Detailed Project Report (DPR) on Charcoal Manufacturing from Wood Chips (Capacity: 50 TPD)

CHARCOAL MANUFACTURING FROM WOOD CHIPS (CAPACITY: 50 TPD)

[EIRI/EDPR/4572] J.C.: 2789BTN

INTRODUCTION

Bhutan is known for its rich natural resource endowments and strict conservation policy. With 70% forest cover, only 5% of the forest area is designated to commercial management. Recent analyses advocate for increasing forest utilization to decrease the country's dependence on imports of forest-based products, particularly charcoal, as a mean to diversify the national economy. 

This study examines how increasing the forest area under commercial management might allow for sustainable charcoal production in Bhutan. Using an optimization model, cost efficient locations of charcoal production sites were identified at subnational level. Simulation results show that at a discount rate of 12% charcoal production is profitable in eleven of the nineteen districts. Domestic charcoal production has the potential to offset up to 61% of charcoal imports, requiring an increase in utilized forest area from 5% to 15% of total forest area. 

Charcoal production would represent a high value-added activity, with an average value-added share of 50.8%. Transportation and labor costs have only minor effects on profitability, comprising 11.7% and 2.5% of output value, respectively. Monte Carlo simulations and sensitivity analyses confirm the results that using a decentralized approach, Bhutan can increase commercial forest management without jeopardizing its highly acclaimed forest conservation agenda. Policy implications and areas of future research are briefly highlighted.

Charcoal is produced by heating wood in airtight ovens or retorts, in chambers with various gases, or in kilns supplied with limited and controlled amounts of air. High-temperature heating by all methods breaks down the wood into gases, a watery tar mixture, and the familiar solid carbon material commonly known as charcoal. Carbonizing ovens of plants designed for recovery of products other than charcoal are heated externally, and the wood is not in direct contact with the heat source. In another type, the only heat source derives from utilization of reaction heat for continuous chip conversion. Upright chambers have been developed that convert fines continuously or chunks in batches by forced circulation of hot gases through the wood, but liquid byproducts are not recovered. Also, horizontal retorts, both rotating and fixed, have been devised for the continuous carbonization of hogged material or raw mill fines. In kilns, the wood is heated directly and itself largely furnishes the heat needed for combustion. 

COST ESTIMATION

Plant Capacity            50 MT/Day  

Land & Building (3 Acres)    BTN 1.51 Cr    

Plant & Machinery                    BTN 1.70 Cr 

Working Capital for 2 Months    BTN 4.12 Cr 

Total Capital Investment          BTN 8.96 Cr 

Rate of Return                          22%

Break Even Point                      52%

CONTENTS

INTRODUCTION

USES & APPLICATIONS

PROPERTIES

CHARCOAL QUALITY:

INFLUENCE OF WOOD ON CHARCOAL QUALITY:

INFLUENCE OF CARBONIZATION PARAMETERS ON CHARCOAL QUALITY:

WOOD CHARCOAL SPECIFICATIONS

MARKET POSITION

AMOUNT SPEND FOR IMPORTING CHARCOAL (NU IN MILLIONS)

COUNTRY PRODUCES THE MOST WOOD CHARCOAL ?

COMPETITION ANALYSIS

STRUCTURE OF THE INDUSTRY

THE KEY STAKEHOLDERS

DEMAND AND SUPPLY

BHUTAN IMPORTED NU 2.79B WORTH OF CHARCOAL IN 2021

DEMAND AND SUPPLY

PRICING & MARKETING STRATEGIES:

INDIVIDUAL CONSUMERS CAN BE FURTHER CLASSIFIED UNDER THREE GROUPS:

SIMILARLY, INSTITUTIONAL BUYERS WOULD BE PRIMARILY MANUFACTURING UNITS IN THE FOLLOWING INDUSTRY SEGMENTS:

SOME VIABLE POSITIONING STATEMENTS COULD BE

PROMOTIONAL ACTIVITIES

SPECIAL ATTRIBUTES DESIRED BY TARGET CUSTOMERS:

ASSESSMENT OF COMPARATIVE ADVANTAGE

AVAILABILITY OF WOOD:

AVAILABILITY OF FIREWOOD:

POTENTIAL FOR MARKETING COLLABORATION:

RESOURCES

ELECTRICITY:

AVAILABILITY OF MANPOWER AND SKILLS

NEED FOR SKILL DEVELOPMENT

TOTAL EMPLOYED PERSONS BY TYPE OF ENTERPRISE, SEX AND AGE GROUP, BHUTAN 2022

PRODUCTION OF CHARCOAL  FROM WOOD CHIPS

PRODUCTION PROCESS

WOOD CHIPS PYROLYSIS

STAGES OF WOOD CHIPS PYROLYSIS

PRODUCTION OF WOOD CHIPS CHARCOAL:

PRODUCTION PROCESS

FIGURE: PRODUCTION PROCESS FLOW CHART OF WOOD CHIPS CHARCOAL

BIOCHAR PRODUCTION EQUIPMENT

SPECIFICATION AND PARAMETER OF BESTON BIOCHAR PRODUCTION EQUIPMENT

TECHNICAL SPECIFICATION OF 50 TONS PER DAY MACHINE

BIOCHAR PRODUCTION TECHNOLOGY – CARBONIZATION

WOOD CHARCOAL MAKING MACHINE

BAMBOO CHARCOAL MACHINE

SUGARCANE BAGASSE CHARCOAL MAKING MACHINE

TEST REPORT OF CHARCOAL FROM DIFFERENT MATERIALS

BIOCHAR PRODUCTION PROCESS

DESIGN OF BIOCHAR PRODUCTION UNIT

APPLICATIONS OF END PRODUCTS

BIOCHAR

FINISHED BIOCHAR FROM BIOCHAR PRODUCTION EQUIPMENT

PROCESS FLOW DIAGRAM OF CHARCOAL

MANUFACTURERS/SUPPLIERS

BUYERS IN OVERSEAS COUNTRIES

QUALITY CONTROL TESTING OF CHARCOAL

CARBON TETRACHLORIDE ACTIVITY

SURFACE AREA

HARDNESS

MESH SIZE

ASH CONTENT

DENSITY

INTERRELATION OF PROPERTIES

OTHER TESTS

TESTING OF ACTIVATED CHARCOAL

LIST OF COMPLETE PLANT MANUFACTURERS & SUPPLIERS

FOREIGN MANUFACTURERS

SUPPLIERS OF PULVERISER

SUPPLIERS OF BOILER

PRINCIPLES OF PLANT LAYOUT

PLANT LOCATION FACTORS

PRIMARY FACTORS

1. RAW-MATERIAL SUPPLY:

2. MARKETS:

3. POWER AND FUEL SUPPLY:

4. WATER SUPPLY:

5. CLIMATE:

SPECIFIC FACTORS

6. TRANSPORTATION:

A. AVAILABILITY OF VARIOUS SERVICES AND PROJECTED RATES

7. WASTE DISPOSAL:

8. LABOR:

9. REGULATORY LAWS:

10. TAXES:

11. SITE CHARACTERISTICS:

12. COMMUNITY FACTORS:

13. VULNERABILITY TO WARTIME ATTACK:

14. FLOOD AND FIRE CONTROL:

EXPLANATION OF TERMS USED IN THE PROJECT REPORT

1. DEPRECIATION:

2. FIXED ASSETS:

3. WORKING CAPITAL:

4. BREAK-EVEN POINT:

6. MARGIN MONEY:

7. TERM LOANS:

8. TOTAL LOAD:

9. LAND AREA/MAN POWER RATIO:

UTILITIES

POWER

WORKING

TOTAL MANPOWER AND PAYROLL

ENVIRONMENTAL ASPECTS

IMPACT ON DEFORESTATION

1. IMPACT ON DEFORESTATION

2. AIR POLLUTION

3. EFFECT ON HUMAN HEALTH

ELEMENTS CONSIDERED FOR ENVIRONMENTAL IMPACTS

DURING CONSTRUCTION PHASE

DURING OPERATION PHASE

OCCUPATION HEALTH AND SAFETY

MACHINERY PHOTOGRTAPH

RAW & FINAL PRODUCTS PHOTOGRAPHS

WOOD CHIPS (RAW MATERIAL)

CHARCOAL (FINAL PRODUCTS)

ORGANIZATION CHART

PLANT LAYOUT

TURNKEY CONSULTANT

PLANT LOCATION: BHUTAN

AT A GLANCE

COUNTRY CONTEXT

RECENT ECONOMIC DEVELOPMENTS

ECONOMIC OUTLOOK

LIST OF DOCUMENTS REQUIRED TO GET LICENSES

DOCUMENTS

OTHER LICENSES REQUIRED FOR THE SETUP:

IMPLEMENTATION SCHEDULE

THE KEY FACTORS THAT WOULD FACILITATE SUCCESSFUL AND TIMELY PROJECT IMPLEMENTATION ARE –

IMPLEMENTATION STRATEGY

IMPLEMENTATION SCHEDULE

PRE-PROJECT ACTIVITIES INCLUDE:

PROJECT IMPLEMENTATION SCHEDULE

APPENDIX – A:

01. PLANT ECONOMICS

02. LAND & BUILDING

03. PLANT AND MACHINERY

04. OTHER FIXED ASSESTS

05. FIXED CAPITAL

06. RAW MATERIAL

07. SALARY AND WAGES

08. UTILITIES AND OVERHEADS

09. TOTAL WORKING CAPITAL

10. TOTAL CAPITAL INVESTMENT

11. COST OF PRODUCTION

12. TURN OVER/ANNUM

13. BREAK EVEN POINT

14. RESOURCES FOR FINANCE

15. INSTALMENT PAYABLE IN 5 YEARS

16. DEPRECIATION CHART FOR 5 YEARS

17. PROFIT ANALYSIS FOR 5 YEARS

18. PROJECTED BALANCE SHEET FOR (5 YEARS)