ETI HOLDING INC.

GENERAL MANAGEMENT

PRE-FEASIBILITY REPORT SUMMARIES OF

BORON CARBIDE BORON NITRIDE FERROBORON FRIT AND GLAZE TEXTILE GLASS FIBRE ZINC BORATE

PLANNING & DATA PROCESSING DEPARTMENT

May 2003 ANKARA

CONTENTS
PAGE NO 1. BORON CARB DE ..............................................................................................................1 1.1. APPLICATIONS .............................................................................................................1 1.2. PRODUCTION CAPACITY AND MARKET PRICES.................................................2 1.3. PRE-FEAS B L TY OF THE BORON CARB DE PLANT (PROPOSED) ............2 2. BORON NITRIDE ...............................................................................................................5 2.1. HEXAGONAL BORON NITRIDE, h-BN......................................................................5 2.2. CUBIC BORON NITRIDE , c-BN ..................................................................................6 2.3. CONSUMPTION .............................................................................................................6 2.4. PRICE ..............................................................................................................................6 2.5. PRE-FEAS B L TY OF THE BORON NITRIDE PLANT (PROPOSED) .................6 3. FERROBORON ...................................................................................................................8 3.1. PROPERTIES AND PRODUCTION TECHNOLOGY OF FERRO BORON ..............8 3.2. APPLICATIONS .............................................................................................................8 3.3. WORLD CONSUMPTION AND PRICES .....................................................................8 3.4. PRODUCERS OVER THE WORLD. .............................................................................9 3.5. FINANCIAL HIGHLIGHTS OF THE PROPOSED NVESTMENT ............................9 4. FRIT AND GLAZE ............................................................................................................10 4.1. FRIT PRODUCERS IN EUROPE AND TURKEY......................................................10 4.2. EXECUTIVE SUMMARY TABLE..............................................................................12 5. TEXTILE GLASS FIBERS...............................................................................................13 5.1. APPLICATIONS ...........................................................................................................13 5.2. PRODUCTION CAPACITY AND MARKET PRICES...............................................14 5.3. PRE-FEASIBILITY OF THE TEXTILE GLASS FIBERS PLANT (PROPOSED) ...16 6. ZINC BORATE ..................................................................................................................19 6.1. APPLICATIONS ...........................................................................................................19 6.2. PRODUCTION CAPACITY AND MARKET PRICES...............................................20 6.3. PRE-FEASIBILITY OF THE ZINC BORATE PLANT (PROPOSED).......................22

1.BORON CARB DE
Boron Carbide, with the chemical formula (B4C) , is produced by the reduction of boric acid with finely divided carbon in an electric furnace at a temperature between 1400-2300 OC . Alternatively boric oxide may be reduced with carbon and magnesium at temperature between 1400-1800 OC in an atmosphere of hydrogen. Followed by washing with hydrochloric acid to remove magnesia , and boiling with hydroufluoric acid and nitric acid to achieve purification. After diamond and c-BN , B4C is the third hardest material known to science. In other words , B4C is the hardest material in terms of quantity available. With the average grain size of 10
B

the main characteristics of B4C are good electrical conductivity , high melting point of 2450
O

C , low density (2,52 g/cm3) , high comprehensive strength and chemical inertia . which

enables it to be used in a wide range of industrial applications including mechanical , chemical and nuclear uses. 1.1. APPLICATIONS Abrasives Due to its high hardness, boron carbide powder is used as an abrasive in polishing and lapping applications, and also as a loose abrasive in cutting applications such as water jet cutting. It can also be used for dressing diamond tools. Nozzles The extreme hardness of boron carbide gives it excellent wear and abrasion resistance and as a consequence it finds application as nozzles for slurry pumping, grit blasting and in water jet cutters Nuclear applications Its ability to absorb neutrons without forming long lived radio-nuclides make the material attractive as an absorbent for neutron radiation arising in nuclear power plants. Nuclear applications of boron carbide include shielding, and control rod and shut down pellets. Ballistic Armour Boron carbide, in conjunction with other materials also finds use as ballistic armour (including body or personal armour) where the combination of high hardness, high elastic modulus, and low density give the material an exceptionally high specific stopping power to defeat high velocity projectiles. Other Applications Other applications include ceramic tooling dies, precision toll parts, evaporating boats for materials testing and mortars and pestles. 1

1.2. PRODUCTION CAPACITY AND MARKET PRICES No statistical figures are available on the production levels of B4C. But it would not be wrong to say according to the available statistics that total annual production is estimated as around 1.000 m.t./year. Depending on the application area, B4C prices vary between 10-40 $/kg. Table 1 - Import statistics of B4C (2001) Country Germany France UK Japan* USA Quantity (mt) 167 69 64 317 282 Value (1000 US$) 2.243 555 804 12.587 6.870 Average prices ($/kg) 13 8 12,5 40 24

(Source: The economics of boron ,2002 and USGS Minerals yearbook, 2001) import statistics of Japan includes niobium and tantalium carbides as well.

1.3. PRE-FEAS B L TY OF THE BORON CARB DE PLANT (PROPOSED) 1.3.1. Production process of boron carbide The production process of B4C is carbothermic reduction of boric oxide in an electric arc furnace: 2B2O3 + 7C B4C + 6CO (1500 2500 0C)

The process is so strongly endothermic. The starting material is an intimate mixture of boric oxide and petroleum coke. In addition to boron carbide ,large amount of carbon monoxide are generated.

1.3.2. Cost of 1 ton of B4C produced Unit cost Consumption INPUTS amount to produce 1 ton of boron carbide Unit Of inputs (US Dollar) Cost of of carbide ($) Boron oxide Petroleum coke Electricity Wages Depreciation Other expenses TOTAL 3,0 1,5 9400 Ton Ton Kwh 2000 125 0,08 6000 188 752 4200 2574 4000 17.714 33,9 1,1 4,2 23,7 14,5 22,6 100,0 amount to %

inputs

produce 1 ton Boron

1.3.3. Financial highlights of the proposed investment PROJECT NAME PROJECT STATUS PROJE JUSTIFICATION PRODUCT CAPACITY Boron Carbide Plant New Investment Export Boron Carbide ( B4C) 50 tons/year

Investment with allowance ROJECT TOTAL US$ Fixed Capital Investment Operating Capital INVESTMENT PERIOD (Year) Economic Life (Year) INCOME AND EXPENSE STATUS Annual Sales ($ US) Annual Operating cost ($ US) Annual Net Profit ($ US) ECONOM C ANALYSIS Internal Rate of Return Payback period Net Present Value ($ US) Profit / Cost Rate 30,4 1,87 a 2,5 Million 1,85 1,500 Million 399.000 609.000 1.619.000 1.594.000 25.000 3 20

Investment without allowance 1.619.000 1.594.000 25.000 3 20

1,500 Million 399.000 609.000

28 1,87 a 2,4 Million 1,85

2. BORON NITRIDE
Boron nitride is a refractory compound which has good thermal , electrical , and chemical properties. There are two crystalline forms of boron nitride which are most extensively used. 2.1. HEXAGONAL BORON NITRIDE, h-BN Hexagonal form with a graphite-like layered structure, sometimes called white graphite ,with a theoretical density of 2.27 g/cm3. It is a white, impervious, non-toxic and lubricious material. 2.1.1. Properties The unique properties of hexagonal boron nitride can be given as follows; A theoretical density of 2.27 g/cm3 which is the lowest value of the ceramic materials. High temperature stability ;h-BN does not display a normal melting behaviour but a temperature of 2600 0C is given as the melting point. However it lost its stability at 1000
0

C under air , at 2200 0C under argon atmosphere and at 2400 0C under nitrogen t is chemically inert against wetting by glasses, slags and molten oxides; cryolite and

atmosphere. fused salts; most molten metals including aluminum; and resists against the attack of mineral acids. Although ,its resistance to moisture is not very good , this problem can be eliminated by producing BN with the addition of SiO2 and Ca. An excellent lubricating ability compared with the other solid lubricants; h-BN keeps its lubricating ability up to 900 0C whereas, molybdenum disulphide burns away at 350 0C and graphite at 600 0C .

Unlike graphite , h-BN is an electrically non-conducting material which is useful as insulator at lower temperatures , but the electrical resistivity decreases at higher temperatures which provides the opprtunity of using hexagonal boron nitride as an instrinsic semi-conductor at high temperature applications. Hexagonal boron nitride has good thermal cunductivity, low thermal expansion. These provides a good thermal shock resistance to the h-BN. Easy machinability of the dense boron nitride parts . 2.1.2. Aplications With these unique properties , hexagonal boron nitride has a wide application area in chemistry , metalurgy, high-temperature technology ,electrotechnics and electrons. h-BN can be used in powder form , in dense hot pressed form as a constituent additive in metal and 5

ceramic matrix composites. Boron nitride can be used as a powder additive in plastics for reducing friction , increasing thermal conductivity, decreasing thermal expansion and increasing use temperatures. Another extensive usage for h-BN powders is in the production of cubic boron nitride c-BN, which is the second hardest material after diamond as the initial material. 2.1.3. Production h-BN is usually produced by the action of nitrogen on borax/carbon mixture at temperatures of between 1450 oC and 1650 oC . An alternative method is the reaction of boric oxide and ammonia but this is much less common. Pressure sintering is the most commonly method to manufacture h-BN products. 2.2. CUBIC BORON NITRIDE , c-BN Cubic boron nitride is the hardest substance known after diamond . it is prepared by heating the h-BN to between 1400-1700 0 c under high pressure. Unlike diamond , however, c-BN has excellent heat resistance ,remaining stable up to cutting tool. 2.3. CONSUMPTION Annual world consumption of boron nitride is about 1000 tons. This amount makes a total value of 55 million Dollars. 2.4. PRICE The price is changing according to the quality and the amount sold. These days refractory grade boron nitride is sold at a price of nearly 50.000 US $/ton. The prices of the ceramic quality and high quality boron nitride are between 52.000-66.000 and 200.000-400.000 $/ton respectively 2.5. PRE-FEAS B L TY OF THE BORON NITRIDE PLANT (PROPOSED) 2.5.1. Production process of Hexagonal boron nitride Boron oxide and activated charcoal are mixed with acetone, then spherical pellets with a 50 mm diameters are prepared. The pellets are placed into an electrically heated furnace while nitrogen gas is flowed through at a rate of 0,6 m3/min . After keeping the pellets in the furnace for two hours at 1500 oC , hexagonal boron nitride ,h(BN), is formed according to the reaction below. B2O3 + 3C + N2
B

1370

C , whereas diamond reverts to

carbon at 815 o C. Due to its excellent thermal conductivity , like diamond , c-BN is used as

2BN + 3CO 6

(1500 0C)

Boron nitride, containing some unreacted B2O3 and the ash of the activated charcoal is removed from the furnace and ground with a grinder for the leaching process. Unreacted boron oxide and ash are removed from the product by 1:1 HCL solution. The leach solution is stirred for ten minutes then, vacuum filtered and dried ,so a refractory quality (% BN =9296) boron nitride has been produced. 2.5.2. General information about the project A hexagonal boron nitride plant at an annual capacity of 150 tons has been proposed. This capacity is the 15 % of the world consumption. In order to take larger share from the world market , the price of the product will be kept relatively lower than the world price. The fixed investment of the plant is 1.490.000 US Dollars. At the full operating rate , the cost of 1 ton boron nitride is estimated as 12.666 US $. The main inputs of the cost are boron oxide and personnel expenses . They are 33,2 % and 28.8 % respectively. 2.5.3. Cost of 1 ton of BN produced Unit cost Consumption INPUTS amount to produce 1 ton of boron carbide
Boron oxide Activated Charcoal Nitrogen gas Acetone Hydrochloric acid Electricity Wages Depreciation Other expenses TOTAL 2,10 0,75 448 0,31 0,98 3560 Ton Ton M
3

Cost of of

amount to %

Of inputs Unit (US Dollar)

inputs

produce 1 ton Boron ($) carbide

2000 125 4,67 1080 154 0,08

4200 93,8 2092,2 337,8 150,9 284,8 3648 810,3 1047,6 12666

33,2 0,7 16,5 2,7 1,2 2,2 28,8 6,4 8,3 100,0

Ton Ton Kwh

2.5.4. The results of some economic analysis of the project Net present value .................. : 34.424.540 US $ Break-even point .................. : 10,6 % Payback period ..................... : 1 year Internal rate of return............ : 90 % 7

3. FERROBORON
3.1. PROPERTIES AND PRODUCTION TECHNOLOGY OF FERRO BORON Ferro Boron is an iron-boron alloy containing 10-20 percent of boron by weight. It is a glossy silky substance. However, if it remains in humid air for long, ferro boron leaves its glossy silky colour and it is transformed into a dull grey containing red spots. Ferro boron was first manufactured in 1893 by Henri Moissan in a carbon lined and single phase electric arc furnace. Today, commercial production is made by two main processes. These are carbothermic reaction and aluminothermic reaction. Carbothermic production of ferro boron is conducted in electrical arc furnaces. The raw materials fed into the arc furnace are boric acid, carbon and iron powder. Aluminothermic production of ferro boron is conducted in Ladles. The raw materials fed into the ladle are boric acid, iron ore, aluminium powder and sometimes magnesium powder. 3.2. APPLICATIONS Ferro boron is used in the manufacture of steel, cast iron, permanent magnets, and amorphous metals. More than 50 percent of the ferro boron produced over the world is consumed in steel industry. For instance, 1715 metric tons of ferro boron was consumed in USA in 1999. Of this amount, 1224 metric tons was used for steel production. Boron element is given to the steel by adding ferro boron into molten metal in a ladle. The existence of very small amounts of boron in the steel increases the hardenability of the steel and provides precipitation hardening. Boron is added to the compositions of some stainless steels, micro alloyed and low alloyed steels, and some carbon steels produced for certain purposes. Boron is added in the rates of 0.0005-0.003 % into some carbon steels, micro alloyed and low alloyed steels. Ferro boron consumed in the production of Nd-Fe-B permanent magnets accounts for 10 % of the total world consumption of ferro boron. This insdustry uses about 1000 metric tons of ferro boron annually. 3.3. WORLD CONSUMPTION AND PRICES The world consumption of ferro boron was 8563 metric tons in 1998. Of this total, 1885 tons was consumed in Japan, 1746 tons was consumed in the USA, 1711 tons was consumed in the European Union 12 countries, 1412 tons was consumed in China, and the remaining was consumed in other countries. 8

Within Europe, the price of ferro boron originated from Europe was US$ 1800 per metric ton in July 2002. This price is valid for a lot size of 10 tons. The product contains 17-20 % boron, 0.5 % C, 0.2 % aluminium and 0.5 % silicon. If it is estimated that the average price over the world is US$ 2300 per ton, the world market of ferro boron becomes 20 million US Dollars per year. 3.4. PRODUCERS OVER THE WORLD. Through the literature survey, it has been found out that ferro boron is produced by 28 companies over the world. The capacities of only 8 companies have been found out. Total capacity of the 8 companies is 29500 m.t. per year. 3.5. FINANCIAL HIGHLIGHTS OF THE PROPOSED NVESTMENT It is proposed that a ferro boron plant with an annual capacity of 4.000 m.t. should be installed in Turkey. The amount of the fixed investment is 4 million US$. It is planned that the product will contain 18 % B, 1.5 % Si, 0.9 % C. If the cost analysis are based on the current prices of the iputs, then the following financial results are obtained. (Note that the electricity price is 8 Cent per kwh). Operating cost becomes 1473 US$/ton at the full operating rate. Electricity accounts for 40 % of this cost, while boric acid accounts for 34 %. It appears possible that the ferro boron will be sold in world markets at a price of 1750 US$/metric ton. Net Present Value of the project is US$ 5.400.000. Internal Rate of Return is 14.5 %, cut off rate is 39 %, pay back period is 9 years. If the electricity price is reduced to 6 Cent per kwh, then the financial results become as following: Net present value Internal Rate of Return Pay back period Break-even point : 9.111.000 US$ : % 19.5 : 6 years :%29

4. FRIT AND GLAZE

Sr (glaze) means unknown in Turkish folk language, and also indicates the glass that covers ceramic with a tiny layer. In technical meaning, glaze is worked at high temperatures, and is tiny glass layer who protect ceramic material from physical and chemical factors with an additional aim of adding beauty to external view. Glaze is combined from soluble and non-soluble materials in water. Since soluble material gives some problems which can not be controlled on surface of ceramics, it is made glass or frit with the aim of making it non-soluble. In application, frit is used with either itself or other non-soluble, assistant materials (colouring agent, floating agent etc.) The composition of frit is quite variable according to application conditions. 80.000 combinations of frit is existed. Glaze includes colouring agents in frits and is used in ceramic tiles, tableware and sanitaryware. Frit is a glass by requirement of its properties and the problems existing in the glass industry can be seen in this sector. With this reason frit requires a different specialization in both glass and ceramic sectors. Frit is an imprtant cost factor in the production of ceramic tile materials but in quality, in development of new products and in harmony with technology, its functions is more than its cost. 4.1. FRIT PRODUCERS IN EUROPE AND TURKEY In Europe, especially in Italy and Spain who are in the leader position of the ceramic industry, the sector is closely appraised with a professional manner and after 1940s, the companies which were specialized in frit, glaze and paint were grown. These firms, with the power of its experts, not only produced different type of frits wanted by customers and, in parallel, ceramic paints and other special products but also made research in name of them, developed new products, designed, consequently came into a strategic position that governs the whole market. In figures of 1998, Spain leads, in frit production, with an income of 542 million USD, and Italy takes second place with an income of 490 million USD. If the fact that, between 1998 and 2000, the production of ceramic layer material is increased 8.6 % in taly and 10.1 % in Spain, is considered, the total income mentioned above will be, with an assumption of the rate of %9, 1.12 billion USD. 10 Currently, it is stated that excess of

The situation is very different in Turkey. In our country the beginning of ceramic covering material dates back to 1957 with anakkale Seramik Fabrikalar. Earlier, the investments which were self sufficient as in many areas had been made to the location close to raw materials place. (an, S t, Bilecik, Eski ehir, Ktahya, U ak) Generally, ceramic covering materials consist of 80 90 % of the ceramic sector. The frit which is used for ceramic covering material is ceramic frit. According to the information obtained, the most produced frit is also ceramic frit. Turkey Ceramic and enamel frit capacity Ceramic Frit ................... 203.000 Ton/year. Enamel Frit ...................... Source : Serham But the capacity utilization rate is low. In Turkey, of the production of ceramic covering material, 53 % is ceramic ground tiles, 42 % is ceramic wall tiles and 5 % is granite. (Source DPT) In Turkey, according to Year 2001 figures, approximately 100.000 ton of ceramic frit is produced. Existing ceramic frit capacity is 203.000 ton/ year. Obviously, there is an excess capacity in the sector. But the quality problems are still pertaining, the need for the quality production is existed. With this reason, taking a sample capacity, we, undersigned, prepared a pre-feasibility report. 25.000 Ton/year Total ................................ : 228.000 Ton/year

11

4.2. EXECUTIVE SUMMARY TABLE

PROJECT NAME PROJECT TYPE PROJECT AIM PRODUCT CAPACITY Frit and Glaze Plant New Investment Export and production of high quality product Frit and Glaze 60.000 tons/year (51.000 tons/year Frit+10.000 tons/year Glaze) Investment TOTAL INVESTMENT COST (US$) Fixed Capital Investment (US $) Working Capital (US $) Investment Period ECONOMIC LIFE (Year) CASH FLOW Annual Reveneus (US $) Annual Expenses (US $) Annual Gross Profit(US $) Annual Net Profit (US $) INVESTMENT ANALYSIS Internal Rate of Return Payback Period Net Present Value (US $) Profit/Cost rate Annual Foreign Currency Income (US $) 14,4 3,69 years 6,4 million US $ 1,27 33 million US $ 13,2 3,69 years 4,7 million US $ 1,27 33 million US $ 33,000 million US $ 25,785 million US $ 8,688 million US $ 3,740 million US $ 33,000 million US $ 25,785 million US $ 8,688 million US $ 3,740 million US $ 19,288 million US $ 17,996 million US $ 1,292 million US $ 3 years 20 years With Investment Without Incentive(Allowance) Incentive(Allowance) 19,288 million US $ 17,996 million US $ 1,292 million US $ 3 years 20 years

12

5. TEXTILE GLASS FIBERS

Glass fibers that can be processed by conventional techniques such as weaving are called textile glass fibers. Glass fibers are formed continuously from a melt in special fiber-forming furnaces. Different glass formulations can be used in production of textile glass fibers. But the most widely used is E-glass since its use minimizes the number of strand breaks that occur during manufacturing process. E-glass fibers are encountered in all areas of industry and everyday life, especially in combination with plastics. E-glass is an alumina-borosilicate glass with a mass fraction of alkali lower than 2%. The addition of boron to this glass, either as colemanite or boric acid, promotes ease of melting. B2O3 content of E-glass varies between 5 and 10%. E-glass resists moisture and results in products with excellent electrical properties. Textile glass fibers are distinguished by particularly high tensile- and impact- strength, light weight, high resistance to chemical attack and low cost. Measurements on filaments drawn directly from the bushing yield values of 3400 MPa for E-glass. The modulus of elasticity is 1/3 that of steel and quite adequate for many applications. The density is 2,6 g/cm3, which is high compared to plastics. Textile glass fibers have a good resistance to weathering and heat, non-flammability, good dielectric properties, low thermal expansion, and, depending on the type of textile glass, good resistance to corrosion. The properties of textile glass fibers, to a great extend, determine the properties of the composites. 5.1. APPLICATIONS One of the most important applications of textile glass fibers is reinforced plastics, especially in reinforced thermosetting polyester resins. Textile glass fibers have a wide range of application areas. Glass fibers are used both for textile purposes, e.g. decoration, insulation as well as for reinforcement of a matrix to form a composite. Matrices can be plastic (both thermosetting and thermoplastic), rubber, cement, gypsum and other materials. The most important consumption sectors for the textile glass fibers are automotive and transport sectors. Glass fiber reinforced thermosetting resins are used in passenger cars primarily for body parts (hoods, tail gates) and for structural elements (bumpers, bumper supports). Glass fiber reinforced thermoplastics are used for operating parts within the engine compartments, noise suppressors below the engine, hubcaps.

13

Electronic industry is the second most important consumption sector for the textile glass fibers. In electronic industry, glass fibers are used in circuit boards and for insulation purposes. The following other applications are also of importance: Thermal insulation and heat protection (an asbestos replacement) with woven glass fabrics of glass filaments and glass staple fiber yarns for primary insulation jackets, heat shielding curtains, fire blankets, pipe insulation. Wall covering of staple fiber yarns. Plaster reinforcement of textile glass mesh fabrics and textile glass nonwovens. Reinforcement of grinding wheels with woven glass fabrics. Filter materials for high temperature filtration with woven fabrics and nonwovens. Decorative fabrics of textures glass filament yarns and glass staple fiber yarn. Cable insulation and reinforcement with textile glass yarns. Reinforcement of adhesive tapes with textile glass yarns. 5.2. PRODUCTION CAPACITY AND MARKET PRICES 5.2.1. Production and Consumption in Turkey
Textile glass fibers are produced by only Cam Elyaf Sanayii A. . in Turkey. Cam Elyaf Sanayii A. . is a subsidiary of 66.000 ton/year in 2003. The consumption of textile glass fibers in Turkey was around 9000 ton/year in the late 1990s. i e Cam Group and the plant is located in ayrova, Gebze. Since production has started in 1976 Cam Elyaf has continually increased its capacity and grown to

5.2.2. World Production and Consumption Figures World textile glass fiber consumption by year and countries between 1998-2000 varied as below:
(Thousand Ton) 1988 North America 724 57 319 500 190 1.790 1995 914 105 505 505 143 2.172 2000* 1162 114 790 619 181 2.866

Latin America Asia-Pacific Wetern Europe

Middle East, Eastern Europe and Other Countries World Total
* Estimated

14

Textile glass fiber production of Europe, Japan and USA between 1985 and 1997 is given in the following table: Years 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997e
fibers.

(Thousand Ton) Europe 276 286 296 320 350 373 327 341 371 466 488 487 490 Japan 403 421 388 394 USA* 2.201 (792) 2.330 (839) 2.282 (822) 2.344 (844) 2.346 (845) 2.350 (846) 2.340 (842) 2.495 (898) 2.500 (900)

* USA figerus include insulation and textile grade glass fibers. The figures in parenthesis are for textile glass

Source: Roskill Boron Report The Economics of Boron, 9th Edition, June 1999.

5.2.3. Producers: Textile glass fibers are produced by many companies in the world. The most important producers throughout the world are: Owens Corning Fibreglass (OCF), Saint Gobain, Pittsburgh Phate Glass (PPG), Certain Teed and Manville. Some of the textile glass fiber producer companies and their plant location are given in the below table (in alphabetical order): Ahlstrm Glassfiber OY Asahi Fiberglass Bayer AG Certain Teed Corp. Fiberglass Ltd. Fiber Glass Ind. Inc. Glasseidenwerk Oschatz Glaswerk Schuller GmbH 15 Finland Japan Germany USA England USA Germany Germany

Hankuk Glass Ind. Inc. Manville Corp. Nippon Electric Nippon Glassfiber Nitto Boseki Owens Corning Pittsburgh-Corning Corp. PPG Saint Gobain Superior Glass Fiber Vetrotex Vitrofil Scandinavian Glassfiber Silenka 5.2.4.Textile Glass Fiber Prices: USA

South Korea USA Japan Japan Japan 21 plants in different countries USA 7 plants in different countries 10 plants in different countries 12 plants in different countries Italy Sweden Holland

Textile glass fiber prices change according to the product type. Some of the prices of the products are as follow: Product Mat Prices (US$/Ton) 1.950 1.350 1.300 1.750 1.700

Chopped Strands
Roving

Woven Roving
Yarn

5.3. PRE-FEASIBILITY OF THE TEXTILE GLASS FIBERS PLANT (PROPOSED) 5.3.1. Production process of textile glass fibers Glass fibers are produced from the traditional raw materials required to make glass such as silica, colemanite, aluminium oxide, lime, magnesium oxide. Raw materials are crushed very fine and mixed to produce a homogeneous mixture, then introduced into a melting furnace, where it passes progressively to the liquid state. The furnace temperature is approximately 1550C. The molten glass is fed to platinium and rhodium alloy bushing which are heated electrically to 1250C controlled within the 0,5C. The glass flow by gravity through bushing with several hundred holes from 1 to 2 mm in diameter. A winding device pulls the fibers with 16

high speed to produce filaments (50-70 m/sn) from 9 to 20 microns in diameter depending on subsequent applications and winds a bundle of fibres called a strand on to a forming spincake. Whilst the glass type is always the same, forming conditions may be varied to obtain different fiber diameter and number of filaments per strand, resulting in strands with different linear density. 5.3.2. Project Characteristics Project Capacity: Products: 30.000 ton fiber glass/year Mat (6.000 ton/year), Chopped Strands (4.000ton/year), Roving (11.000 ton/year), Woven Roving (6.000 ton/year) and Yarn (3.000 ton/year)

Investment Period: 2 Years (2004-2005)

Project Life: 17 Years (2006-2022)

5.3.3. Cost of 1 ton of textile glass fiber: Consumption INPUTS Kaolin Silica Lime Colemanite Fluorite Sodium Sulfate Secondary materials (Chemicals) Pt-Ph Alloy Electricity Fuel Oil Natural Gas Wages Depreciation Other expenses TOTAL 17 1120 0,6 200 Kwh Ton Nm3 0,0914 385 0,198 for one ton of glass fiber 0,6 0,33 0,063 0,23 0,033 0,007 Ton Ton Ton Ton Ton Ton Unit Unit cost Of inputs (US Dollar) 110 80 40 375 220 100 Cost for 1 ton of glass fiber (US$ ) 66 26,7 2,53 87,5 7,33 0,70 100 48,74 102,4 39,6 231 47,33 185,6 114,85 1.060 6,23 2,52 0,24 8,25 0,69 0,007 9,43 4,60 9,66 3,74 21,79 4,47 17,51 10,83 100,0 %

KEY FINANCIAL PARAMETERS (at 100% Capacity)

FINANCIAL ANALYSIS-I Ground raw materials will be purchased. No investment discount applied. Fixed Investment Cost (US$) Total Investment Cost (US$) Net Present Value (US$) Cost/Benefit Ratio Internal Rate of Return (IRR) (%) Break Even Point Payback Period (Year) 62.222.967 77.308.349 17.815.281 1,206 %12,81 %38,80 (11.648 Ton) 5,67 Years

FINANCIAL ANALYSIS-II Grinding plant will be established. No investment discount applied. 66.438.486 81.041.153 23.810.318 1,266 %13,59 %38,60 (11.594 Ton) 5,52 Years

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6. ZINC BORATE
Zinc borate with a chemical formula of 2ZnO.3B2O3 .3,5 H2O is produced by mixing boric acid or borax with an inorganic zinc compound in the presence of zinc borate seed crystals and in the presence of an aqueous medium above 70C. Zinc borate is typically composed of 48,05 % B2O3, 37,45% ZnO and 14,50% water of hydration. Zinc borate has a wide range of applications in plastic and rubber industry as a fire retardant material because it retains its water of hydration at temperatures as high as 290-300C which enables zinc borate to be used in systems requiring high processing temperatures. In addition, it has a similar refractive index to most polymers, which results in retention of considerable translucency. It is a very effective smoke suppressant and reduces smoke emission drastically relative to the other fire retardants such as Sb2O3. Zinc borate can also be fed to extruders or injection molding equipment in much the same way as other solid polymer additives. Besides these advantages, zinc borate is a low cost fire retardant synergist. Zinc borate has a very low solubility in water (0,28% at room temperature). It has a refractive index of 1,58, specific gravity of 2,77 and it is thermally stable up to 290C. Zinc borate can be hydrolyzed by strong acids and basis. 6.1. APPLICATIONS Zinc borate is mainly used as a flame retardant, smoke and afterglow suppressant, anti-tracking agent and corrosion inhibitor in polymer systems such as polyvinyly chloride, nylon, polyethylene and rubbers. Some of the application areas of zinc borate as flame retardant are; plastic and rubber, wire and cables, fire retarding-paints, coated fabrics, electrical/electronic components, carpeting, coatings, automobile/aircraft interiors and paper products. Zinc borate can be used as multi-functional synergistic additives with other flame retardant chemicals, including antimony trioxide, magnesium hydroxide, alumina trihydrate and some brominated flame retardants. Zinc borate can also be used in halogen containing systems and halogen free systems in combination with Al(OH)3 and Mg(OH)2. In these systems, zinc borate slows the degradation of the polymer by creating a vitreous protective residual layer which could act as a physical barrier for further combustion. In addition, zinc borate increases flame resistance 19

and retards heat built up during combustion due to its higher number of hydrated water molecules which is released at high temperatures and cools the surface better by diffusing and absorbing a greater amount of heat. Other applications of zinc borates are usually correlated with general borate functionalities such as anti-corrosion, infrared absorbtion, biostatic and fluxing properties. In addition zinc borate is also used as a fungicide. 6.2. PRODUCTION CAPACITY AND MARKET PRICES 6.2.1. Producers Some of the zinc borate producers throughout the world is given in the following Table with their capacities.

Country China

Producer Company Hainan Zhongxin Chemical Shanghai Jinghua Chemical Wuxi Daxhong Chemical Zhenjiang Sulphuric Acid Plant

Plant Location Haiko Wujing. Zhenjiang City Mumbai Skalevik Laredo Wilmington

Capacity (Ton/Year) 1.000 1.000 12.000

India Norway USA

C-Tech Waardels Anzon US Borax

Source: The economics of boron ,2002.

In addition to these companies AllChem Industries, Inc., Product 2000, CharlottE Inc. and William Joung And Co. also produce zinc borate.

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6.2.2. Market: The main markets for flame retardants are the USA and Western Europe. It was estimated that the global market for flame retardants in 1998 varied as below: North America Western Europe Japan Other Asian Countries%8 Other Countries %2 %45 %32 %13

Flame retardant market by type in USA and Western Europe in 1998 was distributed as below (% by volume):

Flame Retardant Al(OH)3 Brominated Compounds Phosphorus Chlorinated Compounds Antimony Oxides Mg(OH)2 Others*

USA 39 27 12 11 8 1 2

Western Europe 47 13 23 3 7 2 5

* Zinc borate and boron compounds used as flame retardant are included in the others.

The use of zinc borate in plastics as flame retardant is growing. Therefore, US Borax increased its capacity from 4.500 ton/year to 9.000 ton/year in 1996 and to 12.000 ton/year in 1998. US Borax expended 3 Million US$ in 1996 for the capacity increase. It is estimated that an investment of around 16-20 Million US$ was made for the second capacity expansion. It is estimated that the world zinc borate market has an annual growth of 12-15%.

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6.2.3. Zinc Borate Prices: Zinc borate prices between 1980 and 2001 in USA varied as below: Years 1980 1988 1992 1998 2001 Price (US$/ton) 1100 1700-1840 2420 2180 2340

Although zinc borate prices was around 2.300 US$/ton in USA in 2001, lower prices of 12501470 US$/ton were also exist in the market. 6.3. PRE-FEASIBILITY OF THE ZINC BORATE PLANT (PROPOSED) 6.3.1. Production Process of Zinc Borate Zinc oxide (ZnO), boric acid (H3BO3) and zinc borate (2ZnO.3B2O3.3,5H2O) seed crystals are used in zinc borate production. After preparing a boric acid solution at 95-98C, zinc oxide and seed crystals are added into the hot solution in certain amounts. The obtained mixture are agitated in reactor for a certain period of time at constant temperature to form the zinc borate with the formula of 2ZnO.3B2O3.3,5H2O. The solid formed after reaction is filtered and separated from the weak boric acid solution. The solid is washed with water to remove boric acid remained in the solid and dried in a dryer. The weak boric acid solution is returned back to the beginning of the process. The formation reaction of zinc borate from boric acid and ZnO is as follow: 2 ZnO + 6 H3BO3 + 0,5 H2O 6.3.2. Project Characteristics Project Capacity: Product: Investment Period: Project Life: 10.000 ton zinc borate/year. Zinc borate powder with a chemical formula of 2ZnO.3B2O3.3,5H2O. 1 Year (2004). 17 Years (2005-2021). 22 2ZnO.3B2O3.3,5H2O + 6 H2O

6.3.3. Cost of 1 ton of zinc borate (2ZnO.3B2O3.3,5H2O):

Consumption INPUTS one ton of borate Boric Acid Zinc Oxide Electricity Fuel Oil Wages Depreciation Other expenses TOTAL 1,1 0,4 150 0,20 Ton Ton Kwh Ton for zinc Unit Unit cost Of inputs (US Dollar) 385 1000 0,0954 401 Cost for 1 ton of zinc borate ($) 423.5 400 14,31 80,2 80 35,4 41,2 1.074,61 39,4 37,22 1,33 7,46 7,44 3,29 3,83 100,0 %

KEY FINANCIAL PARAMETERS

(at 100% capacity) FINANCIAL ANALYSIS Technical grade boric acid and zinc oxide will be used. No investment discount applied. Fixed Investment Cost (US$) Total Investment Cost (US$) Net Present Value (US$) Cost/Benefit Ratio Internal Rate of Return (IRR) (%) Break Even Point Payback Period (Year) 3.645.518 5.325.172 24.806.335 7.320 %58,39 %17,36 (1.736 Ton) 2,04

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