Wednesday, December 18, 2013


1,4-Butanediol is the organic compound with the formula HOCH2CH2CH2CH2OH. This colorless liquid is derived from butane by placing alcohol groups at each end of the chain. It is one of four stable isomers of butanediol.

1,4-butanediol is an industrial chemical which provides good environmental characteristics and involves minimal health risks to workers. 1,4-BD is an important raw material used in both the organic chemical and fine chemical industries. It is widely used in the medicine industry, the chemical industry, the textile industry, the paper making industry, the automobile industry, and the daily-using chemical industry.

Industrial Use

1,4-Butanediol is used in industries as a solvent and in the manufacture of some types of plastics, elastic fibers and polyurethanes. Inorganic chemistry, 1,4-butanediol is used for the synthesis of γ-butyrolactone (GBL).It dehydrates to an important solvent tetrahydrofuran in the presence of phosphoric acid and high temperature. At about 200°C in the presence of soluble ruthenium catalysts, the diol undergoes dehydrogenation to form butyrolactone.

World production of 1,4-butanediol was claimed to be about one million metric tons per year and market price is about 2,000 USD per ton.

Almost half of it is dehydrated to tetrahydrofuran to make fibers such as Spandex. The largest producer is BASF.


Product Application

1,4-Butanediol is an immediate chemical used in the production of chemicals and polymers.

Given some of the application sectors and their end use

Tetrahydrofuran (THF)- PTMEG to Spandex fibres, Solvents

Themoplastic polyurethane (TPU)- Synthetic leather sole material

Polybutylene terephthalate (PBT)- Engineering plastic – various PBT compounding materials; N-methyl-2-pyrrolidone (NMP) (Extraction solvent, cleaning agent used in the electronics industry, polyaramids)

Gamma-butyrolactone (GBL)- 2-pyrrolidone (pharmaceutical Intermediates and high value polymers), n-vinyl-2-pyrrolidone (polyvinyl pyrrolidone); Agrochemicals; Foundry resins; Elastomers and copolyester ethers

Benefits and Applications

1,4-BDO is a versatile chemical intermediate because of its terminal, primary hydroxyl groups and its hydrophobic and chemical resistant nature. Polymers produced upon reaction with diacids or diisocyanates are the basis for many commercial polyurethane and polyester applications.

Thermoplastic Polyesters- 1,4-BDO is used to manufacture polybutylene terephthalate (PBT). PBT's high strength, excellent thermal stability and good durability lead to its many uses in the automotive, electrical and appliance industries. PBT is also compatible with several other thermoplastics which enables a compounder to tailor a polymer alloy to an end user's specifications.

1,4-BDO is a key component of thermoplastic copolyester elastomers. These elastomers rely upon 1,4-BDO to provide crystallinity which in turn provides elasticity and resilience to these terephthalate based polyesters.

Polyesters- 1,4-BDO is primarily used as a component of polyesters or as a chain extender. Polyesters such as poly (butylene adipate) diols are formulated into urethane elastomers with excellent oil, chemical and UV resistance. These materials have good mechanical properties over a broad temperature range, as well as good flex and abrasion resistance. As a chain extender with MDI systems, 1,4-BDO provides a good balance between hardness and low temperature flexibility. 1,4-BDO combines the best attributes of hydroxyl reactivity, linearity and overall system compatibility to build in the proper crystallinity required in the polyurethane hard segment.

1,4-BDO is used as a chain extender for thermoplastic urethane elastomers. 1,4-BDO yields crystalline urethane domains which readily melt and flow at elevated temperatures but phase separate at ambient temperatures in order to yield tough elastometric networks.

Current applications of 1,4-BDO based urethane elastomers include automotive front and rear end fascia, bumpers, fenders and spoilers. Non-automotive applications include footwear, electrical enclosures, recreation equipment, appliances and furniture.

Polyester Plasticizers- 1,4-BDO based polyester plasticizers impart superior compatibility with vinyl polymers while providing non-migrating characteristics. Polyesters based upon 1,4-BDO have excellent oxidation resistance and good low temperature flexibility.

Copolyester Hot Melt and Solvent Borne Adhesives - 1,4-BDO is a key component of copolyesters of isophthalic acid and terephthalic acid used in hot melt adhesive applications. 1,4-BDO yields polyesters with excellent adhesive and cohesive strength.

Storage and Handling

·         In the presence of strong acids, 1,4-BDO is dehydrated to tetrahydrofuran.

·         It is be kept away from heat, sparks and flame.

·         Since 1,4-BDO solidifies at temperatures below 19°C, appropriate storage temperatures are required.

·         1,4-BDO can be shipped and stored in mild steel; however, coated tanks or stainless steel will prolong product consistency. Upon longer storage, water and iron should be avoided.

·         It is to be stored under a pad of dry nitrogen.

Demand and Growth

BDO demand growth is primarily driven by direct use in plastics (PBT and PU) and by indirect demand into textiles (THF through PTMEG to Spandex). Spandex is increasingly used alongside all major fiber  types,  as  it  adds  stretch  without  upsetting  the  aesthetic  nature  of  the companion yarn. PBT and PTMEG segments account for about 70% of global BDO equivalent demand.

The ultimate end user industries (e.g.  automotive,  construction)  are  projected  to  grow  at  or    around GDP, the demand for plastics in these industries is significantly higher. This increase  in  demand  is  attributed  primarily  to  changes  in  design  and performance needs of the end use industries.


Acetylene based Process (Reppe Chemistry)

Acetylene-based production is the most embedded into the BDO industry.  BDO produced via Reppe chemistry still accounts for about 40 percent of the global BDO capacity.   Key producers still using the Reppe chemistry include BASF, Ashland (formerly ISP), and DuPont.

The Reppe process is particularly popular in China.  Acetylene is reacted with formaldehyde to form butynediol (BYD) which then undergoes high-pressure hydrogenation to form BDO.  The efficiency of the technology focuses on acetylene purification (via CaC 2 from coal) in conjunction with proprietary catalyst and reactor technology, followed by BDO refining steps.  The produced BDO undergoes ring closing chemistry to form THF.

Butadiene-based Process (Mitsubishi)

Mitsubishi Chemical Industries became the first company to break the technology barrier with the commercialization of its butadiene acetoxylation process. This process uses butadiene as the feedstock for BDO.

The Mitsubishi process employs a multi-step synthesis of BDO based on the acetoxylation of butadiene to 1,4-diacetoxy-2-butene, followed by hydrogenation to produce BDO, followed by hydrolysis of BDO to form THF.  Acetic acid, produced as a co-product to BDO, is often recycled throughout the process.

Maleic anhydride-based Process (Davy Process Technology)

Davy continued to simplify its maleic anhydride (MAN) esterification process and subsequent hydrogenation process, reducing complexity, equipment requirement, and overall capital costs.

Notable improvements are its transition into di-esterification of MAN with methanol to form DMM, followed by hydrogenation of DMM into DMS and through to BDO.  Additionally, DPT has integrated isolation methods for key derivatives GBL and THF.  These allow chemical producers to convert n-butane to three key derivative products that are core to the plastic, rubber, and fiber industries.

Propylene- based Process via Allyl Alcohol (Dairen)

Dairen Chemical Corporation (DCC) became the first local BDO producer to use its own developed technology for BDO production in Taiwan.  The original plant had a nameplate capacity of 30 000 tons per year and produced BDO via hydroformylation of allyl alcohol followed by hydrogenation to form BDO.

Propylene Oxide based Process (LyondellBasell)

LyondellBasell is one of the leading producers of BDO both in Europe and the U.S.; its facility in the Netherlands is one of the largest BDO production plants in Europe.  This plant (which belongs to a LyondellBasell subsidiary, Lyondell Chemie Nederland) was cited to be the largest single-train BDO plant to be built. It was also the second plant to utilize the original ARCO propylene oxide (PO) to BDO technology.

 New Technologies

Esterification followed by hydrogenolysis of succinic acid (Myriant/DPT)

Myriant partnered with Davy Process Technology, focusing on engineering a process to produce BDO (as well as THF and GBL derivatives) using biosuccinic acid produced by Myriant as a straight substitute of MAN in DPT’s process.  Nexant understands from Myriant that Davy has tested succinic acid that has been produced by Myriant and that the results have been positive.

Fermentation of sugard to BDO and THF (Genomatica)

Genomatica is producing BDO at its demonstration-scale facilities in Decatur, Illinois, U.S. – owned and operated by the food ingredients company, Tate & Lyle. Genomatica’s process uses an engineered microorganism for the direct fermentation of sugars to BDO and potentially THF via cyclization in an acidic fermentation medium.

Hydrogenation of succinic acid (BioAmber)  

BioAmber’s work focusing on the production of bio-based succinic acid has led to the development of a process to convert biosuccinic acid to BDO. BioAmber licensed DuPont's hydrogenation catalyst technology to make bio-BDO and bio-THF from biosuccinic acid.

Major Producers

At present 1,4-Butanediol is not produced in India and import of 1,4-Butanediol is around 3000 metric tonne per year. The major producers in the market are BASF SE (Germany), Dairen Chemicals (Taiwan), LyondellBasell Chemicals (The Netherlands), Shanxi Sanwei Group (China), International Specialty Products (U.S.), Invista (U.S.), and Mitsubishi Chemicals (Japan).

Source: NPCS Team



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·         Properties

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·         Uses & Applications


Ø  Market Study and Assessment

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  •    Land & Building

            Factory Land & Building

            Site Development Expenses

  •    Plant & Machinery

             Indigenous Machineries

            Other Machineries (Miscellaneous, Laboratory etc.)

  •    Other Fixed Assets

            Furniture & Fixtures

            Pre-operative and Preliminary Expenses

            Technical Knowhow

            Provision of Contingencies

  •   Working Capital Requirement Per Month

             Raw Material

            Packing Material

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           Consumable Store

  •   Overheads Required Per Month And Per Annum

         Utilities & Overheads (Power, Water and Fuel Expenses etc.)

             Royalty and Other Charges

            Selling and Distribution Expenses

  •    Salary and Wages

  •    Turnover Per Annum

  •   Share Capital

            Equity Capital

            Preference Share Capital


  •    Annexure 1:: Cost of Project and Means of Finance

  •    Annexure 2::  Profitability and Net Cash Accruals


                Expenses/Cost of Products/Services/Items

                Gross Profit

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                Total Cost of Sales

                Net Profit After Taxes

                Net Cash Accruals

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                Current Assets

                Gross Working. Capital

                Current Liabilities

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                Working Note for Calculation of Work-in-process

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  •    Annexure 5 :: Projected Balance Sheets

                ROI (Average of Fixed Assets)

                RONW (Average of Share Capital)

                ROI (Average of Total Assets)

  •    Annexure 6 :: Profitability ratios


                Earnings Per Share (EPS)


             Debt Equity Ratio

        Annexure 7   :: Break-Even Analysis

                Variable Cost & Expenses

                Semi-Var./Semi-Fixed Exp.

                Profit Volume Ratio (PVR)

                Fixed Expenses / Cost 


  •   Annexure 8 to 11:: Sensitivity Analysis-Price/Volume

            Resultant N.P.B.T

            Resultant D.S.C.R

   Resultant PV Ratio

   Resultant DER

  Resultant ROI

          Resultant BEP

  •    Annexure 12 :: Shareholding Pattern and Stake Status

        Equity Capital

        Preference Share Capital

  •   Annexure 13 :: Quantitative Details-Output/Sales/Stocks

        Determined Capacity P.A of Products/Services

        Achievable Efficiency/Yield % of Products/Services/Items 

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  •    Annexure 14 :: Product wise domestic Sales Realisation

  •    Annexure 15 :: Total Raw Material Cost

  •    Annexure 16 :: Raw Material Cost per unit

  •    Annexure 17 :: Total Lab & ETP Chemical Cost

  •    Annexure 18  :: Consumables, Store etc.,

  •    Annexure 19  :: Packing Material Cost

  •    Annexure 20  :: Packing Material Cost Per Unit

  •    Annexure 21 :: Employees Expenses

  •    Annexure 22 :: Fuel Expenses

  •    Annexure 23 :: Power/Electricity Expenses

  •    Annexure 24 :: Royalty & Other Charges

  •    Annexure 25 :: Repairs & Maintenance Exp.

  •    Annexure 26 :: Other Mfg. Expenses

  •    Annexure 27 :: Administration Expenses

  •    Annexure 28 :: Selling Expenses

  •    Annexure 29 :: Depreciation Charges – as per Books (Total)

  •   Annexure 30   :: Depreciation Charges – as per Books (P & M)

  •   Annexure 31   :: Depreciation Charges - As per IT Act WDV (Total)

  •   Annexure 32   :: Depreciation Charges - As per IT Act WDV (P & M)

  •   Annexure 33   :: Interest and Repayment - Term Loans

  •   Annexure 34   :: Tax on Profits

  •   Annexure 35   ::Projected Pay-Back Period And IRR