The next step of excellence in production- Integrated optimization of Yield, Energy and Environment (YEE)

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1 The next step of excellence in production- Integrated optimization of Yield, Energy and Environment (YEE) Public Dieter Regnat Clariant Excellence, CPS YEE

2 2 Public, Manufacturing Conference Berlin We_connect Table of Contents Clariant key facts and Clariant Excellence YEE set up and tool box Case study 1 Case study 2 Case study 3

3 3 Clariant key facts and Clariant Excellence Public Dieter Regnat Clariant Excellence, CPS YEE

4 4 Clariant - A global leader for specialty chemicals Clariant focuses on creating value by investing in future profitable and sustainable growth. KEY FACTS Continuing operations Sales 2012 (CHF m) 6038 EBITDA 2012 (CHF m) Margin before exceptionals 802 More than 100 Group companies world-wide End employees Production Sites in 76 countries 7 Business Units

5 5 Overview Business Units after divestment of four Business Units in 2014 ADDITIVES CATALYSIS & ENERGY MASTERBATCHES FUNCTIONAL MATERIALS INDUSTRIAL & CONSUMER SPECIALTIES OIL & MINING SERVICES PIGMENTS

6 6 Clariant History Portfolio management

7 7 Clariant ssustainability policy and ISO Energy Management System are driving YEE Source: 934E18EA62C1257A63002B168E

8 8 Clariant Excellence a philosophy of continuous improvement YEE New work steam in Operational Excellence started in 2012 YEE

9 9 Public, Manufacturing Conference Berlin We_connect Dieter Regnat YEE set up and tool box Public Dieter Regnat Clariant Excellence, CPS YEE

10 10 Public, Manufacturing Conference Berlin We_connect Dieter Regnat YEE work streamintegrates internal and external expertise for Yield, Energy, Environment diagnoses External Experts R&D Business Unit YEE Process Development Competence Center Energy Corporate Sustainability Procurement

11 11 YEE process toolbox solutions Unstable Process / Yield Loss Measure No Process data available Success Lean Sigma Tools Yes Yes Improvement ideas/feasibility checks Improved No Toolbox Solutions Consider Process Design Change Diagnosis Area Optimization YEE

12 12 Combining data mining and engineering expertise to reveal optimization potentials Identify key drivers for best practice production Compare performance of similar productions Batch profile Data mining Analysis

13 13 Main elements of yield diagnostic phase main end products Yield loss bridge Detailed analysis of each loss High-level Area Optimization planning Rank and select improvement ideas Source: CPS YEE team

14 14 Public, Manufacturing Conference Berlin We_connect Dieter Regnat Case study 1 Public Dieter Regnat Clariant Excellence, CPS YEE

15 15 High volume continuous production unit offered sizeable opportunity quantified by loss bridges Yield Energy Percent selectivity Total in scope: ~6% CHFmillion Total in scope: 13 Mio >30% <25 > Max. Theorical Yield Design losses Best demonstrated practice Operational losses Actual yield reactor Improved Plant Design losses Best Operational Current demonstrated practice losses energy consumption Value capturing 1% improvement 1 CHFmillion 0.4 CHFmillion Source: CPS Y&EE team

16 16 Overall optimization focused on gross profit impacted by yield, consumed and generated enery Source: CPS Y&EE team

17 17 Idea generation in yield is driven by data intensive analytical approach General steps Identify basic function based on multiple dimensions Identify best demonstrated practice (BDP) Identify key questions, drivers and discussion topics for idea generation Selectivity as function of time and throughput; >30'000 data points analyzed: ~10 key drivers Selectivity difference between BDP and current average performance Several regions with different speeds of declining yield Region A: Steady Selectivity of reactor state operation Region B: Cause of disturbance to be discusses Region D: Steeper decline than A. Why? Region C: Process control intervention lead to recovery Region E: Large variability at low throughput Source: CPS Y&EE team

18 18 Public, Manufacturing Conference Berlin We_connect Dieter Regnat Energy loss bridge shows significant potential, especially in steam and static electricity changes R 1 R 2

19 19 Public, Manufacturing Conference Berlin We_connect Dieter Regnat Main improvements realized resulting in savings of more than 10 million CHF per year Yield Break even point for lifetime of promoter identified. Promoter change accordingly. Reactor control tool installed to support operators decision for early adjustments of process parameters Daily performance management introduced Energy Improved steam generation by adaptation of heat exchanger surfaces Increase storage capacity to ensure smoother and more regular production avoid ups and downs Energy monitor installed to track and monitor energy consumption and generation visual management Daily performance management introduced

20 20 Public, Manufacturing Conference Berlin We_connect Dieter Regnat Case study 2 Public Dieter Regnat Clariant Excellence, CPS YEE

21 21 Flow Chart of wax production General formula of Wax Esters (i.e. main components of crude wax): CH3 (CH 2 ) (22 28) CO O (CH 2 ) (21 29) CH 3 Crude wax containing 20% impurities Partial removal of impurities (10%) Extraction Additional removal of impurities - cleavage of ester - oxidation of fatty alcohol Oxidation Final step Acids (after oxidation) Cr III Cr VI Chromic acid Electrolysis Finished good

22 Theoretical limit in the chromic acid electrolysis is significant below actual - built up of energy loss bridge kwh/100kgcro theoretical limit Trafo losses contact losses ions (Al, Fe,..) membranes Plant limit Anode corrosion Org. Impurities membrane pockets temperature residual Cr2+ current intensity other impurities actual consumption 22 Design losses Operational losses

23 23 Holistic economical optimum degree of extraction is at 4-6% remaining impurities Specific costs for oxidation are higher than for extraction. Energy costs for regeneration of chromic acid need to be balanced with Loss of material by more intense extraction Higher disposal costs Operational costs for extraction, e. g. cooling costs, solvent recycling

24 24 Main improvements realized resulting in savings of up to 2 million CHF per year Optimum degree of extraction Improve performance of membranes in electrolysis Installation of an energy monitor for Daily performance management to reach BDP (best demonstrated practice) of specific electrical power consumption Early identification of membrane failure Optimization of electrode and membrane life cycle management

25 25 Public, Manufacturing Conference Berlin We_connect Dieter Regnat Case study 3 Public Dieter Regnat Clariant Excellence, CPS YEE

26 26 5 step pigment production at toll manufacturer diagnosed Alkylation Nitration Reduction Coupling Ring closure to pigment

27 27 Yield loss bridge before optimization: 70% yield, but yield of individual steps and loss drivers unknown ?? ? 70 Impurities raw mat. Theoretical Limit Alkylation Nitration Reduction Coupling Ring closure Pigment

28 28 Pigment process diagnosis lead to thorough understanding of the whole process Process knowledge and yield information were very poor All 5 steps needed to be diagnosed; yield of individual steps were not exactly known, also because there is no isolation up to the final step. Systematic, step-by-step process analysis using deep dive analytics directed to complete understanding of loss drivers Loss bridge has been checked and corrected starting from raw materials to the end product Understanding of loss drivers is creating improvement ideas and savings Diagnosis lead to a thorough understanding of the whole process and a fundamental new knowledge basis

29 29 Main improvements realized resulting in a yield improvement of 11% Alkylation: Installation of In-process-control and addition of a solubilizer to facilitate heterogeneous reaction Nitration: Installation of In-process-control and adjustment of stoichiometry Reduction: Change of reducing agent to reduce raw material spend Coupling: Adaptation of reaction condition to increase conversion rate Impurities Carbazol Theoretical Limit Alkylation Nitration Reduction Coupling Ring closure Pigment

30 Thank you QUESTIONS Public Dieter Regnat Clariant Excellence, CPS YEE