Wood Pellet Factory Project in Canada

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The First Call – “I Have Wet Sawmill Waste”

The client had been running a sawmill in British Columbia for twenty years. He had access to abundant wood processing waste– sawdust, chips, and offcuts from local mills. The material was wet (40% moisture) because sawmills store waste outside.

He had a site (3,385m²) – a former industrial property with existing buildings. He had grid electricity, municipal water, and a water recycling pond from the previous operation. He had raised $0.8 million from investors and bank financing.

His question: “Can I set up a 6t/h wood pellet factory project in Canada that processes wet sawmill waste?”

We asked about his raw material. He sent samples. The wood waste was a mix of spruce, pine, and fir – clean, no paint, no glue. Moisture was 38-42%. He needed a dryer.

We told him yes. A 6t/h wood pellet factory project in Canada would need a wood dryer and a reliable heat source. But the dryer could burn self-produced pellets or the driest wood waste, keeping operating costs manageable.

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Raw Materials – Wet Wood Waste, Local Source

The client set up collection agreements with six sawmills within a 100km radius.

The client pays $25/ton delivered. The wood waste is clean – British Columbia sawmills process untreated lumber.

Total input 20,100 tons, output 15,000 tons. The 5,100-ton difference accounts for:

• Moisture removed in dryer: approximately 4,600 tons (water evaporated)
• Dust collected: approximately 500 tons (returned to production)

The client also uses about 600 tons of self-produced pellets annually as fuel for the wood chip dryer.

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Why Drying Is Necessary – And How We Designed It

At 38-42% moisture, wood waste cannot be pelleted directly. Pellets would crack, mold, and fall apart. The client needed a dryer.

We specified a rotary drum dryer (6 t/h capacity) fired by a biomass furnace burning self-produced pellets.

Dryer specifications:

• Type: Rotary drum, direct heating
• Capacity: 6 t/h wet input
• Inlet moisture: 38-42%
• Outlet moisture: 17%
• Retention time: 25-30 minutes
• Fuel consumption: 600 tons of pellets per year

The dryer is a significant investment in this 6t/h wood pellet factory project in Canada – $450,000 including the furnace, ductwork, and cyclones. But without it, the client couldn’t use his lower-cost wet feedstock ($25/ton vs $60-80/ton for dry material).

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Equipment List – Complete 6 t/h Line

Equipment price (EXW Qingdao port): $410,000 USD

Shipping: Twelve 40-foot containers. Departed Qingdao September 15, 2023. Arrived Port of Vancouver, Canada on October 28, 2023. Sea freight: $24,000 USD. Rail freight to British Columbia interior (about 200km) added $6,000 USD.

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Facility Layout – 3,385m²

The client’s site was 3,385m² with existing buildings.

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Process Flow – Complete 6 t/h Line

Here’s how the 6t/h wood pellet factory project in Canada actually runs.

Step 1 – Chipping
Wet wood waste is fed into the crusher. Output size: 20-30mm chips.

Step 2 – Grinding
Crushed material is fed into the hammer mill. Output size: 5mm particles.

Step 3 – Drying
Ground material passes through the rotary dryer. Inlet moisture: 38-42%. Outlet moisture: 17%. The dryer uses a biomass furnace burning self-produced pellets (600 t/yr).

Step 4 – Pelleting
Dried material is fed into three wood pellet presses. Each mill produces 1.5 t/h. Total sustained output: 4.5 t/h (the client runs at 75% capacity for reliability). Die size: 8mm for industrial export.

Step 5 – Cooling and screening
Pellets are cooled naturally and screened. Fines return to the hammer mill.

Step 6 – Bagging and export
Pellets are bagged into 15kg retail bags and 1,000kg bulk bags for container shipping.

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The Canadian Market for Wood Pellets

Canada is one of the world’s largest wood pellet producers, with annual production of over 3 million tons. The country has:

• Abundant sawmill residues from British Columbia, Alberta, and Quebec
• Established export routes to Europe and Asia (via Port of Vancouver)
• Growing domestic demand for biomass heating
• Government support through CleanBC and other programs

The client’s pellets are exported to the United Kingdom and Japan, where demand for sustainable biomass is strong.

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What the Client Learned

We spoke with the client in July 2024, five months after startup. Here are his observations.

What worked well:

• The dryer. “Without it, I couldn’t use wet BC sawmill waste.”
• Three-mill configuration. “If one mill needs maintenance, I run two mills at 3 t/h.”
• Water recycling pond. “No discharge to local rivers. Regulators are happy.”

What he would change:

• “The dryer is the bottleneck.” He’s adding a second dryer ($350,000) to reach full 6 t/h.
• “I need more covered storage.” Wet material freezes in BC winters. He’s adding heated storage ($200,000).
• “Export logistics are complex.” He’s hiring a logistics coordinator.

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What We Provided

For this 6t/h wood pellet factory project in Canada, we delivered:

• Process design – Complete wood pellet production line with drying for wet feedstock.
• Equipment package – Crusher, hammer mill, dryer, three wood granulator machines, cyclones, baghouses.
• Installation supervision – Our engineer spent 25 days in British Columbia.
• Operator training – Two weeks on dryer operation, pellet mill maintenance, and Canadian compliance.
• Spare parts kit – Three spare dies (one per mill), bearings, belts, and filter bags.

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Thinking About a Pellet Factory in Canada?

If you’re looking at a 6t/h wood pellet factory project in Canada – or anywhere with wet sawmill waste – here’s what we’ve learned from this project:

• Drying is essential for wet feedstock. Budget $400,000-500,000 for a 6 t/h dryer.
• Self-produced fuel for the dryer makes economic sense. The client’s dryer burns pellets that cost him $25/ton to produce.
• Canada has strong export markets. British Columbia pellets are in high demand in Europe and Asia.
• Water recycling is required. Canadian regulations require zero discharge for wood pellet facilities.

The client in British Columbia is already profitable and planning to expand to 12 t/h. If you have access to wet sawmill waste and export markets, this model works.

Contact us for a site assessment or equipment quote. We can provide references from this wood pellet plant construction project upon request.