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Abstract: EFB pellet is becoming more and more popular in Malaysia, Indonesia and
Thailand. Analysis on the factors affecting oil palm EFB pellet price will give
customers a direct view on EFB pellet manufacturing.
There are many factors influencing EFB pellet price, such as raw material cost, fix
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asset investment, operation cost, and transportation etc. Before putting into production,
pellet manufacturer should pay more attention to those essential factors, efficiency of
the pellet production line and maintenance of the machinery.
Article Index
1. Raw Material Cost
2. Fixed Asset Investment
3. Operation Cost
3.1 Manpower Cost
3.1.1 Labor structure
3.1.2 Hourly rate
3.2 Energy Cost
3.3 Packing Cost
3.3 Packing Cost
3.5 Supporting Cost
4. Transportation
5. Additional Costs
6. Tips
6.1 Efficiency of the Pellet Production Line
6.2 Maintenance of the Machinery especially the Pellet Mill
Palm EFB pellet product is becoming more and more popular in the renewable energy
market, and due to its high heating energy and efficiency, it will sooner get the higher
market share.
Apart from advantages of the products, the availability and pricing are another 2
important factors for determining whether EFB pellet could becomes a popular
commodity. In order for the clients to know about this new renewable energy more
directly, we would like to discuss about factors influencing Palm EFB pellet price.
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3. Operation Cost
Operation cost can be classified into several field, such as:
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4. Transportation
Transportation fee is another pivotal factor influencing pellets price.
Assuming that pellets have to be loaded, hauled, and unloaded from the factory to
retailers and distributors, with trucks loading 20 tonne/truck, and a traveling average
distance of 50 miles, such as in America, this transportation cost is assumed to be
similar to have a fixed element of $15/tonne, and a variable element of $0.12/mile,
giving a total of $15.3/tonne in the case study. This transportation element, added to
the pellet price determined for a 14% IRR (rate of return), totaled $244.3/tonne at the
retailers/distributors gate. When comparing this price to an average retailer selling
price of $276/tonne for the U.S. internal market, a revenue margin of approximately
$31.7/tonne can be obtained by retailers. Based on the fact that the majority of
factories in the U.S. are in the range of 70,000 tonne/year, similar to the 75,000
tonne/year assumed for the case study, it demonstrates that the wood pellets industry
is profitable for both the majority of producers and distributors in the internal
U.S.market.
5. Additional Costs
Additional costs include marketing and sales fees, and incentives, which accounts for
marketing and sales costs for promotions, discounts, rebates, broker fees, placement
fees, and other forms of compensation and incentives.
6. Tips
Before putting into production, pellet manufacturer should pay more attention on the
below two aspects:
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day but others can operate 15 hours per day, others will absolutely make double profit
than the previous one.
Pellet mill from many suppliers in China are with reasonable price and high quality.
For customers, there are greater choices of the species, price and after-sale service.
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