I.

Introduction

Nitric acid is an inorganic chemical with a variety of productive applications. It is a water-

soluble liquid that can range in color from clear to yellow and has a pungent acidic odor. Most of

the chemical is used as weak or industrial-grade nitric acid and tends to range from a 50% to 70%

concentration of nitric acid in water, but there are also the high concentrated or fuming nitric acid

that ranges from 85% to 100% in concentration (Dow Chemical Company, 2008). Depending upon

the concentrations of nitrogen dioxide, nitric acid is further classified as red fuming and white

fuming depending upon the color of the solution (The Chemical Company, 2014). Few of the nitric

acid based compounds are unstable and are generally sued in explosives while the stable

compounds are used in manufacturing of paints, dyes and pigments (Persistence Market Research,

2015).

Nitric acid is an intermediate good that is used in the production of nitrogen-based

fertilizers, explosives, and many specialty chemicals including polyurethane intermediates, dyes,

and pharmaceuticals. Because it is an intermediate good, nitric acid is valued because it is needed

to produce those products; thus, the demand for nitric acid is driven by the demand for the products

it is used to produce (Heller, Depro, Norris, & Lentz, 2012). Although there is a small direct market

for nitric acid, many producers share the role of supplier and consumer by using nitric acid

internally as an input to final market goods.

Ammonium Nitrate (AN) manufacturing is the largest application of nitric acid and

accounts for over three quarters of global nitric acid consumption (Deshmukh, 2015). There is

very limited merchant portion of nitric acid market and is mostly consumed confoundedly.

International trade is limited for nitric acid due to the corrosive nature of the product. Of

144
ammonium nitrate produced from nitric acid, the majority (86%) is used in the nitrogen-based

fertilizer industry, either as a direct fertilizer or in the production of alloy-fertilizer blends like urea

ammonium nitrate (UAN) (ICIS, 2008a). The balance of the ammonium nitrate derived from nitric

acid is used mainly as blasting and explosives agent in various applications. Nitric acid is also used

as an intermediate in manufacturing of toluene di-isocyanate (TDI) which is used in manufacturing

of polyurethane foams which are used in automotive, transpiration, carpet and furniture industry;

used as oxidizer in rocket propellants; and an intermediate in manufacturing of nitrobenzene and

nitro chlorobenzenes among others.

Industrial explosives are mainly used in the mining and mineral industries, the demand for

coal and basic metals drives the demand for these products (IBISWorld, 2009). Coal mining is the

main use for industrial explosives, accounting for around two-thirds of explosives consumption.

Stone quarrying and construction are also industries that consume the blasting agents and oxidizers

provided by the industry (IBISWorld, 2009). One key factor in maintaining the level of demand

for explosive products is the relative affordability of coal as a fuel source compared to its

alternatives. Rising construction activities as well significant growth of the mining industry is

expected to boost the demand for various materials such as coal, electricity and cement. This factor

is expected to drive the demand for industrial explosives which are to be used in the mining and

construction activities.

Global demand for nitric acid is projected to grow at 2.3% annually until 2018 based on its

apparent world consumption which increased annually by about 2% between 2008 and 2013,

according to IHS Market Research. Europe (Western, Central and Eastern), China and North

145
America dominate the market statistics accounted for over one third of global consumption.

Together, these regions accounted for about 82% of capacity, 84% of production, and 84% of

consumption in 2013. Since 1994, the largest increases in capacity, production and consumption

have occurred in China. The Agrium Inc., Apache Nitrogen Products, Bayer AG, Cherokee

Nitrogen, Coffeyville Resources, Dow Chemical Company, DuPont, Hercules, LyondellBasell

Industries, PCS Nitrogen, and Terra Industries are some of the key manufacturers present in the

global nitric acid market.

In the Philippines, Orica Nitrates Philippines, Inc. (ONPI) in Bacong, Negros Oriental is

the only processing plant that manufactures nitric acid. The Bacong nitric acid plant cannot

solitarily provide the annual consumption of the entire country which results to an importation of

US$1.784M in the year 2014 (DTI Philippines). Because of the growing demand for nitric acid,

the proposed plant will target the explosives industry albeit it is only the second major application

after nitrogen-based fertilizers, the global industry for industrial explosives has been witnessing

significant growth due to growth of its end user industries such as mining and construction

(Persistence Market Research, 2015). Furthermore, there have been recent studies of the

detrimental effects of nitrogen-based fertilizers on the environment: influence ammonia emission,

soil acidity, high nitrate leaching, and volatilization (Widjajanto, 1996) which led to the decision

to make the explosives industry the key market. In accordance with this, air will be used as the

primary source of nitrogen, and spent coffee grounds will be used as combustion fuel for the

processing of nitric acid.

146
 II. Nitric Acid Supply Data

Supply of nitric acid in the Philippines widely comes from local provider from Luzon and

the rest of the available nitric acid comes from global players around Asia, America and Europe.

The following table shows the annual local and global supply of nitric acid from year 2010 to year

2014, the average annual supply, and the annual percent increase.

Table 4.1
Annual Supply of Nitric Acid (2010 to 2014)

YEAR
Average
Region 2010 2011 2012 2013 2014
Supply

(in metric Tons)

I. Foreign Supply
Asia 6,134 5,550 3,938 3,590 3,505 4,543
America 0.118 0 0.2 0 1.2 0.506
Europe 3 11 0 0.164 268 57
TOTAL (Import) 6,137 5,561 3,938 3,590 3,774 4,600

(in metric Tons)

II. Local Supply

Orica Nitrates
19,754 19,754 19,754 19,754 19,754 19,754
Philippines, Inc.

TOTAL (Local) 19,754 19,754 19,754 19,754 19,754 19,754

TOTAL 25,891 25,315 23,692 23,344 23,528 24,354

(Import + local)
Percent increase (%) -- -1.53 -4.38 -0.98 0.52
Data from Philippine Statistics Authority as processed by DTI-KPD as of August 2015

147
 Table 4.1 shows the amount of nitric acid in metric ton supplied by local production and

importation from year 2010 to 2014. A total average of 4,600 metric tons from years 2010 to 2014

are imported into the country all over the world. An average of 4,543 metric tons comes from

Asian countries, 0.506 metric tons comes from America, and the remaining 57 tons are from

Europe. Locally, thirty-one thousand five hundred metric tons of nitric acid is produced by Orica

Nitrates Philippines, Inc.

Importation of nitric acid in the country decreased drastically from years 2010 to 2012 and

has increased slightly by the end of 2014. Local supply has a constant production for the last five

years. The overall supply data decreases for the last three years and increases after 2013.

148
 III. Nitric Acid Demand Data

Fertilizer, firearms and explosive, plastics and resins, and paintings industries are the main

application of nitric acid as raw material. The major demand for nitric acid mainly comes from

these four industries. Since there is only one local manufacturer of nitric acid in the Philippines,

all of the demand data for nitric acid is being satisfied by the capacity of this local manufacturer

and the importation of the said reagent. The table below shows the average annual demand of nitric

acid for different industries computed from the statistics from year 2002 to 2006.

Table 4.2
Consumption of Nitric Acid by Particular Industries in the Philippines

AVERAGE
AVERAGE
ANNNUAL
ANNUAL AVERAGE
NITRIC ACID
USAGE NITRIC
INDUSTRY CONSUMPTION % SHARE
2002-2006 ACID %
2002-2006
CONTENT
(metric Ton) (metric Ton)

Firearms and Explosives 97,573 16 15,612 50

Fertilizers 18,708 59 11,038 36

Plastics and Resins 57,681 4 2,526 8
Paints and Coatings 13,934 12 1,672 5
Others (Reagents,
526 21 109 1
Cleaning agents, etchants)
TOTAL 188,421 30,956 100
Source: AFP Modernization Program (2003); Directorate for Operations, Philippine National
Police; Office of the Press Secretary (2006) & FAO Stat (2014)

Table 4.2 shows the average consumption of nitric acid of the different industries and the

local company that utilizes it. According to PNPs Firearms and Explosives Division (FED), the

explosives section has an overall average of 97,573 metric tons consumed annually.

149
(http://library.med.utah.edu/WebPath/TUTORIAL/GUNS/GUNBLST.html) The average nitric

acid content in the said amount is 16% by weight of the overall product or 15,612 metric tons

(Ledgard, 2006 and PNP FED.). This covers the 50% market shares of the total average nitric acid

playing in the market.

The fertilizer industry produces 18,708 metric tons utilizes 59% nitric acid which yields

into 11,038 metric tons average nitric acid consumption from year 2002 to 2006 (Food and

Agriculture Organization of United Nations, 2002). A market shares of 41.91% was accounted.

The leading fertilizer producers in the country are Philippine Phosphate Fertilizer Corporation and

Soiltech Agricultural Products.

Other industries also play a conservative part in the Nitric acid market. Plastics and resins

industries uses 57,681 metric tons, 4% of which is nitric acid, amounting to 2,526 metric tons

annually, having 8% of the market shares. Also, Paints and coatings industries annually consumes

13,934 metric tons utilizes 12% nitric acid yielding 1,672 metric tons nitric acid which takes 5%

of the market shares. Others, which includes the use of nitric acid as cleaning agents, etchants,

analytical reagents, woodworking, etc. uses 526 metric tons, 21% is nitric acid, amounting to 109

metric tons, which take 1% of the market shares.

150
 IV. Nitric Acid Supply and Demand Analysis

The data of the annual average supply and the annual average demand of nitric acid in

the Philippines is shown in the table below.

Table 4.3
Annual Average Supply vs. Annual Average Demand Data of Nitric Acid in the Philippines
(in Metric tons)

Annual Average Demand for

Annual Average Supply Annual Average Demand
Firearms and Explosives
24, 354 MT 30,956 MT 15,612 MT

Table 4.3 shows that the local demand is 6,602 metric tons greater than the supply in the

country. The annual average demand accounts to 30,956 metric tons. Fifty percent (50%) of this

amount, which is 15,612 metric tons, is consumed by the firearms and explosives industry, as

discussed from Table 4.2. This is the target market of the proposed plant. Therefore, the

construction of the plant producing an explosive grade of nitric acid from air using spent coffee

grounds as combustion fuel is feasible in order to compensate the insufficiency of supply of nitric

acid locally.

151
 V. Raw Materials Availability

Air and water, the major raw materials in the process, are very abundant in the Philippines.

Thus, there will be no problem in the availability of the two major raw materials. However, spent

coffee grounds as the combustion fuel would act as the limiting reactant for the process. The spent

coffee grounds will be used as combustion fuel in the production of nitric acid. The availability of

combustion material is based on the annual consumption of coffee in the Philippines. The quantity

of nitric acid which we will be producing will be dependent on the availability of spent coffee

grounds.

A. Coffee Beans Production

The succeeding table, acquired from International Coffee Consumption, shows the annual

production of instant coffee in the Philippines by the different manufacturers from 2010 to 2014.

Table 4.4
Annual Production of Instant Coffee in the Philippines

Year Average Production Coffee

Instant Coffee from Beans
Manufacturer 2010 2011 2012 2013 2014 Coffee Beans Used

Metric Tons

Nescafe 7,327 7,797 10,101 12,157 10,377 9,552 1,910

URC 2,118 2,661 3,447 4,149 3,541 3,183 636

SMC 1,524 1,915 2,481 2,986 2,549 2,291 458

Kopiko 1,308 1,644 2,130 2,563 2,188 1,967 393

Others 1,214 1,525 1,976 2,378 2,030 1,825 365

TOTAL 13,491 15,542 20,135 24,233 20,685 18,818 3,762

(From International Coffee Consumption)

152
 According to International Coffee Consumption in the Philippines, an average of 1,910

metric tons of coffee beans was used by Nescafe Philippines for the production of instant coffee.

This amount accounts for more than half of 3,762 metric tons of the total coffee beans used by

instant coffee manufacturers.

B. Availability of Spent Coffee Grounds

Spent coffee grounds is a waste from the coffee beans used in producing instant coffee.

The table below shows the coffee beans used by the instant coffee manufacturers, the equivalent

spent coffee ground from the coffee beans, and the available amount of spent coffee grounds for

the production of nitric acid for our proposed plant.

Table 4.5
Available Spent Coffee Grounds

HNO3
Avail- Produced
Spent Wasted and As Other
Coffee able from Air,
Coffee Non- Renewable user of
Beans SCG using SCG as
Manufacturer Grounds recoverable Energy SCG
Used to use combustion
fuel

Metric Tons
Nescafe 1,910 1,605 80 428 802 294 14,840
URC 636 535 27 143 267 97 4,895
SMC 458 384 19 103 192 70 3,530
Kopiko 393 330 17 88 165 60 3,028
Others 365 307 15 82 154 57 2,877
TOTAL 3,762 3,161 158 844 1,580 578 29,170
*Coffee Beans Used= 0.20 * Average Production
**Spent Coffee Grounds = 0.84 * Coffee Beans Used
*** Wasted and Non-recoverable = 0.05 * Spent Coffee Grounds
****As Renewable Energy = 0.267 * Spent Coffee Grounds
*****Other user of SPG= 0.50 * Spent Coffee Grounds

153
 Based on table 4.5, the annual coffee beans used (3,762 MT) in the production of instant

coffee mix can produce a waste product in the form of spent coffee grounds amounting to 3,161

MT annually. Out of the total available waste material (3,161 MT SCG), roughly 18% (578 MT)

can only be used for our proposed plants need. On an annual basis, this quantity can produce

32,9170 MT of nitric acid.

VI. Conclusion

The raw materials availability is the only predicting factor to determine our proposed

plants annual capacity. These raw materials (spent coffee grounds) to be used as a combustion

fuel are limited resources because it is dependent on the waste material being produced by coffee

manufacturers. Taking this into consideration, our plant capacity will be limited to an annual

amount of 578 MT spent coffee grounds available as combustion fuel for the production of 29,170

MT of nitric acid.

The proposed annual plant capacity is 12,000 MT which is roughly 40% of the total nitric

acid produced from air using spent coffee grounds as combustion fuel.

Table 4.6
Summary of Plant Operation

Plant Capacity 12,000 MT/yr

Production Rate 40,000 kg/day
No. of Working Days 300 days/yr
No. of Working Hours 20 hours/day
Product Specification Industrial Grade, 60% min

154