KITECH, together with Ulsan City, every year
Six SMEs Selected, Process Optimization to be Implemented
Chemical company Neo achieves 2.5-fold revenue growth

Neo is a chemical company that produces intermediate raw materials for chemical products by distilling discarded waste oil. To obtain high-purity raw materials using Neo's existing distillation facilities, the process of heating and cooling the waste oil had to be repeated multiple times. This process resulted in excessive thermal energy consumption, leading to the problem of excessively high manufacturing costs.

Accordingly, the Ulsan Regional Headquarters of the Korea Institute of Industrial Technology (KITECH) announced on the 13th that it resolved the problem by optimizing energy processes based on computer simulation model techniques and supporting facility improvements within the workplace.
The technique used involves inputting production site data into a computer to create a simulation model identical to the actual energy process and derive improvement plans. Based on the derived optimal improvement plans, the equipment required for the actual site was introduced, and the Institute of Industrial Technology supported the purchase, installation, and operation of the equipment.

Kim Jeong-hwan, a senior researcher at the Eco-friendly Materials Process Group who oversaw the practical work, focused on model verification, believing that the success or failure of optimization depended on the accuracy of the simulation model.

Insufficient field data was supplemented by worker experience and mathematical assumptions, and the predicted values of the implemented model were verified by comparing them with the company's actual process data. Once the reliability of the model was verified, computational fluid dynamics software was utilized to optimize the facility design and evaluate its economic feasibility, thereby deriving the final improvement plan.

Neo, which had been experiencing inefficiencies in its existing facilities, improved its process by installing a new 13-stage distillation tower based on the optimization of a simulation model. As a result, the yield increased significantly from 60% to 83%, and the process time was reduced from 43.3 hours to 33 hours. Sales increased more than 2.5 times within one year of the facility's installation, surpassing 5 billion won for the first time since the company's establishment.

This achievement is a representative success story of the 'Corporate Energy Process Optimization Support Project,' which was implemented by the Korea Institute of Energy Research with the support of Ulsan Metropolitan City for companies with excessive energy consumption.

This project, which began in 2017, selects and supports six small and medium-sized enterprises in the Ulsan region through an annual open call, and will be implemented for five years until 2021. Funding is jointly raised annually by Ulsan City (500 million won), KITECH (342 million won), and all participating companies (330 million won).

Company-specific optimization know-how and installed facility assets are transferred to the participating companies.

An analysis of the overall performance over the two years since the start of the business revealed that a total of 1,210.7 TOE and 1.966 billion won in costs were saved. TOE is a virtual unit converted to the calorific value of petroleum to compare the magnitude of various types of energy, and 1 TOE is equivalent to 10 million kcal.

Senior Researcher Kim Jeong-hwan stated, “NEO’s achievement is an excellent example of successfully improving corporate competitiveness by proactively eliciting support from local governments and participation from companies based on KITECH’s technological capabilities,” adding, “We will dedicate ourselves to developing an intelligent system that uses big data and AI to automatically derive optimal energy values in real-time through simulation models and reflect them in process operations.”