What is a acetone project report?
An acetone project report is a detailed project report (DPR) for a plant that makes or recovers acetone, the solvent also called propanone or dimethyl ketone. It sets out the process route, machinery, feedstock, licences, project cost, means of finance, five-year projections, DSCR and break-even that a lender or investor reviews before funding the plant.
Entrepreneurs, pharma groups and solvent traders use it to choose a route and raise a term loan; banks use it to test whether the plant can repay.
Also known as: acetone manufacturing project report, project report on acetone, acetone business plan, acetone recovery plant DPR.
Acetone manufacturing plant cost in India: the sample economics
Our sample report models a spent acetone recovery plant of 16 metric tonnes per day, running 330 days a year. It starts at 60% of capacity and reaches 80% in Year 5, selling recovered acetone at ₹68,900 per MT.
| Land and site development | 117.11 |
|---|---|
| Building and civil works | 304.33 |
| Plant and machinery | 621.58 |
| Other fixed assets | 89.20 |
| Contingencies | 46.30 |
| Preliminary and pre-operative | 29.46 |
| Working capital margin | 82.23 |
| Total | 1,290.21 |
| Promoter's contribution (25%) | 322.55 |
|---|---|
| Term loan from bank (75%) | 967.66 |
| Cash credit limit (separate) | 246.70 |
| Total project cost | 1,290.21 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments. The lowest yearly DSCR is 2.10. All figures are illustrative.
Acetone manufacturing process in a recovery plant
A recovery plant turns spent acetone from pharma and chemical units back into saleable solvent. Acetone boils at about 56°C, well below water, so distillation does most of the separation and the molecular sieve finishes the drying.
- Receipt and testing
Each tanker or drum lot is run on a gas chromatograph for acetone, water and other solvents before unloading. The assay sets both the price paid and the expected yield.
- Pre-treatment
The feed is filtered, neutralised with caustic soda lye and passed over activated carbon to take out acids, colour and odour that would otherwise carry into the product.
- Fractional distillation
A packed column with a steam reboiler takes acetone off the top and leaves water and higher boiling solvents at the bottom as still residue.
- Dehydration
Distilled acetone passes through molecular sieve beds that bring moisture down to the buyer's limit; the beds are regenerated in turns.
- Quality testing
Every batch is checked for purity, water, acidity and residue on evaporation against IS 170 or the buyer's specification before release.
- Filling and dispatch
Acetone is filled into drums or tankers under a nitrogen blanket in a flameproof area and held in a licensed solvent yard.
Which acetone route suits a new plant?
The route decides the scale, the feedstock and almost every number in the report. Most first projects are recovery plants, because synthesis is tied to phenol and to very large volumes.
| Cumene process | Benzene and propylene make cumene, which is oxidised and split into phenol and acetone. Acetone is the co-product, so the plant's economics follow phenol demand. Only viable as a large integrated complex. |
|---|---|
| Isopropyl alcohol dehydrogenation | Isopropyl alcohol is passed over a catalyst at high temperature to give acetone and hydrogen. Simpler chemistry, but margins depend on the price gap between isopropyl alcohol and acetone. |
| Spent acetone recovery | Spent solvent from pharma and chemical plants is neutralised, distilled and dried. Mid-size investment, no reaction section, and the route modelled in our sample report. |
| Fermentation (bio-acetone) | Sugars or starch are fermented to acetone, butanol and ethanol. Historically important, but low yields keep it at pilot or niche scale today. |
Raw materials for an acetone recovery plant
Spent acetone is almost all of the raw material bill, and raw materials are 45.6% of sales in the sample. Feed is bought on the gas chromatograph assay, so a lot with more water or mixed solvents should cost less per tonne.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Spent acetone from pharma and chemical plants | 88% | 1,021.12 |
| Caustic soda lye for neutralisation | 4% | 46.41 |
| Molecular sieve and drying media | 5% | 58.02 |
| Activated carbon | 3% | 34.81 |
| Total | 100% | 1,160.36 |
The sample holds 30 days of raw material stock and pays suppliers in 30 days.
Machinery for a 16 MT per day acetone plant
The packed distillation column with its reboiler is the largest machinery item in the sample. Everything that touches acetone vapour needs flameproof motors and fittings, which adds to the cost of standard equipment.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Solvent storage tanks with flame arresters | Hold spent feed and finished acetone | 87.02 |
| Feed pre-treatment and neutralisation vessel | Neutralises acids and settles solids | 49.73 |
| Packed fractionating column with reboiler | Separates acetone from water and heavier solvents | 174.04 |
| Condensers and reflux system | Condenses overhead vapour and controls purity | 62.16 |
| Molecular sieve dehydration unit | Removes the last traces of water | 62.16 |
| Steam boiler, cooling tower and chilling plant | Heat for the reboiler, cooling for condensers | 87.02 |
| Nitrogen blanketing system | Keeps air out of tanks and filling lines | 31.08 |
| Flameproof drum filling and weighing station | Fills and weighs drums for dispatch | 31.08 |
| Quality control lab with gas chromatograph | Tests every feed lot and product batch | 37.29 |
| Total plant and machinery | 621.58 | |
Costs are the sample report's estimates. Get current quotations before you finalise.
Utilities and manpower for an acetone plant
Distillation is an energy business: steam goes in at the reboiler and the same heat has to be taken out at the condensers. Utilities and a trained shift team decide both yield and safety.
| Power and fuel | ₹156.77 lakh in Year 3 of the sample, or 6.2% of sales, covering boiler fuel, chilling and pumps |
|---|---|
| Steam | Low-pressure steam for the column reboiler and for regenerating the molecular sieve beds |
| Cooling and chilling | Cooling tower water for the main condenser and chilled water for the vent condenser, so acetone vapour is not lost to air |
| Nitrogen | For blanketing tanks and purging lines before filling and maintenance |
| Manpower | 58 people in the sample, including 20 skilled operators, at a Year 1 wage bill of ₹131.28 lakh; the column runs round the clock in shifts |
| Safety systems | Flameproof electricals in solvent areas, earthing of tanks and drums against static, and fire protection sized for a Class A solvent store |
Licences and approvals for an acetone plant
An acetone recovery plant handles a hazardous waste, a Class A solvent and a BIS-controlled product at once. Plan the licences into the pre-operative period, because the plant cannot receive feed or sell product without them.
| Hazardous waste authorisation | Authorisation from the State Pollution Control Board under the Hazardous and Other Wastes Rules, 2016 to receive and recycle spent solvent |
|---|---|
| Pollution board consent | Consent to establish and operate; expect the Red category, since CPCB lists organic chemicals manufacturing as Red and states such as Odisha also place hazardous waste reprocessing units in Red |
| BIS certification | Licence to IS 170 under the Acetone (Quality Control) Order, 2020, in force since 13 March 2024 |
| PESO licence | Storage licence under the Petroleum Rules, 2002; acetone is on PESO's list of substances needing a licence |
| Hazardous chemical rules | Acetone is listed in Schedule 1 of the MSIHC Rules, 1989, which set safety, reporting and emergency plan duties |
| Business registration | Udyam and GST registration, a factory licence under state rules and a fire NOC from the local fire authority |
Rules and thresholds vary by state and change over time. Confirm current requirements with each authority before you apply.
Market for recovered acetone in India
Pharma and API plants use acetone in large volumes as a reaction and crystallisation solvent, and they also generate most of the spent acetone a recovery unit buys. Paints, adhesives and cleaning uses take the rest.
Virgin acetone prices follow the phenol and cumene cycle. A recovery plant sells below virgin acetone, so its margin moves with the gap between spent and virgin prices rather than with the acetone price alone.
- Pharmaceutical and API manufacturers
- Paint, lacquer and thinner makers
- Adhesive and resin producers
- Solvent traders and distributors
- Cosmetic and nail care formulators
Where a recovery plant wins: toll recovery. A pharma unit sends its spent acetone, pays a processing charge and takes back purified solvent, which gives the plant steady feed and less price risk.
Mistakes that weaken an acetone project report
- Treating spent feed as pure acetone
Feed carries water and other solvents. Output must be worked out from the assay of typical lots, not from the tonnes bought.
- Selling at virgin acetone prices
Recovered acetone sells at a discount. Using virgin rates overstates sales and DSCR, and lenders spot it.
- No cost for still residue
The column bottoms are hazardous waste that must go to an authorised disposal facility; leaving out that cost overstates profit.
- One pharma client as the only feed source
If that client changes its process or solvent, feed stops. Lenders look for supply agreements with several generators.
- Ignoring licence lead times
Hazardous waste authorisation, PESO and BIS approvals all come before the first sale, so the pre-operative period and interest during it must allow for them.
How NPCS helps you plan an acetone plant
- Route and capacityCompare recovery and synthesis routes and size the plant to the feed you can secure.
- Feed and yield modelBuild the material balance from your feed assays, including residue and losses.
- Bank-ready project reportProjections, DSCR and working capital in the format your lender wants.
- Licences and layoutPlant layout for solvent storage and the approvals list for your state.
NPCS's client list shows 269 project assignments in specialty chemicals, prepared by the NPCS project team led by founder Ajay Kumar Gupta.
What's inside the acetone sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
Real NPCS acetone project reports
These are acetone project reports NPCS has prepared, with the plant capacity, total capital investment, rate of return and break-even worked out in each. Costs have moved since some were written, so we bring any of them up to date for your capacity and location.
| Project report | Plant capacity | Total investment | Rate of return | Break-even | Action |
|---|---|---|---|---|---|
| Methyl isobutyl Ketone (MIBK)from Acetone | 166 MT/ Day | ₹58.81 crore | 27% | 54% | Get this report |
Figures as worked out in each NPCS report. Total investment includes plant and machinery, land and building, and working capital.
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Acetone project report: frequently asked questions
How much does it cost to set up an acetone plant in India?
It depends mostly on the route. Our sample report models a 16 MT per day spent acetone recovery plant at ₹1,290 lakh, including land, building and working capital margin. A smaller recovery unit of 4–6 MT per day needs an indicative ₹4–7 crore. Synthesis by the cumene process is far larger, because acetone comes out alongside phenol in an integrated complex.
What is the raw material for acetone?
Large plants make acetone from cumene, which is produced from benzene and propylene, and get phenol as the main co-product. Some plants dehydrogenate isopropyl alcohol. A recovery plant buys spent acetone from pharma and chemical units. In our sample report, spent acetone is 88% of raw material cost, with caustic lye, molecular sieve and activated carbon making up the rest.
Is an acetone recovery business profitable?
In our illustrative sample, a 16 MT per day recovery plant earns a 34% return on investment in Year 3. It breaks even at 31% of capacity and pays back in about 2.7 years. Real profit depends on the gap between spent and virgin acetone prices, the acetone content of each feed lot and how quickly you secure the BIS and PESO licences.
Do I need a licence to store acetone?
Yes. Acetone is on the PESO list of substances that need a licence under the Petroleum Rules, 2002. Its flash point is far below 23°C, which puts it in Petroleum Class A. It is also a listed hazardous chemical under the MSIHC Rules, 1989, so storage, safety reports and emergency plans follow those rules.
Is BIS certification mandatory for acetone?
Yes, as of October 2026. The Acetone (Quality Control) Order, 2020 requires acetone to conform to IS 170 and carry the BIS Standard Mark. After several extensions, the last amendment (S.O. 3299(E), July 2023) brought it into force on 13 March 2024. A recovery plant selling acetone in the open market needs a BIS licence before its first sale.
Which acetone manufacturing process is used in India?
Virgin acetone is made by the cumene process, where cumene is oxidised to cumene hydroperoxide and split into phenol and acetone. That route only works at very large scale. New entrepreneurs usually set up solvent recovery plants, which purify spent acetone from pharma units by neutralisation, fractional distillation and molecular sieve drying.
Is the sample report free and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report; its figures are representative and not based on a real project. It should not be submitted to a bank. For a loan, NPCS prepares a report for your own route, capacity, feed contracts and location.
Sources and references
- Acetone (Quality Control) Amendment Order, S.O. 3299(E), 21 July 2023Ministry of Chemicals and Fertilizers, Gazette of India, checked Oct 2026
- Quality control orders for chemicalsDepartment of Chemicals and Petrochemicals, checked Oct 2026
- List of petroleum products requiring a licencePetroleum and Explosives Safety Organisation (PESO), checked Oct 2026
- Manufacture, Storage and Import of Hazardous Chemicals (Amendment) Rules, 2000Ministry of Environment and Forests (gazette copy on FAOLEX), checked Oct 2026
- Hazardous waste management and authorisationTamil Nadu Pollution Control Board, checked Oct 2026
- Categorisation of industrial sectors under Red categoryState Pollution Control Board, Odisha, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.