CBG Biotech Blog

What Is the Payback Period for an Industrial Solvent Distillation Unit/Still?

March 20, 2018 / by David A. Camiener

payback-period-for-industrial-solvent-distillation-unitAs opposed to return on investment (ROI), which is expressed as a percentage that can be used to determine an investment’s profitability, payback period is expressed as a period of time—specifically the amount of time it takes to recoup the cost of an initial investment. At CBG Biotech, we use both calculations to explain the near- and long-term cost savings and value provided by our industrial solvent distillation units/stills.

However, we’ve found that payback period is a particularly powerful measurement when a company wants to justify the cost of its investment in the most direct economic terms possible. This post is going to show you why.

Naturally, there are a number of factors that impact a payback period, and the initial cost of the unit is only one of them. To truly understand how much a solvent distillation unit will help you save, you need to consider all of your current solvent-related expenses. This can be determined by asking questions related to these major spend categories below:

  • Solvent spend: What type of solvents are you using and how much do they cost per gallon? How much solvent are you using per day?
  • Waste collection spend: How much are you paying monthly for waste removal? How much are you paying in annual fees attributable to your EPA waste generator status? Note: through recycling, it's possible to reduce your EPA waste generator status and, by association, your cost of disposal.
  • Labor spend: How many man-hours are being dedicated cross-departmentally each day to acquiring, handling and disposing of solvents? How about each week?
  • Quality issues spend: How much production time is wasted on average per month because parts need to be rewashed or disposed of? How much does that cost your facility annually? How much money are you spending on wasted materials per month because of improper parts washing? And how much does that cost your facility annually?
  • Maintenance spend: How much are you spending annually on repairs that can be attributed to running dirty solvent through parts washing equipment?

Even if some of these figures seem difficult to harvest, simply considering many of them will help justify the initial cost of an industrial still.

Payback Period Taking into Account Solvent Spend Alone

Determining payback period in relation to your current solvent spend is arguably the easiest—and most impactful—way to justify the return of your cost for a solvent distillation unit/still. To underscore this point, we’ve provided examples below using two common industrial solvents, acetone and toluene.

In this example, we assumed a modest solvent need (15 gallons daily) and estimated modest solvent costs. Large-volume solvent users will often pay less for solvent purchases than depicted here and, comparatively, small-volume users will have higher costs on a per-gallon basis.


 

Acetone

Toluene

Assumed solvent cost per gallon

Assumed volume of solvent used daily

$5.00/G

15 G

$7.00/G

15 G

Total solvent cost per day

Working days/year

$75.00/day

200 days

$105.00/day

200 days

Total solvent cost/year

Solvent recovery yield

$15,000.00

90+%

$21,000.00

90+%

Solvent cost recovered (direct cost)

$24,300.00

  $18,900.00

15-Gallon Standard Recycler
Payback Period

< 18 months

< 10 months

Again, this is just an example using modest solvent needs/costs. Your payback period will be reduced and your ROI increased if:

  • You’re using a high-cost solvent (especially an expensive fluorinated solvent).
  • Your solvent use volume exceeds 15 gallons per day.
  • Your facility operates more than 200 working days per year.
  • Your facility runs multiple shifts per day.

Other Important Factors That Contribute to Payback Period

Once you've determined how long it will take you to pay back your solvent distillation unit/still, you can start thinking about long-term ROI and how you’ll reinvest that additional savings in your facility. Think of solvent recycling as one crucial part of your lean journey; with these savings, you can invest in other processes such as Five S and Six Sigma.

And while solvent recycling is environmentally friendly, the savings it delivers could be used to invest in additional operational and/or environmental initiatives. Purchasing an industrial solvent recycler/still is one of the best ways to kick off a major green initiative within your facility.

If you have questions about how to calculate your payback period, contact us today. Or check out our free Cost-Savings Analysis Calculator to see exactly how much your facility can save by recycling its solvents.

How Do CBG Customers Benefit From Industrial Solvent Distillation 

David A. Camiener

Written by David A. Camiener

David Camiener founded Pragmatic Materials, Inc., a supplier of regulated materials and high purity biochemicals to the Pharmaceutical and Life Science industries.  Mr. Camiener is President of CBG Biotech, Ltd., Co., a manufacturer and supplier of recycling equipment to the laboratory, hospital and industrial markets.

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