specific objective

The specific objectives of this project will be:

 To design the process unit operation used for potato flour plant.
 To calculate mass and energy balance of the process.
 To design equipment size.
 To financial/economic/ analysis of the potato flour.

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1.4. Significance of the project

This project will help for the design of plant, the cost analysis, equipment design, and feasibility analysis of the
project for flour production from potato. this can be used to reduce the shortage of wheat flour and to maintain high
blood pressure i.e. potato is richer in calcium and potassium, which help strength your bone and keep your blood
pressure law and increasing the availability of potato at off-seasonal by increment of shelf life of potato flour and
replace to wheat flour for bread making. The advantage of blend flour i.e. the mixture of potato flour with wheat
flour, to get the modified content of nutritional value and reduce the cost of wheat flour. Generally, the main
significance of this project is to introduce (to announce) the production techniques with preliminary design of the
plant and economic analysis for someone who has the wish to built such type of plant.

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2. LITERATURE REVIEW
2.1. Product description and their application
2.1.1. Production of potato in Ethiopia
In Ethiopia potato is a very important source of nutritious food for the different parts of the country. However, in
central highlands of Ethiopia particularly in North Shewa since the soil is predominantly vertisoils, its great
potential has not been adequately exploited. It is native to South America it has been introduced to Ethiopia in
1859 by a German Botanist called Schimper (Berga et al, 1994).

Ethiopia has good climatic and edaphic conditions for higher potato production and productivity. Compared to
cereals, potato is short duration crop that can yield up to 30-35 t/ha potato in 3-4 months in Ethiopia (Endale et al.
2008b). The natural environment in Ethiopia is very suitable for year round production of potato using rain-fed and
irrigated systems. The main production season for potato in Ethiopia in areas with altitude higher than 2500 m runs
from June to September while the off season slot starts in April and ends in August. The altitude between 1800 and
2200 m is suitable for growing seed and table potatoes in Ethiopia and 70% of the agricultural land is located at
that elevation. (Enwere, 1998)

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Figure2.Production of potato in Ethiopia

2.1.2. Distribution of potato in Ethiopia

Potato is one of the major world food crops in its ability to produce high food per unit area per unit time Ethiopia is
endowed with suitable climatic and edaphic conditions for potato production. Ethiopia is one of the major potato
producing countries of the sub-Saharan Africa region where potato is the fastest expanding food crop. Potato
production in Ethiopia has exponentially expanded from 30,000 ha about thirty years ago to 160,000 ha of land.
Potato provides huge opportunity and there are good prospects for value addition. (Enwere, 1998)

The demand for potato food products is increasing from time to time. There is a significant increase in the numbers
of urban consumers willing to diversify their potato consumption pattern including branded and packed fresh
potatoes in super markets, chips and crisps. (FAO, 2003)

The main location of potato in Ethiopia

 Holetta: approximately 40km west of A.A on the Central Plateau, is a source of potatoes for Addis Ababa
and other urban markets. The area ranges in elevation from 2000 to 3000 m.
 Awassa: is one of the largest potato producing areas of Ethiopia is situated about 260km south of Addis
Ababa in Rift Valley at 1,600 to 1,800m. The mean annual temperature is 19oc with monthly means
ranging from 18.1oc in November and December to 20.4oc in March.

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 Haremaya: located 520km east of Addis Ababa, near the Somali – Djibouti border, has an elevation of
about 1800m. (Roach, 10 june 2002)

2.1.3. Consumption of potato in Ethiopia

Potato is a major part of the diet of half a billion consumers in the developing countries. It is an important food and
cash crop in Eastern and Central Africa, playing a major role in national food security and nutrition, poverty
alleviation, income generation, and provides employment in the production, processing and marketing sub-sectors
(Lung‟aho et al., 2007).

Large scale potato processing is non-existent in Ethiopia in general and in the study areas in particular. Potato is
commonly consumed in the form of boiled and cooked meals in different traditional dishes or wat‟. Nowadays,
consuming potato chips, crisps, and roasted potato are becoming common practices especially in cities like Addis
Ababa, Bahirdar, Gonder and Debre Markos. Supermarkets started to sell potato products like chips and crisps. In
urban areas it is also usually consumed mixed with other vegetables as salad. In large cities like Addis Ababa, it is
common to see fried potatoes in hotels, restaurants and cafes. (Gebrenedhin et al., 2008).

Figure3.Production of potato in Ethiopia

With increasing production throughout the country, and inadequate storage facilities of potatoes, there occur
greater proportions of wastage. Under such circumstances, the post- harvest processing of the bulky, perishable,
fresh tubers into dehydrated potato products, helps to extend the storage life, solve the problem of storage and
serve as a means to increase the supply in off-seasons. 2.4.

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2.1.4. Availability of potato

Potatoes grow best under temperate conditions. Tubers growth and yield can be severely reduced by temperature
fluctuations outside 5-30oc. Ethiopia has possibly the highest potential for potato production of any country in
Africa. Ethiopia farmers distinguish long rains (meher), which generally occur from June to September and provide
the main agricultural season, from short rains (belg), from January to June.

Factors that affect potatoes:

 Climate
 Variety of potato
 Geographical

2.1.5. Properties of potato

Potatoes are raw, boiled, peeled, or mashed all have medicinal and healing properties. Even the water that you used
to boil them in can be used. A potato‟s skin is rich in fiber, iron, zinc, potassium, and calcium. It even contains
your B & C vitamins. When you are cooking potatoes, boil them with the skins still on but washed good. That way
you still have the benefits of these needed nutrients. Whilst mainly used as a staple food, potatoes do also have a
number of medicinal virtues.

2.1.6. Nutritional composition of potato

The chemical composition of potato tubers is mainly controlled by genetic factors. In addition, the composition is
affected by the age and maturity of the tubers as well as environmental conditions, i.e. climate, soil and cultural
practices. The composition of potato tubers also changes during storage and is affected by the way in which they
are processed

Table1.Nutritional value of potato

Composition Content
Water 74.70
Fiber 0.4
Proteins 1.6
Carbohydrates 18.18
Fat 0.1
Mineral 0.6
Source: Potato in India, Central Potato Research Institute (CPRI), Shimla

2.1.7. Potato products

It is very popular all over the country and there are many food preparations where potato is an important
ingredient. With high percentage of water content, its quality is adversely affected with the passage of time.
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Dehydration process reduces the water contents substantially resulting in enhanced shelf life. Dehydrated potato
Products like potato cubes, sticks, slices and powder.

Figure4.Potato products

2.1.8. Application of potato flour

Potato flour would impart higher shelf life and would also reduce size as well as weight resulting in savings in
transportation costs. This would also enable the consumers to use potatoes during off-season when fresh-ones are
either not easily available or they are costly. Potato flour produce different products such as bread, biscuit so on.
Potato is a food crop with potential for partial replacement of wheat in bread making. Uncooked potato flour
prepared by low-cost solar dehydration technology has a long shelf life and high nutritional quality, which could be
valuable in cereal-based human diets, including bread . Potato flour can serve as a source of energy and nutrients
(carbohydrates, beta-carotene, and minerals) and can add natural sweetness, color, flavor, and dietary fiber to
processed food products. Addition of various proportions of potato flour in wheat flour can increase the nutritive
values in terms of fiber and carotenoids. This also helps in lowering the gluten level and prevents coeliac disease.

The aim of this study was to replace part of the wheat flour in bread by potato flour in order to increase the fiber
and other nutrients. The microbiological qualities of the bread were also assessed. Potato flour is a highly versatile
raw material that can be used in several processed food products. Currently, a large proportion of fresh potatoes are
cold stored for use in the off season. Cold stored potatoes reportedly accumulate reducing sugars, which cause a
decline in the color quality of the processed products. Dehydrating potatoes in season is one way to overcome the
problem of sugar accumulation. It also helps reduce bulk for storage and transportation, with few physiological and
biochemical changes.
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2.2. Raw material selection

 The raw material is Potato

Potato a versatile carbohydrate-rich food highly popular worldwide and prepared and served in a variety of ways.
The potato is a good source of dietary energy and some micronutrients, and its protein content is very high in
comparison with other roots and tubers. Potato is low in fat-but preparing potato with high fat ingredients raises the
caloric value of the dish and also potatoes are important in many diets but need to be balanced with other
vegetables and whole grain foods.

3. PROCESS TECHNOLOGY SURVY

3.1. Process description of potato flour

Raw Material

Potato flour can be produced from potato raw material. The raw material is affected by the age and maturity of the
tubers as well as environmental conditions, i.e. climate, soil and cultural practices.

Washing

Potatoes are stored without removing the dirt for prolonging storability. Prior to delivery to the fresh root markets,
stored potatoes are passed through the packing line for washing, treating with fungicide and sizing.

Sorting

Sorting is the separation of foods into categories on the basis of a measurable physical property. Like cleaning,
sorting should be employed as early as possible to ensure a uniform product for subsequent processing. The four
main physical properties used to sort foods are size, shape, weight and color.

Blanching

Blanching is a special heat treatment process. It is a unit operation which they are heated for the purpose of
inactivating enzymes, modifying texture preserving color, flavor, and nutritional value; and removing trapped air.
Prior to peeling, the cleaned roots can be preheated in hot water for a short time to provide some benefits including
reduction of peeling time and enzymatic discoloration by polyphenol oxidase.

Peeling and Rewashing

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Peeling is used in the processing of many fruits and vegetables to remove unwanted or inedible material, and to
improve the appearance of the final product. The main consideration is to minimizecosts by removing as little of
the underlying food as possible and reducing energy, labor and material costs to a minimum. The peeled surface
should be clean and undamaged. There are five main methods of peeling: flash steam peeling, knife peeling,
abrasion peeling, caustic peeling, and flame peeling. Knife peeling which is Stationary blades are pressed against
the surface of rotating potatoes to remove the skin. Alternatively the blades may rotate against stationary foods.
This method is particularly suitable for the skin which is easily removed and there is little damage.

Cutting and Slicing

The materials are then fed to size reduction machine for cutting into slices, strips and cubes or grinding into fine
particles using a hammer mill or pulp finisher. The potato slicing separates roots into small physical sizes and
increases their drying surface. It is currently done manually and stainless knives are recommended to avoid
undesirable browning reactions. The slicing potato rootsis a tedious exercise, but it has been observed that the
slicing or chipping gives a potato flour of high quality color. The potato grating induces a lot of enzymatic
browning reactions and the fresh grated product is quickly subjected to an undesirable spontaneous fermentation.
Potato balanced chemical composition makes fresh potato a suitable medium for the growth of a wide range of
micro-organisms and other agents involved in the deterioration of the fresh roots.

Drying

Drying is the removal of moisture from a substance. Drying is often necessary in various industrial operations
particularly in chemical process industries to remove moisture from a wet solid, a solution or a gas to make it dry
and choice of drying medium is depends on the chemical nature of the materials.

Among such dehydrated products, potato flour is the oldest, commercially processed potato product. During the
season, when potatoes are cheap, potato flour can be prepared and stored in air tight containers and used later
during off seasons in place of fresh potatoes. Processing of potato into flour is perhaps the most satisfactory
method of creating a product that is not only functionally adequate, but also remain for an extended period without
damage. Many different techniques exist to carry out the drying of food products such as

Milling

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For grinding, any hammer mill can be used. It is desirable to pass twice the dried material in the mill should a finer
flour is desired. The residual humidity in the dried slices should be between 10 and 12%. Over drying of slices
produces a lot of dust and loss of material during the milling.

Separation

Size sorting (termed sieving or screening) is the separation of solids into two or more fractions on the basis of
differences in size. It is particularly important when the food is to be heated or cooled as the rate of heat transfer is
in part determined by the size of the individual pieces and variation in size would cause over-processing or under-
processing. Additionally, foods which have a uniform size are said to be preferred by consumers. Screens with
either fixed or variable apertures are used for size sorting. The screen may be stationary or, more commonly,
rotating or vibrating.

Packing and Storage

After the grinding pack and seal immediately to avoid rehydration and insect infestation. Materials with little
permeability to water vapor, such as cellophane, Polyethylene or polypropylene should be used. The decision on
packaging material is based on transportation requirements and storage time. As soon as the product is placed in its
package it should be sealed immediately, removing as much air as possible from inside the package. This is to
avoid direct exposition of the product to the surrounding air and to minimize any insect attack.

Potato water

Water Washing Blanching Peeling and Cutting

and sorting Re-washing and Slicing
ttttttttttrew

waste waste Vapor

Flour Screening Crushing Drying

Packaging sieve
and Storage

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Figure5.Flow sheet of potato flour production

3.2. Material and energy balance

Material and Energy Balance Material balances are the basis of process design. A material balance taken over the
complete process will determine the quantities of raw materials required and products produced. Balances over
individual process units set the process stream flows and compositions. They are also useful tools for the study of
plant operation and trouble shooting. They can be used to check performance against design; to extend the often
limited data available from the plant instrumentation; to check instrument calibrations; and to locate sources of
material loss. On the other hand, in process design, energy balances are made to determine the energy requirements
of the process: the heating, cooling and power required. In plant operation, an energy balance (energy audit) on the
plant will show the pattern of energy usage, and suggest areas for conservation and savings. In the case of this
study, the need to conduct material and energy balances on major unit operations was to scale up all the
parameters. in order to design the size of the equipment and for equipment selection that helped in estimating
purchased equipment cost. In addition to that they helped in calculating the material, auxiliary and utility costs.
Generally, they are needed to estimate economic analysis; profitability and financial feasibility of the processing
plant.

Material quantities, as they pass through processing operations can be described by material balance. Such balance
are statements on conservation of mass. Similarly energy quantities can be described by energy balance, which are
statements of on the conservation of energy. (Levnspiel & Octave)

We have done the material and energy balance on the following unit operation:-

 Washing and sorting

 Pilling
 drying
 screening

3.2.1. Material balance

Total material balance

Accumulation = output + Consumption − Input + Generation

Since, there is no reaction, generation consumption, and accumulation terms are zero.

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Input=Output (steady state condition)

A. Material balance on washing and sorting

 3000kg/day of raw potato is required for one day.

Mass of potato =3000kg/day

 the production has 2 shift for 6 hr and operates batch wise

for one shift = = 1500kg/shift

Mass of potato = 1500kg/batch

 Assume: the amount of potato waste during washing and sorting is 5%feed
 The amount of water input and output are equal

F=P+W

1500kg/batch=P+5*F/100

1500kg/batch=P+0.05*1500kg/batch
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P= 1425kg/batch

B. Material balance on peeling

 Assume: the amount of potato lost during peeling and rewashing is 9%feed

F=P+W

1425kg/batch= P+9*F/100

1425kg/batch=P+0.09*1425kg/batch

P= 1296.75kg/batch

C. Material balance on the dryer

 Assume: the amount of potato lost during drying is 15%feed

F=P+M

1296.75kg/batch=P+0.15*F

1296.75kg/batch= P+0.15*1296.75kg/batch

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P=1102.24kg/bach

D. Material balance on screening (separator)

 Assume: the amount of potato lost during drying is 6%feed

Oversized = 0.06*1102.24kg/batch =66kg/batch

Crushing and sieving product =0.94*1102.24kg/batch=1036kg/batch

3.2.2 Energy balance

The amount of heat energy gained or lost by a substance can also be calculated for mass of substance :-

Q=M*Cp*(Tf-Ti)

Q= amount of heat energy gained or lost by substance

M= mass of substance

Cp= specific heat capacity (Jkg-1k-1)

Tf= final temperature

Ti= initial temperature

To calculate heat required for blanching

Ti = 25°c

Tf = 80°c

Cp = 3.43KJ/ Kg. °c at room temperature

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Q = m cp ∆T

Q= 1425kg/batch * 3430 J/Kg. °C * (80-25)°C =268,826,250J/batch = 268,826,250J/21,600s

= 12.446KW

Energy Balance on Dryer

Mass of water vapor (M2) =194.5kg/batch

Dryer

Mass of potato (M1) Mass of potato product(M3) = 1102.24kg/batch

=1296.75kg/batch @25oc

Steady state operation

Qinput = Qoutput

Qin = M1Cp∆T1

Where,

Cp= specific heat capacity of potato @25°c OR 298k=3.43KJ/ Kg. k

Cp water = 4.18kj/kg. k

Latent heat(ʎ) = latent heat of dry air @130 °c=2256kj/kg

Q = MCp (Tf-Ti)

Qin = 1296.75kg/batch ∗ 3.43kj/kg.k (130-25)°c

Qin = 467,024.5kJ/batch = 467,024.5kJ/21,600S = 21.62kw

Qout = M2Cp (Tf-Ti) + M3Cp (Tf-Ti)

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=194.5kg/batch∗ 4.18kj/kg.k ∗ (130 − 25)°c + 1102.24 /batch ∗ 2.45kj/kg. k ∗ (130 − 25) )°c

Qout= 368,917.3kJ/batch=368,917.3kJ/21600s

Qout= 17kw

3.3. Equipment design and Specification

Equipment‟s used for production of potato

 Potato storage tank

 Washing and sorting tank
 Heater tank
 Dryer

Potato storage tank

 Material construction is carbon steel


 Mass of potato=3000kg/day
 The storage needs 7day
∗


∗
 = = 31.1m^3
 For avoid overflow and allowance take 10%
 V= 31.1*0.1+31.1= 34.25m^3

washing and sorting tank

 Material construction is carbon steel


 Mass of potato=1500kg/batch

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∗
 = = 2.2m^3
 For avoid overflow and allowance take 10%
 V= 2.2*0.1+2.2= 2.42m^3

Heater tank

 Material construction is stainless steel

Mass of potato 1425Kg/batch

Density of potato = 675kg/m^3

∗
 = = 2.11m^3

For avoid overflow and allowance take 10%

V= 2.11*0.1+2.11= 2.3m^3

The total volume of container approach to 3m3

Dryer Design

The term drying refers generally to the removal of moisture from a substance. Drying is often necessary in various
industrial operations particularly in chemical process industries to remove moisture from a wet solid, a solution or
a gas to make it dry and choice of drying medium is depends on the chemical nature of the materials.

Classification of Dryers

Drying equipment classified based on mode of operation (such as batch or continuous dryer), Type of heating
system (conduction, convection, radiation) and according to the physical State of the feed (such as wet solid,
liquid, and slurry).
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Selection criteria of drying equipment

In view of the enormous choice of dryer types one could possibly the first consideration in selecting a dryer is

 Its operability.
 The equipment must produce the desired product in the desired form at the desired rate.
 The quality required in a finished product.
 It‟s necessary physical characteristics are determined by its end use.
 The final choice is then made on the basis of capital and operating costs.

Based on the above selection criteria rotary dryer will be select.

Rotary Dryer

The rotary drier is basically a cylinder, inclined slightly to the horizontal, which may be rotated, or the shell may
be stationary, and an agitator inside may revolve slowly. In either case, the wet material is fed in at the upper end,
and the rotation, or agitation, advances the material progressively to the lower end, where it is discharged. Typical
dimensions for a unit like this are 9 ft. diameter and 45 ft. length. In direct-heat revolving rotary driers, hot air or a
mixture of flue gases and air travels through the cylinder. The feed rate, the speed of rotation or agitation, the
volume of heated air or gases, and their temperature are so regulated that the solid is dried just before discharge.

Data: -
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 Amount of water in feed= 194.5Kg/batch.

 Dry solid in feed= 1296.75Kg/batch.
 Water content in product= 0.54Kg/hr.
 Hence water dry in dryer=5.4 Kg/hr.
 Inlet air temperature(tg1)=130
 Outlet air temperature= 70
 Inlet feed temperature= 25
 Discharge temperature (tw)= 65
 From sychorometric chart at 80 assuming wet bulb temperature 65oc 70% humidity air.
 The temperature of the air living from the dryer should be selected on the basis of an electronic balance
between dryer cost and fuel cost. It has been that rotary driers are most economical operated when the
total number of transfer units (NTU) range from 1.5 to 2 assuming NTU= 1.5

𝑁𝑇𝑈 = 𝑙𝑛 [(𝑡 1 − 𝑡𝑤)]/ [(𝑡 2 − 𝑡𝑤)]

1.5 = 𝑙𝑛 [(130 – 65) /(𝑡 2 – 65)]

1.5 = 𝑙𝑛 [65/(𝑡 2 – 65)]

𝑒1.5 =65/(tg2-65) = 4.482= 65/(tg2-65)

4.482*tg2-4.482*65=65

tg2= 79.5°c

Heat balance

Cp of potato= 3.43KJ\Kg

Cp of water= 4.18 KJ\Kg

Temperature detail

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Table2.Inlet and outlet of feed and air

Stream Feed air

Inlet 25°c 130°c
Outlet 65°c 70°c

Heat required to rise the feed to @45 Cp of air= 1

Q = (m × Cp × T) in + (m × Cp × T) out

=for one batch=6hr

= 1102.2Kg/batch × 3.43KJ/Kg × (45 − 25) + 0.54Kg/hr × 1 KJ/Kg × (45 − 25)

= 12,612.62K J

 The water evaporate is 5.4Kg/hr of evaporation latent heat at 25 heat required to evaporate

5.4Kg of water.

Q = m * ʎ = 5.4Kg ×2441KJ/Kg= 13181.4 KJ

 Heat required to super heat the product to 80°c

= 1102.2Kg/batch × 1.95 × (80 − 45) + 5.4Kg/hr × 1.95 (80 − 45)

=12,906.075KJ

Total heat required to raise the product to discharge the temperature.

Qt = (12,612.62+13181.4 + 12,906.075) KJ

= 38,700.095KJ

LMTD across the dryer tm

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tm = [(130 − 25) − (70 − 65)]/ln[130 − 25/70 − 65] = 32.85°c

The minimum velocity of air is set based on the particle size. Air flow rate of 1m3/sec or 100ib/hr.ft3

 Amount of air required.

M = Qt/Cp t = 38,700.095KJ/ (1) × (130 − 70) = 552.8585Kg/hr

 The maximum amount of water present in this amount water is 40% that is 132.154Kg/hr
 Assume an extra amount of 10% of this quantity to account the heat losses.

= 1.1 × 552.8585Kg /hr = 608.144Kg/hr

 If the velocity of air is 1ib/hr. ft. equal to 150.00Kg/hr m3

Area of drier = (552.8585Kg/hr/150Kg/hr m3)

= 3.7m2

Diameter of dryer

A=Pi*D^2/4

D^2= 4*3.7/3.14= 4.7

D=2.2m

Length of transfer unit (Ltu) has been related to mass velocity and diameter by the following relation.

Ltu = 0.0064 × Cp × G0.84 × 2.2m = 0.0064 × 1 ×552.8585 × 2.2m= 7.78m

Length of dryer = Ltu × NTU = 7.78× 1.5 = 11.67m

The following dimensions are chosen for dryer.

L= 11.67m; D= 2.2m

L/D= 11.67/2.2

= 5.3m
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L/D should be ranges between 1.5 and 10 hence the design is safe. Shell thickness of dryer (ts)

ts = Pi × Di/2fj − Pi

Where: -

Pi= design pressure or internal pressure

f= design stress of material construction type that is carbon steel= 135N/mm2

J= welded joint efficiency which is double welded bufall or equivalent= 0.85

Di= 2.2m

P = Pa + ghρavg

pavg = (density of potato+ ρwater)/2 = 1035kg/m3

P = 101325N/m2 + 675kg/m3*9.8m/s2*11.67m

P = 178,600.8225 N/m2

Assuming 5% allowance

P = 0.05*178,600.8282 N/m2

P = 8,930.04141N/m2

Pi = P + (8,930.04141N/m2)

Pi = 187,530.8696N/m2 = 0.1875N/mm2

The design stress for stainless steel @ 70 0C is 159 N/mm2

∗
T=
∗ –

= 1.3mm

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But from the standard the minimum thickness is given as 8mm and by considering corrosion allowance 20%;
including the corrosion allowance the thickness can be taken as 10mm There for the outer diameter (Do) will
be taken as: -

Do = Di + 2t

= 2.2m + 2× 0.0013m = 2.2026m

To find the diameter of the feed pipe

Feed rate =1296.74kg/batch

Volumetric flow rate = mass (m)/density

= 1296.74kg/batch/675kg/m3 = 0.32m3/hr

 Assume velocity of feed to be 10m/hr

Cross sectional area of the feed pipe = 0.32/10m/hr

= 0.032m2

Diameter of feed pipe (D) = √( 4*0.032/3.14)

D=0.041m

To find the diameter of the air inlet and outlet pipe.

Inlet

Temperature of air=130°c

Humidity of inlet air=0.002kg of water/kg of air

Volumetric flow rate of air = mass/density = 7.14m3/s

Assuming velocity of air entering to be 20m/s

Cross sectional area of inlet air pipe=7.14m3/s/20m/s=0.357m

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Diameter of inlet pipe = √(0.357*4/3.14)=0.675m

Outlet

Temperature of air=70°c

Humidity of outlet air=0.065kg of water/kg of air

Volumetric flow rate air = mass/density = 9.11m3/s

Assuming velocity of outlet air to be 20m/s

Cross sectional area of outlet air pipe=9.11m3/s/20m/s=0.4555m2

Diameters of outlet pipe =(4*0.4555/3.14)= 0.761m. (Coulsol & Richardson, 1983)

4. ENGINEERING ECONOMICS

4.1. Market study and plant capacity

Based on the market study and period required for project implementation and full capacity attainment, the
envisaged plant will have annual production capacity of 621,600 kilo gram per year. Production of the potato flour
will start by 2016 year. Assume that to produce 50% of the total capacity of the 2016 year. and by taking 300 of
working day in a year with 2 shift.
Therefore Our capacity (Q) = 80% of the 2016 year capacity. 0.8*621,600 kg/year = 497,280kg/annum by giving
allowance 10% total capacity it is possible to produce the 621600kg/annum.
= 621,600kg/annum*(1annum/300deay)
= 2,072 kg/day the production has 2 shift for 6hr and operates batch wise
Production period
Production will commence at 80% and then will give 90% then 100%.
Table 3.Production period

Year 1 2 Above 3
Utilization capacity 80% 90% 100%
Production(kg) 497280 559440 621600

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4.1.1. Past supply and present demand

Potato flour and flakes are becoming a popular breakfast and snack food. The country's requirement for the
products has been met through imports. Table 4 shows the amount of potato flour imported during 2004-2010. As
can be seen from the information depicted in the Table, an import of the product has exhibited a fluctuating trend
from year to year.

Table 4.past supply and present demand

Year Import in kg
2004 1521
2005 1722
2006 1873
2007 1920
2008 1900
2009 2020
2010 2100
Source: - Ethiopian Revenues and Customs Authority.

To calculate rate of growth:

r = slope = ∆Y/∆X

= (2100–1521)/7

= 82.7%

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To determine the amount of potato flour produced using for casting

2011 = 2010(1+r) t

= 2100(1+0.827)

= 3836.7 kg = 3.837ton

Table 5.Fore casting

year For casting(ton) per anuum

2014 3.837
2015 7
2016 12.81
2017 23.4
2018 42.75

4.1.2. Demand projection

Potato flour is different from wheat flour for any human diet. Hence, the demand of potato flour depends mainly
on the growth of the manufacturing sector particularly in the flour industry. Considering the growth of population
and the increasing number of manufacturing enterprises demand is projected by applying a 10% annual growth
rate see table 6.
Table 6.projected demand for the future of potato flour

year Quantity in kg/year

2019 78100
2020 142,688.7
2021 260,690.9
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4.2. Investment costs

Cost of output materials:-

Cost of flour product=20birr/kg=$0.5

Total amount of flour product=2071.2kg/day

Total cost of flour product=2071.2kg/day*20birr/kg =41424Birr($1035.6)

Total cost of the product per year =41424*300= 12,427,200birr/year ($310,680/year)

4.2.1. Capital investment

The total capital investment (TCI) is an economic term, which involves the sum of the fixed capital investment
(FCI) and other outlays (working capital investment). The fixed-capital investment consists on the capital needed
to provide all the depreciable facilities such as purchased equipment, piping, instrumentation, etc. -excepting the
costs associated with land, which is not depreciated- and it is divided into the costs which are always permanent in
a plant, known as direct costs (DC), and the costs which momentarily remain during plant construction, known as
indirect costs (IC). By using a checklist of items, we are going to estimate fixed Capital investment (FCI) and total
capital investment (TCI) based on purchased equipment cost. Since our process is solid -solid processing plan.

The total capital investment is sum of the following:

Fixed capital investment (FCI) is the capital needed to supply all manufacturing and facilities. This includes

Direct (manufacturing) fixed capital investment is the amount of money necessary for the installed process
equipment with all auxiliaries needed for a complete process operation.

Indirect (non-manufacturing) fixed capital investment is construction overheads and all plant components, which
are directly related to the process operation.

Total Capital Investment = Fixed Capital Investment + Working Capital Investment

For this case, capital investment items are calculated based on the purchased equipment cost of the plant. Fixed
capital cost = ƒ (purchased equipment cost) (MAX & KLAUS, 1991)

To estimate total capital investment of the plant, first find the cost of each purchased equipment cost is important.

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Table 7.Purchasing equipment cost

Equipment Number of Material of Capacity Cost in ($)

equipment constriction
Potato storage tank 1 Carbon steel 6402
Washing and sorting 1 Carbon steel 3 346
storage
Heater 1 Steen less steel 580
Rotary Drier 1 Carbon steel 3.7m2 12636
Hammer mill 1 Carbon steel 216kg/hr 12391
Sieve 1 Carbon steel 200mm 582
Total 32,937
Source: www.Matche. Com

Purchased equipment cost (PEC) is $32,937

A. Direct cost

Direct cost is the type of fixed capital investment costs that directly applicable for plant erection. Before we are
going to estimate the direct cost first identifies the process type (solid processing plant, solid-fluid processing plant
and fluid processing plant). Therefore, our processing plant is solid-fluid processing plant.

Table8.Direct cost

Item (direct cost Percentage of PEC (%) Cost ($)

Purchased equipment 25 32,927
Purchased equipment installation 10 13,170.8
Instrumentation and control 6 7,902.5
Piping 5 6585.4

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Electrical equipment and material 5.5 7244

Building process (including service) 6 7902.5
Yard improvement 3 3951.24
Service facilities 10 13,170.8
Land 1 1317.1
Total fixed direct cost 94,171.32

B. Indirect cost

Indirect costs are expenses, which are not directly involved with material and labor or actual installation of
complete facility.

Table9.Indirect cost

Indirect items (indirect Percentage of PEC (%) Cost ($)

expenses)
Engineering and supervision 10 13,170.8
Construction expenses 10.5 13829.34
Contractors fee 2 2634.2
Contingency 6 7902.5
Total fixed indirect cost 37,536.84

4.2.1.Total fixed capital investment (FCI)

Fixed capital is the total cost of the plant ready for start-up. It is the cost paid to the contractors.

Fixed capital investment = direct cost + indirect cost

= $94,171.32+$37,536.84

=$131,708.2

Total capital investment (TCI) =Fixed capital investment (FCI) +working capital (WC)

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TCI= FCI + WC but WC = (10-20) % TCI, taking 15%

TCI= FCI + 0.15 TCI

TCI – 0.15TCI = FCI

TCI (1-0.15) = FCI

0.85TCI = FCI

TCI = = = $154950.8/year

4.2.2. Working capital

Working capital is the capital needed for the daily running of the plant. This consists of the total amount of money
invested in.

Raw material and supply carried in stock

Accounts receivable and

account payable

Cash kept on hand for monthly payment of operating expense

Taxes payable

Finished product in stock

Semi finished product in stock

The working capital is 10-20 % total capital investment (TCI), assume 15%

WC = 0.15 *TCI

WC = 0.15*$154,950.8

WC = $23,242.62

4.2.3. Total Production Cost (TPC)

Determination of the necessary capital investment is only one part of a complete cost estimate. Another equally
important part is the estimation of costs for operating the plant and selling the Products. These costs can be
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grouped under the general heading of total product cost. The latter, in turn, is generally divided into the categories
of manufacturing costs and general expenses. Manufacturing costs are also known as operating or production
costs. Further subdivision of the Manufacturing costs is somewhat dependent upon the interpretation of direct and
indirect costs.
 Total product cost = manufacturing cost + general expense

 Manufacturing cost = direct production cost + fixed charge + plant-overhead cost

 General expense =administrative +distribution and selling costs+ interest

4.2.3.1. Manufacturing cost

Manufacturing cost consists of direct production cost, fixed charges and plant overhead costs.

A. Direct production cost

Table10.Direct production cost

No Parameters Range in % Assumed % Equation

taken
1 Raw materials costs 10----50% of TPC 15% 0.15*TPC
2 Operating labor costs 5----30% of TPC 10% 0.05*TPC
3 Direct supervisory and 10----25% of operating 11% 0.0225*TPC
clerical labor costs labor
4 Utilities costs 5----20% TPC 5% 0.05*TPC
5 Maintenance and repair 2----10% of FCI 2% $2,634.16
costs
6 Operating supplies costs 0.5----1% of FCI 0.75% $65,854.1
7 Laboratory charges 10----20% OF operating 10% 0.0225*TPC

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labor
8 Patents royalties 0----6% of TPC 2% 0.01*TPC

From the above table the total direct production costs can be determined:

Direct production cost (DPC) =TPC (0.15+0.05+0.0225*2+0.05+0.01) + ($2634.16 +$65854.1)

DPC=0.305*TPC+$68488.26………………………………………………………… (1)

B. Fixed charge

Table11.Fixed charges

No Parameters Range in% Assumed % equation

taken
1 Depreciation 10% of 10% 0.1*FCI=0.1*$131,708.2=$13,170.82
FCI
2 Local taxes 1----4% of 1% 0.01*FCI=0.01*$131,708.2=$1,317.1
FCI
3 Insurance 0.4----1% 0.5% 0.02*FCI=0.005*$131,708.2=$658.541
of FCI

Note: Rent (8-12) % of value rented land and buildings – for the safe of promoting local investors, in Ethiopia
provide land free from taxes and rents.

From the above table the fixed charges can be determined:

Fixed charges (FC) = $(13,170.82+1317.1+658.541) =$15,146.46

FC= $15,146.46…………………………………………………………………………. (2)

C. Plant overhead costs (POH)

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5-15% of total product cost: includes cost for the following: general plant upkeep and overhead, payroll over head,
packaging, medical services, safety and protection, restaurants, recreation, salvage, laboratories, and storage
facilities.

Therefore, POH=0.05*TPC……………………….. .……………………………………….. (3)

From equation 1, 2 and 3 the manufacturing costs are:

Manufacturing cost (MC) = direct production cost (DPC) + fixed charge (FC) + plant overhead cost
(POH).

MC=0.305*TPC+$68488.26+0.05*TPC+$15,146.46

MC=0.35*TPC+$83634.72……………………………………………………………. (4)

4.2.3.2. General expense

A general expense consists of administrative costs, distribution costs, and selling costs, research and development
costs and financing (interest).

Table12.General expense

No Parameters Range in % Assumed % taken equations

1 Administrative 2----6% of 2% 0.02*TPC
costs TPC
2 Distribution 2----20% of 2% 0.02*TPC
and selling TPC
costs

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3 Research and 1% of TPC 1% 0.01*TPC

development
costs
4 Financing or 0----10% TCI 1% 1%*TCI=0.01*$154,950.8=$1549.5
interest

From the above table the general expense costs can be determined:

General expense (GE) =administrative (AC) +distribution and selling costs+ interest (I)

+Research and development costs

GE=0.02*TPC+0.02*TPC+0.01*TPC+$1549.5

GE= 0.05*TPC+$1549.5……………………………………………………………….. (5)

From equation, 4 and 5 we can determined total production costs: Therefore,

Total production cost (TPC) =manufacturing cost (MC) +general expense (GE)

TPC=0.355*TPC+$83,634.72+0.05*TPC+$1549.5

TPC=0.405*TPC+$85,184.22

(1-0.405)*TPC=$85,184.22

0.595*TPC=85,184.22

TPC=$143,166.7563/year

 From equation 1
direct production cost (DPC) =0.305*TPC+$68488.26

Direct production cost (DPC) = 0.305*143,166.7563+$68488.26

Direct production cost (DPC) = $112,154.12/year

 From equation 3
the plant over head cost (POH) =0.05*TPC= 0.05*$143166.7563/year=$7,158.34/year
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 From equation 4
the manufacturing cost (MC) =0.355*TPC+$83634.72

Manufacturing cost (MC) = 0.355*143,166.7563+$83634.72=$134,458.92/year.

 From equation 5
the general expense (GE) = 0.05*143,166.7563+$1549.5

General expenses (GE) =$8707.83/year

4.3. Financial analysis

4.3.1. Annual gross earning (gross profit)

A. Depreciation:-

Depreciation charge (d) entering the cash-flow stream for return to the capital sink

Assumption;

 the average service life (n) of all equipment is assumed to be 10 years

 the value of the property depreciates linearly ,i.e. Straight line method is applicable

 Assume the salvage value of the equipment‟s (Vs.=$500)

Gross profit = Total sale revenue (TSR)-Total production cost (TPC)-Depreciation(d)

But, total sale revenue (TSR) =selling price*total production capacity

Total sale revenue (TSR) =Selling price*total production capacity

=$0.5/kg*621,600kg/year

=$310,800/year

Gross profit = Total sale revenue (TSR)-Total production cost (TPC)

=$310,800/year-$143,166.7563/year

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=$167,633.24/year

4.3.1. Profitability
Based on the projected profit and loss statement, the project will generate a profit throughout its operation life.
Moreover, at the end of the project life the accumulated cash flow amounts is (10% TCI) to $12,019.8.Gross
earning/ income and net profit worth calculation (if the product is to selling purpose) the following analysis
is required for the feasibility of the project.

4.3.1.1. Net profit

Net profit= Gross profit – Income tax = Gross profit – 35% Gross profit

Net profit=$167,633.24/year - 0.35*$167,633.24/year= $108,961.6/year

Net profit=$108,/yea961.6/year

Based on the projected profit and loss statement, the project will generate a profit throughout its operation life. The
annual net profit after taxes is $/year during the life of the project.

4.3.1.2. Percent profit

%profit = *100 = *100

% profit = 0.761*100% = 76.1%

4.3.2. Break-even analysis (BEA)

The break-even analysis establishes a relationship between operation costs and revenues. It indicates the level at
which costs and revenue are in equilibrium. To this end, the break-even point of the project including cost of
finance when it starts to operate at full capacity (10months) is estimated by using income statement projection.

Breakeven point is the production volume at which there is no loss or profit. At that point, any revenue obtained
will be sufficiently to cover only the fixed cost.

The break-even analysis establishes a relationship between operation costs and revenues. It indicates the level at
which costs and revenue are in equilibrium. To this end, the break-even point for capacity utilization and sales
value estimated by using income statement projection are computed as followed.

Break even value=

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Unit variable cost=

Total cost of raw material per year =15%TPC

= 0.15*$143,166.7563=$21,475/year

Utility cost per year= 0.05% Total product cost

Utility = 0.05*$143,166.7563/year =$7158.33

Annual capacity production = 621,600kg/year

Unit variable cost = = = $0.046/kg

Unit selling price= 20birr= $0.5/kg

Fixed cost= Fixed charge+ Plant overhead cost+ General expense

 Fixed charge (FC)= $15,146.46

 Plant overhead cost(OPC)= 0.05*TPC=0.05*$143,166.7563=$7158.33
 General expense(GE)= $8707.83/year

Fixed cost= $15,146.46+$7158.33+$8707.83/year=$31,012.62/year

Break even value=

= = $68,309.73/year

Break Even Point = ∗ = *100= 10.98%

4.3.3. Pay-back Period

The pay- back period, also called pay – off period is defined as the period required for recovering the
original investment outlay through the accumulated net cash flows earned by the project. Accordingly, based on the

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projected cash flow it is estimated that the project‟s initial investment will be fully recovered within
approximately4months.

Payback period =

Net cash accrual= Net Profit + Depreciation

Net cash accrual ==$108,961.6/year +$13,170.82/year=$122,132.42/year

Payback period = = = 1.078year

4.3.4. Rate of return or Rate on investment

Rate of return or rates on investment indicating us in how much percentage the plant return its investment cost.

ROR/ROI = *100% = =0.7032*100% =70.32%

4.3.5. Projected cash flow

The investment of production of potato flour industry is based on 70% from bank loan payable in 5 years of
operation bearing an interest rate of 12% and the remaining 30% is from stack holders.

Therefore, loan from bank = 70% (total capital investment) = 0.7*$154950.8/year = $108465.56/year

A. Loan repayment calculation

Loan payment = =$21693.112/year

B. Interest rate calculation

We are taking the interest rate as 12%

Year = 12%*total loan from bank = 0.12*$108465.56/year = $13015.87/year

Year = 12 %*( $108465.56/year- $21693.112/year) = $10412.69/year

Year = 12% *(108465.56$- 2*$21693.112) = $7809.52/year

Year = 12% *($108465.56- 3*$21693.112) =$5206.35/year

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Year = 12 %* ($108465.56- 4*$21693.112) =$2603.17/year

Table 13.Projected cash flow of potato flour production

Year 0 1 2 3 4 5 6 7 8 9 10
Capacity - 80% 90% 100% 100% 100% 100% 100% 100% 100% 100%
y
utilizatio
n on
Cash in - 248.6 279.72 310.8 310.8 310.8 310.8 310.8 310.8 310.8 330.8
flow ($) 4

Revenue 248.6 279.72 310.8 310.8 310.8 310.8 310.8 310.8 310.8 310.8
($) 4

Salvage( - - - - - - - - - -
$) 20
Cash out 154.9508 76.51 77.4879 78.464 75.861 73.258 48.961 48.961 48.961 48.961 48.9618
flow ($) 3 5 45 28 13 82 82 82 82 2

Investm - - - - - - - - - -

Ent cost
($)
Raw - 17.18 19.3275 21.475 21.475 21.475 21.475 21.475 21.475 21.475 21.475

material
l cost ($)
Utilities - 5.726 6.442 7.158 7.158 7.158 7.158 7.158 7.158 7.158 7.158
($) 6

POH($) - 5.726 6.442 7.158 7.158 7.158 7.158 7.158 7.158 7.158 7.158
6

Depreci - 13.17 13.1708 13.170 13.170 13.170 13.170 13.170 13.170 13.170 13.1708

ation($) 082 2 82 82 82 82 82 82 82 2

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Loan - 21.69 21.6931 21.693 21.693 21.693 - - - - -

payment( 3112 12 112 112 112
$)
Interest - 13.01 10.4125 7.8095 5.2063 2.6032 - - - - -
($) 587 2 2 5

Gross -154.951 172.1 202.232 232.33 234.93 237.54 261.83 261.83 261.83 261.83 281.838
profit($) 27 05 555 872 187 818 818 818 818 18

Net 111.8 152.710 154.40 152.71 154.40 170.19 170.19 170.19 170.19 183.194
profit($) 826 2 22 02 22 48 48 48 48 8
Discount 1 0.893 0.797 0.711 0.636 0.567 0.506 0.452 0.404 0.361 0.322
factor(D
F) at
(r=12%)
PV=CF* 153.7 161.178 165.19 149.42 134.68 132.49 118.35 105.78 94.523 90.7518
DF -154.951 094 9 06 1 62 01 09 26 58 9
Pv of
cash in 222.0 222.936 220.97 197.66 176.22 157.26 140.48 125.56 112.19 106.517
flow 0 355 8 88 88 36 48 16 32 88 6
Pv of
cash out 68.32 55.788 48.247 41.537 24.774 22.130 19.780 17.675 15.7657
flow -154.9508 611 61.7579 22 77 36 68 74 58 22 1
Total pv 1681.87
cash in

Total pv 530.7351
cash out

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4.3.6. Net present value

Net present value (NPV) is defined as the total present ( discounted) value of a time series of cash flows.
NPV aggregates cash flows that occur during different periods of time during the life of a project in to a common
measuring unit i.e. present value. It is a standard method for using the time value of money to appraise long-term
projects. NPV is an indicator of how much value an investment or project adds to the capital invested. In principal
a project is accepted if the NPV is non-negative.

Present Value (PV) = Cash flow (CF) *Discount factor (DF)

NPV=total pv cash in – total pv cash out

NPV=$1681.87-$530.7351=$1151.134*10^3

Profitability index(PI) is the ratio of total present value of cash in to total present value of cash out

$530.7351=3.168944

Since the net present value is positive and the net present value ratio is greater than 1 the project is
acceptable and viable for implementation.

Generally if the factory or the plant is implemented it must be full fill the following conditions.

Net present value must be positive (NPV) i.e. It is positive the project is accepted.
Net present value ratio or profitability index (NPVR OR PI)>1, i.e. 7.5>1 the project is accepted
Payback period must be less than 5 years i.e. 1year <5 years
Therefore the factory can be implemented because it is feasible and profitability. (MAX & KLAUS, 1991)

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5. PLANT LOCATION, PLANT LAYOUT AND ENVIRONMENT

5.1. Plant location
The location which selected for producing the potato flour is around Debre Birhan town. Debre Birhan which is
located at 130 km from Addis Ababa. It is a capital town of North Shewa Zone in Amara Region with an estimated
population size of 200,000.

Country ………………..Ethiopia

Region …………………Amara

Zone …………………….Semen (north) shewa

Coordinates……………..9 41 ‟N 39 32 ‟E latitude / 9.683 N 39.533E longitude

Elevation ………………...2,840 m

The climate in Debre Birhan is warm and temperate. The summers are much rainier than the winters in Debre
Birhan. The average temperature in Debre Birhan is 14.4 . In a year, the average rainfall is 964 mm. The driest
month is December, with 4 mm of rain. The greatest amount of precipitation occurs in July, with an average of
319mm. May is the warmest month of the year. The temperature in May averages 16.9 . The lowest average
temperature in the year occur in December, when it is around 12 .

The following are the key factors in selecting a location

Factors cost
Protected markets & economies of scale
Government influence

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Corporate matters
Source and raw material cost
Location with respect to the marketing area
Construction cost
Raw material supply
Transport facilities
Availability of labor
Availability of utilities fuel, power
Availability of suitable land
Environmental impact and effluent disposal
Local community considerations
Climate condition

5.1.2. Plant Layout

Plant layout is a plan of optimum arrangement of facilities including personnel, operating equipment,
storage spaces material handling equipment and all other supporting services among with the density of best
structures to contain all these facilities. The overall objectives of plant layout are to design a physical arrangement
that meet the required output quality and quantity most economically. The main objective consists of organizing
and working areas with most efficient way and at the same time satisfactory and safe for the personnel doing the
work.

5.1.3. Principles of plant layout

The main principles of plant layout are listed below as follows.

Overall integration of factor

Minimum movement
Unidirectional flow
Effective use of available place
Maximum visibility

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5.1.4. Site selection

The exact place is near to Debre Birhan town at Tebase for different reasons:

The availability of raw materials comfortable for production of potato due to availability of water for irrigation and
minimize the cost which used for transporting raw materials.

It is suitable for transporting product due to Debre Birhan is one of industrial zone

In Debre Birhan excess of wheat flour due to availability of raw material, there for easily bought wheat flour with
low transporting cost.

Factors which needs to be considered during plant site selection includes:

• Site characteristics (Landscaping on industrial & reclaimed land, the topography)

• Environmental considerations of valley or hillside sites

• Road, rail, sea & air access to industrial sites

• Discharge of effluent & general site drainage

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• Water supply (natural water supplies, water authority supplies & the appropriate negotiating methods and
contracts, Water storage, settling wells & draw off regulations)

5.2. Economic and Social benefits

The project can create employment for many persons. The project will generate $120,169 in terms of tax revenue.
The establishment of such factory will have a foreign exchange saving effect to the country by substituting the
current imports. The project will also create forward and backward linkage with the manufacturing sector and also
generates income for the Government in terms of payroll tax.

5.3. Environmental considerations

Vigilance is required in both the design and operation of process plant to ensure that legal standards are met and
that no harm is done to the environment. Consideration must be given to:

1. All emissions to land, air, water.

2. Waste management.

3. Smells.

4. Noise.

5. The visual impact.

6. Any other nuisances.

7. The environmental friendliness of the products

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6. Conclusion and Recommendation

6.1. Conclusion
From the study preliminary design of potato flour and method of profitability analysis we looked that the project is
more feasible. Its feasibility is checked by a number of profitability method of analysis such as net profit value, net
present value, rate on investment, payback period and profitability index.

Based on the market study the plant capacity is determined to be 621,600 kilogram of potato flour per year and the
project is profitable since the rate of return on investment was 70.32%, this shows the project returns its value
70.32% of the initial investment and the payback period is around 1.078 year.

6.2. Recommendation

If all equipment‟s are available, the production of potato is easy. even though the production of potato flour starting
from home scale up to industrial level. As much as possible if produce for blend is over all acceptable.

Potato availability becomes excessive at the time of production based on climate or season, and to avoid such type
of problem it is advisable to produce potato flour in a massive in suitable climate and distributing at the time of
disappearing.

We recommended that further work on the proximate composition of wheat flour and potato flour (the crude
protein, its carbohydrate, fat and moisture) and analysis the effect of microbial on potato and blend flour. Due to
provide good quality, high shelf life product.

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7. REFERENCE

WWW.Cooksinfo.Comm>>.....> flour Retrieved. (2016, April 13).

A.& Bakhsit, S. (2004). Effect of dry chip storage on yield and functional properties of extracted starch(232-240).

A.S.& K, B. S. (2004). Effect dry chip storage on yield and functional properties of extracted starch(232-2400.

Adeleke, R.O.& Odejeje, J. O. (2010). functional property of wheat and potato flour blend. food and nutrition
science, 535-538.

Coulsol, & Richardson. (1983). Chemical engineering design (5th ed., Vol. Vol.6). Butterworth-Heinemann.

Enwere, N. (1998). food of plant origin. Nsukka: Afro-orbis.

FAO. (2003). production statistics food and agriculture organization. Rome.

Jongen, W. (2002). Fruit and Vegetable. New York Washington,DC: Woodhead publishing limited, Abiington
Hall, Abington Cambridge CB1 6AH,England.

Levnspiel, & Octave. (n.d.). Chemical reaction engineering. Singaphore Toronto p;: John-Wiley and sons Neyork
chic ester Weinhein Brisbana.pp .

MAX, S.P.& KLAUS, D. T. (1991). Plant design and economics. Singapore: Mcgraw-Hill,Inc.

O, A. R., & O, O. J. (2010). functional property of wheat and sweat potato blend. food and nutrition science,vol,7,
535-538.

Roach, O. (10 june 2002). "saving the potato in its Andean Birth place". national geographic retrieved 11
september 2009.

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