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Pellet Plant Investment Hugs Golden Time with Multiple Pellet Plant Designs

By Jack Huang    Sep 19, 2014

Pellet plant

Pellet plants have been constructed all over the world for pellet fuel production to ease the energy and environment pressure. However there are still huge demand for wood pellet fuel. It is estimated that there will be around 50 to 80 million metric tons of wood pellets demanded by EU nations by the year 2020. It means domestic wood pellet supply will be not sufficient to many countries and pellet plant constructing and pellet importing will be the way.

sawdust pellet plant in bulgaria
A typical wood pellet plant under construction

Economic benefits of building a pellet plant

Labeled with green and sustainable fuel, wood pellets are welcomed as a replacement of fossil fuels for energy production and pellet fuel production is subsided by majority of governments all around the world. Comparing with oil, one ton of wood pellets reduces CO2 emission around 105 tons. While on the other hand, one ton of wood pellets equals to 2.8 barrels of #2 fuel oil in terms of net energy output. (See the comparisons of wood pellet fuel with other fuels, such as coal, gas, electricity, etc, click here.)

Nowadays, with the favorable situations, pellet production business is developed with pleasing momentum. In USA market, the price for small bag wood pellets is around 170 USD/ton and the large package is abound 135 USD/ ton. In Sweden, wood pellet price is about 150 USD / ton and the FOB price of bulk wood pellets is around 80USD/ ton. The situation is quite the same in other EU countries. Another words, to build a wood pellet plant and produce wood pellet is quite a profitable business.

Wood pellet plant prerequisites

Building your own pellet plant does have some premises: raw material availability, location of factory, distance among factory, port and targeting market, etc. Lacking of full consideration of each one of said points may cause problems in production, logistics or shipment. Detail explanations go here:

1.Raw materials: Which is the best choice for your pellet production, sawdust, wood chips, tree branches, straw, stalk, palm fiber? It is also necessary to consider overall quality of raw material such as, size, moisture, heat values, ashes, etc. When it comes to raw material, we are talking about not only what kind of pellets you are producing, but also the equipments you need with your pellet plant, as different material need different equipments. It decides the construction of wood pellet plant and the quality of final pellet products, that is, your investment and your profits.

2. Pellet quality: Quality is another factor affects your profitability when the market price is fixed. Superior quality will be your competitive advantage while bad pellet quality or a bad reputation for wood pellet quality will be lethal disadvantage. So quality pellet mill is the most important choice you are going to make.

3. Financing: Financing is very important for wood pellet plant construction and your profits . Generally, the investment and your pellet plant size are in direct ratio. ( See the picture below for a better understanding.)

Pellet cost versus wood pellet plant size


Typical production processes in a wood pellet plant

How pellets are made in a wood pellet plant? Generally, it will go through the following procedures:

Chipping: Harvest wood will be pre-processed by a wood chipper. The chipped woods will be reduced into proper size, less than 6 mm.

Screening: Impurities such as stones, metals, or others will be screened out of raw materials.

Drying: The desired moisture content will be achived by drying. Drum driers will be the choice for standarded wood pellet plant.

Pelletizing: Prepared raw materials will be forced thrgouth the die hole of pellet mills with great pressure to extrude the pellets which is hot and soft.

Cooling: Hottly extruded pellets will be harden and strenthened after air cooling.

Packaging: Pellets are packaged into bags for the sake of pellet protection and convient distribution.

Storage and distribution: Pellets should be kept in dry conditions and be stored in tanks, containers, or silos. Pellets are distributed in bag or in bulk form by truck or other vehicles.

Pellet plant flow chart
Pellet plant flow chart

Equipments required with a wood pellet plant:

Wood chipper: to reduce tree branches and logs into small piece.

Hammer mill: to crush wood chips, stalks, straws or other large size raw materials into powder with the size of less than 5 mm.

Dryer: to lower the moisture content and make the materials ready for direct pelletizing.

Pellet machine: the core of wood pellet plant, which can be classified into flat die pellet mill and ring die pellet mill( see the different of them by clicking here). However, for large scale complete wood pellet factory, ring die pellet machine is usually the choice.

Cooler: to cool the hot pellets to room temperature.

Other auxiliary facilities: packing machine, conveyor, etc.

Gemco wood pellet plant for sale

As a pellet plant designer and constructor, Gemco recommends the following typical pellet plant design which can meet the requirements of various pellet producers.

1-1.5 t/h small wood pellet plant design

It is highly recommend for small scale pellet production or when the raw materials and budget are limited.

Power: 127.5KW (with drier); 109.5KW (without drier); 200KW (with crusher and drier)

Capacity: 1-1.5 t/h biomass pellets (depending on the type of raw material)

1-1.5 ton wood pellet plant desgin for sale
Diagram of pellet plant with capacity of 1-1.5 t/h

Wood pellet plant design: Crusher/chipper equipments → conveyor → sieve → small drier (not necessary when the moisture content is low) → screw feeder → ring die pellet mill (model 420, 1 set) → conveyor → cooling system → bagger


  • Simple structure, one ring die pellet mill is stalled.
  • Small space required (800-1500㎡), ash control is easy.
  • Easy operation and labor saving.
  • Easy maintenance

Popular 2- 4 t/ h wood pellet plant

It is the most popular pellet plant design, which can meet the pellet output requirement of our most customers.

Power: 250KW (with drier); 200KW (without drier)

Capacity: 2-3 t/h (with 2 sets of model 420 ring die pellet mill); 3-4t/h (with 2 sets of model 508 ring die pellet mill)

2-3 t pellet plant design for sale
Diagram of pellet plant with capacity of 2-4t/h

Wood pellet plant design: Crusher/chipper equipments → conveyor → sieve → small drier (not necessary if the raw material has a fine moisture) → screw feeder → ring die pellet mill (model 420, 1 set) → conveyor → cooling system → bagger


  • Wide capacity choice, varying from 2 to 4 t/h.
  • Easy construction and customization design is possible.
  • Small location requirement(less than 1600㎡). 

Large scale wood pellet plant with capacity above 3 t/h

It is highly recommended for large scale wood pellet production when materials and investment is adequate for high profit return is guaranteed.

Pellet plant design for sale with capacity above 4 tons per hour
Diagram of pellet plant with capacity of 4+ t/h

Wood pellet plan design: Conveyors (x sets) → sieves (x sets) → large drier (x sets, not necessary if the raw material has a fine moisture) →temporary feed storage → lifter → feed distribution system → screw feeder (x sets) → ring die pellet mill (model 420 or 508, x sets) → long conveyor → larger cooler → silo → automatic weighting system


  • Customized pellet output, which can high up to 20 t/h, which means 150,000 t/y.
  • Cost-effective for large pellet production.
  • Area saving for the modular, replicated parallel design,
  • High efficiency and equipment failure prevention.

Advantages of Gemco pellet plant

  • Innovative and custom pellet plant design.
  • Wood pellet plant manufacture, lower your initial investment cost and pellet production cost.
  • Complete installation service and reliable after-sale service and support.
  • Pellet plant master with rich experience in pellet plants construction.

Pellet plant cost analysis

As the development of ring die pellet mill technology in China, Chinese pellet plants can compete with those from USA, UK, etc and wins the international market with its obvious price advantage, which will be analyzed generally in the following paragraphs. The heart of a wood pellet plant are the ring die pellet mills and the key parts and main wearing parts of a ring die are rollers and die. One piece of roller can be used to produce about 200-600 ton of pellets, which costs around 1000-3000RMB; while a piece of ring die can produce 700-1000ton of pellets, which costs above 3000RMB. So we can draw a 1 ton/ h wood pellet plant cost sheet here( based in China):

1 ton wood pellet plant cost sheet

Gemco pellet plant photo exhibition

Wood pellet mill full view
1 ton wood pellet plant in UK

1 ton wood shaving pellet plant in Thailand
1 ton wood shaving pellet plant in Thailand

3 ton wood pellet plant in Malaysia
3 ton wood pellet plant in Malaysia

2-3 tons wood pellet plant in Serbia
2-3 tons wood pellet plant in Serbia

4-5 tons sawdust and wood shaving pellet plant
4-5 ton sawdust and wood shaving pellet plant in Vietnam