One of our new wood pelleting plant project set up in Italy. It is a automatic production line for making pellets from chestnut wood. The output is 2~3 ton per hour. This project was designed to run 24 hour a day, except the drying section (The drying section run 8 hours a day). The pelleting plant equipment cost is around 300,000$.
Pellet Mill Project Site Photos
View the following photos to know more about the project in Italy. If you are interested to get more details of the pelleting business plan, you are welcome to get in touch with us (firstname.lastname@example.org)!
2 Sets of Ring Die Wood Pelleting Machine
Automatic Control System
Wood Crushing and Dedusting Machinery
Chestnut Wood Pellets
Wood Pelleting Production Cost
The world is going green. A nice way to join the movement is creating a wood pellet factory. Wood pellet unlike coal or gas costs less and emits less carbon dioxide to the environment. As an entrepreneur looking to start a plant producing the pellets, the question on your mind is cost. Two main things are responsible for the cost, the right machines, and raw materials. (Related Article: 7 Steps of Complete Wood Pellet Production Process)
Machinery Price Determinants
- Different machines are used to produce different pellet types. In a large factory, you will have to install several processing units to process a wide variety of pellets. Additionally, you will require a large floor space as the raw materials are processed under different conditions. Softwood requires higher compression and temperature during processing compared to hard types.
- The size of wood determines the processing setup. If the raw materials are large, a grinder to break it down into small pieces will be required. This will ensure the rest of the equipment is standard. You should factor in the cost of the pelleting plant in this instance.
- Another important cost determinant is the expected amount of final product. If you are targeting to produce a large number of products, it makes sense to install expensive equipment. This will lead to additional cost as a larger factory will have to be built. However, this price extra will easily be catered for by higher production.
- As a general principle setting up a small scale operation with simple raw materials costs less. On the other hand, raw materials requiring pre-processing and high production units increase cost.
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Raw materials pricing
Two types of materials can be used to produce wood Pellets; recycled wood, and virgin fiber.
- Recycled wood is cheap; it costs around 60 dollars per ton to acquire.
- Virgin fiber is used for high-quality products. This unused raw material currently retails for 75 dollars apiece.
Raw materials with high moisture content are expensive to process. Before buying raw material it is prudent to ensure the moisture content is around 50 percent. Recovered wood usually has a low water content is easy to process. Virgin fiber by default has high water content. If you are using virgin fiber a moisture content of up to 60 percent is allowed. Remember to adjust the acquisition cost to cater for the extra drying cost that comes with high moisture raw materials.
Once you have factored all these costs, calculating the cost of acquiring raw materials can be easily predicted.
Though not major, these small expenses affect price significantly. Pellet processing is a power intensive process. You require about 10 dollars worth of power for every 10 tons of final product you produce. This cost can vary significantly if you have an alternative source of energy to complement the national grid supply.
Proper maintenance of machines is important in avoiding disruptions in production. An average cost of five dollars per ton is enough for this. In large scale operations, loading and transporting using the rail costs up to 2million dollars.
Some costs vary with location. Labor in Europe is at around 15 dollars per ton. In the USA and Canada, it is lower at around 10 dollars per ton. It is proper to find out the minimum wage in the area you will build the wood pellet mill, to get an accurate estimate. Capital is another variable cost. It ranges anywhere between 125 and 250 dollars per ton. For capital, you will find more favorable pricing from your bank once you have established the business. (Related Article: How to Start a Wood Pellet Production Line?)
The cost of starting a pellet manufacturing business is important in planning. In a wood pellet business factors both easy and hard to predict exist. Input factors such as electricity and raw materials can easily be calculated. On the other hand, capital, labor and storage cost can only be calculated by considering the location of the business.