Digital Repository @ Iowa State University Techno-economic analysis (TEA) of extruded aquafeeds

. The worldwide decline and overexploitation of ocean fisheries stocks had provided incentive for rapid growth of aquaculture. The aquaculture industry has been recognized as the fastest-growing food production system globally, with a 10% increases in production per year, and is one of the most reliable and sustainable growth markets for manufactured feeds. Extrusion technology has been extensively used in the modern aquatic feed manufacturing, due to nutritional, physical properties improvements and cost effectiveness of feeds. Cost related to aquatic feed remains the biggest challenge, especially for small-scale producers. In this study a single screw extruders and three different scenarios (i.e. 0.2 tons/day, 2 tons/day, 20 tons/day) throughput were used to develop techno-economic models for small-scale producers of extruded aquatic feeds. The results show annualized capital costs decreased as production capacity increased. Thus, aquatic feed producers could use this tool to evaluate annual costs and benefits to determine processing economics.


Introduction
The aquaculture industry has been recognized as the fastest-growing food production sector globally, with a 10 % increase in production per year (Townsley, 2013), fuelled by a combination of population growth, decline or stagnation of ocean fisheries stocks, increased global demand, rising income and urbanization, and increased awareness of the nutritional benefits of fish (Naylor et al., 2000;FAO, 2014). As reported by Lapere (2010), the global declining of fish catch concurred with the increasing demand for fish made the prospect of aquaculture sectors very bright. In 2012, aquaculture-farming production attained an all-time high 90.4 million tones, and expected to reach 96.6 million tones by the year 2013 (FAO, 2014). Currently, aquaculture accounts for over one fourth of all fish consumed by human (Naylor et al., 2000). According to the Food and Agriculture Organization of the United Nations (FAO), each year aquaculture sector contributes over 19 million metric tons of fish to the world's fish supply chain (FAO, 2012). To meet rapidly growing demand of aquaculture production, global aquatic feed production is expected to reach 71.0 million metric tons by 2020 (FAO, 2012). Fish feed manufacturing is considered one of the most reliable and sustainable industry in feed production (Rosentrater et al., 2009a).
Extrusion technology has been extensively used in the modern fish feed manufacturing (Sørensen et al., 2009), due to nutritional and physical property improvements of feeds such as in the overall feed quality, increasing durability and water stability of feeds, as well as cost effectiveness of finished feeds (Davis and Arnold, 1995;Cheng et al., 2003). In aquaculture farming, feed costs account for 30 and 60% of the total production costs (Shipton and Hasan, 2013). Although this technology is well accepted in the feeds industry, there are still few published papers on cost and benefits, especially for small-scale feed producers. Thus the objective of this study was to conduct techno-economic analyses of small-scale extruded aquatic feeds.

Extrusion Processing
Extrusion technologies have an important role in the foods, and feed industries as manufacturing processes (Guy, 2011). Extrusion is regarded as one of the most versatile and energy-efficient processes in food and feed production (Dziezak, 1989). Extrusion cooking is defined as a high-temperature-short-time (HTST) cooking process, which involves the cooking of ingredients in the extruder barrel, by a combination of high pressure, heat, and friction. Materials exit through a small die which is designed to produce highly expanded, low-density products with unique physical and chemical characteristics (Robinson, 1991;Pansawat et al., 2008).
Extrusion cooking has gained popularity in aquatic feed manufacturing due to potential improvements in feed quality, increased versatility, high productivity, low cost, and energy efficiency (Previdi et al., 2006). Moreover, extrusion cooking is environmentally friendly (produces little process effluents) and can be operated continuously with high throughput (Guy, 2011). Most of the fish feeds produced in the US and other developed countries are manufactured almost exclusively using extrusion technology (Cheng et al., 2003). According to Shipton and Hasan (2013) fish feed costs and efficiencies can significantly improve by using simple extruders. Additionally, extrusion process can also improve the final product in terms of durability, digestibility, and palatability, increase animal performance, and destroy pathogenic microorganism in the feed (Ayadi et al., 2011;Rosentrater et al., 2009b).
Besides the economic benefits, chemical and structural (physical) transformations occurring during extrusion cooking, such as gelatinization and expansion of the starches, formation of lipid complexes enzyme inactivation, denaturation anti-nutritional factors, and degradation reactions of pigments (Ding et al., 2005), all at which have both physical and nutritional benefits (Cheng et al., 2003). In extrusion cooking, the quality of the final product depends mainly on the extruder type, die geometry, screw speed and configuration, feed moisture and composition, feed particle size, feed rate, and temperature profile in the barrel (Ding et al., 2005;Pansawat et al., 2008).

Types of Extrusion
Generally, extrusion is categorized according to screw types; single screw and twin screw extruders. Single screw extruders are an attractive option for many applications due to low capital investment, low manufacturing cost, low maintenance, simplicity in design, and straightforward operation (Kim and Kwon, 1996). A typical single screw extruder ( Figure 1) is usually comprised of three main zones: feed metering, and compression, with a die for shaping (Previdi et al., 2006). It relies on drag flow to move the material down the barrel and develops pressure at the die (Kelly et al., 2006). Material enters from the feeder and moves in a channel toward the die when a screw rotates inside the barrel (Kim and Kwon, 1996).
Generally, twin-screw extruders are classified according to the direction of screw rotation as either counter-rotating or co-rotating (Ayadi et al., 2011). Advantages of the twin-screw extruders over the conventional single-screw extruders are better control of residence time, and more uniform distribution of shear within the material (Kim and Kwon, 1996). Twin-screw extruders can process materials with different moisture contents and different viscosities, (Hsieh et al., 1990). Likewise, twin-screw feed rates are independent of screw speed and not influenced by pressure flow caused by restriction at the die (Altomare and Ghossi, 1986).
Also, twin-screw extruders can have larger heat transfer areas, larger outputs, more positive conveying, shorter residence times, better mixing, and less wear compared to single-screw extruders (Ayadi et al., 2011).
In aquatic feed manufacturing, twin-screw extruder are often favored over single screw extruder due to their abilities to handle wet materials, oily, or sticky ingredients (Cheng et al., 2003), and viscous materials with different levels of composition (protein, starch, lipids, and fiber) over a wide range of particle sizes (Chevanan et al., 2007). Additional advantages of twin-screw is their abilities to produced floating feeds, which may, prevent excess feeding and are easy to handle, and hence are often preferred by aquaculture farmers to sinking feeds (Chang and Wang, 1999). Furthermore, twin-screw extruders can handle feeds recipe with up to 22 % fat level compared to 12-17% for convectional single-screw extruders (Cheng et al., 2003). In this study, single screw extruders was selected over twin-screw since been the common extruders used by most of small-scale feed producers due to lower capital investment and easy to handle.

Materials and Methods
Pilot scale extrusion was performed using a single-screw extruder (Insta-Pro, model 500, Des Moines, Iowa) with a 45 mm diameter screw and a 20: 1 length to diameter (L/D) ratio.
Feed blends were manually fed into the extruder. The extruder was connected at 7.5 HP motor and screw speed was adjusted to 0-210 RPM (Rosentrater et al., 2009a). The mass flow rate was determined by collecting feed samples at 30-second intervals during the extrusion process and weighting the samples on an electronic balance (Rosentrater et al., 2005b). Mass flow rate recorded were 0.095 kg/s for soy oil blend and 0.089 kg/s, for fish oil blend. The temperature of the die and products produced were recorded after every two minutes and was 53 ± 5 ºC for die and 63 °C for soy-based feeds produced, likewise, for fish-based feed temperature of the die was 70 ± 8 ºC and 65.5 ºC for finished products. The temperature of the extruded feeds and extruder die was measured after every two minutes by using an infrared thermometer. A circular die (with several small holes was used in this study ( Figure 2). Overall process flow is shown on Figure 3.

Raw Materials
Two types of fish feeds were produced in this study (Figure 4). The main difference between the two feeds was oil. For one feed fishmeal meal Menhaden fish oil was used, while the other Soymeal soybean oil flakes were used. The blend composition per 0.5 ton is shown in Table 1.

Techno-Economic Analysis
Techno-economic analysis (TEA) is defined as a systematic analysis used to evaluate the economic feasibility aimed to recognize opportunities and threats of projects, taking into account the capital, variable (operational), and fixed costs (Simba et al., 2012), as well as benefits. Fixed and annual operating costs are critical parameters in TEA, and are key factors for cost estimation, project evaluation, and process optimization (Marouli and Maroulis, 2005). The TEA in this study was conducted using a spreadsheet (MS-Excel) to determine the cost of extrusion processing for aquatic feeds.
Economic cost analysis calculations were based on the assumptions made on Table 2. It was divided into capital, variable, and fixed costs. Equipment costs, installation/electrical work, process spouting/piping costs, and the engineering/construction costs were included in the capital cost, while utilities (electricity and water) costs, feed ingredients cost, labor costs, maintenance and repair costs, raw ingredients freight charges, delivery fuel expenses and other miscellaneous supply costs were categorized as variable costs. Fixed costs are those costs associated with depreciation, insurance, interest, overhead, and taxes. In this study, three feeds production rate (i.e. 0.20 tons/day, 2 tons/day, and 20 tons/day) were evaluated for the techno-economic analysis.

Capital Costs
Capital costs are the most important cost in plant establishment and construction; they are the initial investment cost put into the plant. In this study, the capital costs for each scenario were calculated based on the summation of the total initial equipment costs, building costs, and engineering/construction work costs (Wood et al., 2014). The equipment costs were obtained from different manufacturers/suppliers. Results show that annualized capital cost per ton decreased as the production rate increased from 1426.45 $/ton, 166.43 $/ton to 52.27 $/ton for scenario I, II, and III, respectively, as shown in Figure 5. As mentioned by Marouli and Maroulis, (2005) the key factor to reduce costs is to increase the size of the plant. Generally, the capital (equipment and building) costs decrease as the size of the plant increases.

Variable Costs
The annual variable costs of feed processing plant include the costs associated with labor, utilities, ingredients, maintenance and repair, and other facilities cost required for daily operation. In all scenarios, variable costs had the greatest impact on the total operational cost.

Labor
The cost of labor was calculated based upon the number of workers, total annual operational hours and estimated wages per hour. Total annualized labor cost per ton for all scenarios was estimated to be $86.49 /year. This result indicates that labor is the second largest contributor of variable cost with 9.93 % of the overall variable costs ( Figure 6).

Utility Costs
The utilities used in this study were electricity and water. The results show that the costs of utility increased as the production rate increased. Electricity cost is important in feed manufacturing; it includes costs for lighting and powered machinery such as extruders, mills, and conveyors. Electricity contributes the largest component of utility costs, approximately 78.58 % of the total annualized utility, for all production scenarios. The annualized cost of water per ton in all production scenarios were estimated to be $111/ton, equal to 21.42% of the total utilities cost and overall utilities contribute 1.07 % of the overall variable costs.

Materials (Ingredients) Costs
Feeds ingredient costs were determined based on different supplier' prices of materials per metric ton. A complete list of ingredients used in this study is shown in Table 1. As expected the annual costs of materials increased as production rate increased. It can be seen that the costs of materials had the greatest impact on the overall variable costs (average of 86.11%) as shown in Figure 6. The price of Menhaden fishmeal was higher compared to other ingredient costs.

Maintenance and repair costs
The maintenance costs were determined as 3% of the capital investment costs and contributed 0.34% of the overall averaged variable costs. Other variable costs are shown in Table 5.

Fixed Costs and Depreciation
Fixed costs are constant costs and independent of production rates (Pearlson, 2011). It includes costs of depreciation, insurance, interest, overhead, and taxes. Depreciation was calculated using the straight-line method over the estimated service life of the assets.
Depreciation is a non-cash deduction that occurs in the financial (profit and loss) report.
Different equipment in feed production depreciates at different rates, and there are different methods of calculating depreciation. In this study, depreciation was calculated using the straight-line method over the estimated life services of the assets (equation 1) for simplicity.

Straight line depreciation Assets Purchase Price Salvage Value Estimated useful life … … … … 1
Since assets cost increases with increased capital investment, thus, depreciation values increased as production rate increased and annual depreciation calculated in this study were $892.24, $1214.44, and $5730.61 for scenario I, II and III, respectively. Figure 7 show annualized fixed costs of three-production scenarios.

Insurance and Interest Costs
Insurance was calculated by multiplying 0.00462 (Davis et al., 2011) with the sum of initial equipment costs and building cost, insurance costs are proportional with the production rate, as rate increased from 50 tons/y to 5000 tons/y, insurance also increased from $307.95/y to $1128.54/y. Interest costs were related to capital investments. In this study, a 5% interest rate was used. The costs were determined by equation (2). It contributed 62% of the total fixed costs.
Interest $y I 100 * Initial equipment costs building costs … … … … … … … … … … . . 2 Where I = interest rate (5%) Overhead and tax costs Like other variable costs, overhead, and taxes increased as the capacity increased.
Overhead was calculated by multiplying the production rate by 0.16 (Rosentrater, 2013). On the other hand, taxes were calculated as 0.35% (Rosentrater, 2013) of the total capital costs. The total annualized fixed cost decreased as production rate increased as shown in Figure 8.

Total Annualized Costs
Total cost including both capital, variable, and fixed costs. As expected, the total annualized costs per unit ton decreased as the production rate increased (i.e. 4906.64 $/tons/y, 1219.05 $/tons/y, and 873.39 $/tons/y) as shown in Figure 9.

Conclusions
Declined of world fish capture has provided opportunities for aquaculture sectors and creates an open market for aquatic feeds. Extrusion technology has been broadly used in feeds manufacturing due to high quality and cost effectiveness of aquatic feeds. However, factors such as product cost analysis limit feeds production for small-scale producer, thus, techno-economic analysis could be a useful tool for small scale extruded feeds producer to analyze the production costs, and the results show as production capacity increased overall production costs of feeds decreased. Sørensen, M., Stjepanovic, N., Romarheim, O. H., Krekling, T., and Storebakken. T. (2009 3. Process production scenarios used to model extrusion.