Economic background of chemical integration - a case study

Abstract

In this second paper on chemical integration the author refines the usual relation of total costs equals fixed plus variable costs further by splitting the fixed costs into core, true fixed and capacity related fixed costs. A set of equations for a simplified definition of the returns on investment for an entire chemically integrated complex and individual production units in the manufacturing plant is given, from which the individual contributions of diversification and of chemical integration can be deduced. An example taken from practice is given.