Wood Straw Pellet Production Line in Indonesia

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Background of the Client and Project Motivation

The client is a mid-sized Indonesian agricultural cooperative, consisting of more than 300 local farmers who cultivate rice, corn, and cassava, as well as partners from small-scale wood processing industries. For decades, agricultural residues such as rice straw and corn stalks were either openly burned in the fields or left to rot, causing severe air pollution, greenhouse gas emissions, and fire hazards. Similarly, sawdust, off-cuts, and other wood residues from carpentry workshops were discarded in landfills.

Over the past five years, the Indonesian government has implemented policies to increase renewable energy’s share to 23% by 2025. Biomass, especially agricultural residues, is a key component of this plan. Incentives such as feed-in tariffs, tax exemptions, and simplified licensing have created a favorable environment for investment.

The cooperative decided to invest in a wood straw pellet production line for three main reasons:

1. Environmental Responsibility – Reducing open burning of straw and wood waste, which is currently a major contributor to haze and air pollution in Java and Sumatra.
2. Economic Diversification – Creating a new revenue stream from agricultural and forestry by-products, providing additional income for local farmers.
3. Energy Security – Producing biomass fuel as an alternative to coal and imported oil, supporting Indonesia’s renewable energy goals and reducing dependency on fossil fuels.

The main products are biomass pellets made from a blend of rice straw, corn stalks, cassava stems, and wood residues. The pellets are used for domestic household heating (especially in rural areas where LPG is expensive), industrial boilers in food and textile factories, and partial export to South Korea and Japan.

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Raw Materials

Before pelletizing, it is essential to analyze the raw materials available for the project. Indonesia is rich in both agricultural straw and wood processing residues.

Overview of Feedstock Availability

The table below summarizes the main raw materials intended for the project.

Processing Needs

• Moisture Reduction: Straw and cassava stems need pre-drying to reach the ideal 12–15% moisture range.
• Particle Size Control: Raw materials must be crushed to less than 5 mm before pelletizing.
• Blending: Mixing wood residues (rich in lignin) with straw helps improve pellet durability and calorific value.

In summary, the abundant supply of agricultural residues combined with steady wood waste streams ensures year-round raw material stability, making the project sustainable.

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Production Process Flow

The production line follows a standardized process, customized for the properties of Indonesian straw and wood. The main stages are:

1. Raw Material Collection & Storage – Farmers deliver baled straw, corn stalks, and cassava stems. Wood residues are collected weekly from carpentry workshops.
2. Pre-Shredding – A bale breaker and primary crusher reduce raw material size for easier handling.
3. Drying – Rotary drum dryers lower moisture content to 12–15%. In this project, drying is partly fueled by pellet rejects and wood scraps, lowering energy costs.
4. Fine Grinding – Hammer mills refine material to 2–5 mm particles.
5. Mixing & Conditioning – Raw materials are blended to achieve an optimal formula:
   • 40% rice straw
   • 25% corn stalks
   • 15% cassava stems
   • 20% wood residues
6. Pelletizing – Using a ring die straw wood pellet mill, conditioned material is compressed into cylindrical pellets (6–8 mm diameter, 20–30 mm length).
7. Cooling – Pellets are cooled with counter-flow coolers to stabilize moisture and temperature.
8. Screening – Vibrating screens remove fines, which are recycled back into the system.
9. Packaging – Final pellets are packed in 20–25 kg bags for domestic sales and 1-ton jumbo bags for export.

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Equipment List

The straw wood pellet production line was designed with efficiency, durability, and easy maintenance in mind.

All equipment was supplied by RICHI Machinery, with installation, commissioning, and operator training included in the contract.

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Utilities and Infrastructure

Electricity Demand

The total installed power of the wood straw biomass pellet production line is 520 kW, with average operational load of 320 kW. Electricity is supplied from the local grid, supplemented by a 250 kVA standby generator for outages.

Water Consumption

The process requires about 900 tons of water annually, mainly for dust suppression, cooling, and domestic use. Wastewater is treated on-site using a biological treatment tank, and recycled where possible.

Labor Structure

The wood straw pellet plant employs 14 workers, including:

• 8 production operators
• 1 technicians (mechanical & electrical)
• 1 quality inspectors
• 2 warehouse/logistics staff
• 2 administrative and management staff

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Environmental Protection Measures

Air Pollution Control

• Cyclones and bag filters capture dust during grinding and pelletizing.
• Low-NOx biomass burners in the dryer reduce emissions.
• Stack emissions comply with Indonesian Ministry of Environment regulations.

Noise Control

• Pellet mills and hammer mills are housed in soundproofed enclosures.
• Operators use personal protective equipment (PPE).

Solid Waste Management

• Pellet fines are recycled into the process.
• Ash from biomass boilers is used as a soil amendment.

Water Protection

• Treated wastewater is reused in dust suppression.
• Zero discharge policy for industrial effluents.

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Economic Analysis

Investment Breakdown

Revenue and Profitability

• Annual Output: 15,000 tons pellets
• Average Sales Price: USD 120/ton (domestic), USD 145/ton (export)
• Revenue: ~USD 1.9 million/year
• Gross Profit: ~USD 1.2 million/year
• Payback Period: 2.5 years

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Market Prospects in Indonesia

Indonesia’s renewable energy roadmap identifies biomass as a crucial contributor to the 23% clean energy target. The following drivers ensure strong market prospects for the wood straw pellet industry:

1. Abundant Raw Materials – Indonesia produces over 150 million tons of agricultural residues annually, most of which remain underutilized.
2. Growing Domestic Demand – Rising LPG and coal prices push industries to adopt cheaper biomass fuels.
3. Export Potential – Neighboring countries like Japan and South Korea import large quantities of pellets under long-term contracts.
4. Policy Support – Tax reductions for renewable energy projects and guaranteed feed-in tariffs improve profitability.

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Conclusion

The wood straw pellet production line in Indonesia demonstrates how agricultural residues and wood waste can be transformed into valuable renewable energy products. With a design capacity of 15,000 tons per year, modern equipment, and robust environmental measures, the project serves as a model for sustainable biomass utilization in Southeast Asia.

Backed by strong policy support, abundant raw material availability, and growing domestic and export markets, the project is not only financially viable but also environmentally and socially beneficial.

This case underlines Indonesia’s potential to become a regional leader in biomass pellet production, while also highlighting the role of professional engineering and equipment suppliers such as RICHI Machinery, whose technical expertise ensures reliable and efficient operation.