Project Name: Complete Wood Pellet Factory
Production Output: 3.6~4.5 ton per hour.
Project Location: Morocco
Raw Materials: Wood blocks, wood shavings and sawdust (local wood).
Process Flow: Wood chipping,
Included Machinery: Wood Chipping Machine, Storage Bin (wet material stock bin and dry material stock bin), Cylinder Dryer, Screen Sieve, Elevator, Pellet Machine (BPM508), Pellets Cooler, Bagging Machine, etc.
Equipment Cost: Don’t hesitate to send us an inquiry if you are interested to get the cost details of the project!
This was a turnkey business plan for a medium scale wood pellet factory. It was made for one of our client in Morocco. Some photo of the project is displayed below for your reference. (Similar Project: 5ton per hour Wood Pellet Manufacturing Plant in Vietnam)
How Much Does It Cost To Build A Wood Pellet Factory?
Numerous environment friendly sources of energy have been developed today. Most of them are also cheaper than traditional energy sources. Wood pellets are one of the favorite alternative sources of energy today. Not only are they safer for the environment but they are also much cheaper than gas, coal and oil. If you have an entrepreneurial mind this is obviously a business opportunity you should take advantage of. First of all, you need to figure out the cost of building a wood pellet factory.
Estimating What It Will Cost To Start Wood Pelletizing Business
To come up with a good estimate you need to put the following factors into consideration when you are planning for start your own business of making wood pellets:
This will depend on the raw material you plan to use. This is because pellet machines differ depending on the type of feedstock you wish to use. Softwood, for example, needs a higher compression ratio than hardwood .For that reason each of the types of wood requires different types of equipment. (If you just need a mini or small scale production, our small pellet making unit maybe what you are looking for!)
Turnkey Biomass Pelletizing Solutions
You should also consider the size of raw material you plan to use. If you plan to use logs you should purchase a hammer mill since an ordinary mill cannot process that size of material. Another factor is the amount of raw material you would like to process at ago. If you plan to produce large amounts of pellet then you should buy larger and more advanced equipment
- Cost of Raw Material
Once you have decided on the equipment you must also calculate the cost of raw materials you will need to get your business started. The cost here is determined by the type of feedstock you plan to use. Decide on whether you will be using wood as your material or virgin fiber. Virgin fiber is substantially more expensive with a ton going for $70 to $80. Wood on the other hand goes for $55 to $ 65 per ton.
You should also consider the processing cost when estimating the raw material cost. Raw materials have differing production costs depending on their moisture content. Feedstock usually has 40 to 60% moisture in them. The higher the moisture composition the higher the production costs since they need much more time and energy to dry. Wood has a much lower percentage of moisture than virgin fiber and hence is much cheaper to process.
- Energy Costs
This is another factor to be considered. It costs about $10 to process one ton of feedstock. This, however, varies depending on location. Energy costs will be higher in European countries than in the USA and Canada.
- Machine Repairs and Maintenance
According to Deloitte this is another important figure to include in your estimate. You will incur about $5 worth of maintenance costs for every ton you process.
- Loading and Shipping Costs
These vary depending on your business’ location and working model. Before you get started you must have budgeted for this as well or else you will not be able to make your deliveries. It costs roughly $2.5 to load a ton of pellets on to rail for shipping. You should also consider the cost of rail road infrastructure when you make plans for transportation.
In addition there are several other costs that are determined by your plant’s capacity. These are:
- The Cost of Grinding On Site
- Cost of Storage
- Labor Costs
These are can be reduced using economies of scale for example if you produce 150000 tons of pellets per year your labor costs will be $10 for each ton. If your output is 100000 tons the cost of labor will be $15 per ton.
- Construction Cost
Last but certainly not least is the total cost of building your wood pellet plant. This is an important cost and it should also be factored in when pricing your products.
(Other project for reference: 2ton/h Biomass Pellet Production Plant in Sri Lanka)
This list should get you started on your journey to profitable pellet production and selling. You should also consult an expert in the industry. They will not only explain the points above in greater detail but also give you to insider information about the industry. We hope that this information will help you on your wood pellet factory business plan!