Is it profitable to produce briquettes?
Profitability depends on many different factors, which will vary according to location, raw materials and size of factory. However, the main factors you need to consider are the following:
- The costs of raw material?
- Type (Spruce, pine, beech, straw etc.)?
- Form (Logs, chips, sawdust, bales, loose etc.)?
- Transport expenses to your factory?
- Moisture level (below 12% moisture)?
- Cost of electricity?
- Level of wages?
- Cost of spare parts?
- Moisture level ?
- If you need to dry your material, you will need some kind of fuel.
- Other cost?
- Your market (local or export)?
- Local trucking and storage costs?
- Shipping and storing costs for export?
- Sales prices (Sales prices vary from regions to region. Often feasibility is based on exports, but generally feasibility is best based on local sales or a combination of the two. Many factors can influence export costs, such as fluctuating exchanges and freight rates.
As the above mentioned costs vary from region to region, research is important in order for you to get an idea if briquetting is profitable for you.
The below mentioned graphs show the different costs levels and sales prices in different regions of the world.
The above examples and figures are estimated figures based on our experience in working in the different countries. As conditions, pricing etc. change all the time we ask you to consider the figures as examples only. In the end you should make your own calculations.
As you can see from the different examples raw material is generally more expensive in Northern Europe, as there has been a market for biomass for a long time and thus a high demand. Furthermore, the governments in Northern Europe give financial support for biomass in order to decrease the use of fossil fuels, which also affects the price.
In other regions of the world like Africa, Asia, and Eastern Europe there is plenty of raw material, but so far there is only a limited local market for briquettes in most countries. However, the demand in increasing in these regions. Generally, the raw material prices in these regions are low and since there is only limited government support, profitability is also reduced. However, as many companies have adjusted their sales prices accordingly they are profitable, as their direct costs and investments are lower.
Exports from these regions is possible to other markets in the region, but logistical costs are always an important factor.