How to start a timber recycling timber business

Yesterday's blog described the extent of the markets available for timber recycling. Perhaps that has whetted you appetite and you want to start something. It is not difficult.

First the plant. You can start on two paths. One is a big capital investment. The second is low capital cost, but higher operating costs. The second is lower risk path until the demand is proven, at which point you can make the big capital investment.

The capital investment path first. You'll need a large hardstand area on which to store waste timber, and potentially also chip and sawdust. It is important to keep the timber as free as possible from grit, particularly if you want to sell it for particle board manufacture. This hardstand would ideally be made of concrete to avoid being dug up. A load out ramp will also be required.

The plant you need then is a loader (large bucket to bulk out chip and sawdust), a small excavator with a grab to crush timber, and a single pass timber grinder from somebody like HAAS. All told, that will cost $1.5-2m.

The low cost path also needs a loader and an excavator, but the rest is more mundane. A low speed grinder with a magnet on the outfeed conveyor will do the initial size reduction, removing the main steel.

Hammel grinder for processing waste timber, photo from Town of Port Hedland

The "clean" product is then able to be ground using a high speed shredder, also with a magnet, and the finished product is cleaned up using a trommel. Again, with a magnet.

All of the plant used in the low cost path can be dry-hired, and so whilst more expensive to run, this is a good path to develop a market without the enormous upfront investment. More importantly, you can be strategic on what you purchase and what you hire so that you only purchase what can be transferred to an operation involving the single pass grinder.

Irrespective of which path you take, challenges are removing plastics, and perhaps unusually, stainless steel.

Stainless steel is not removed well using magnets, however it is increasingly used for pallet used in shipping. I don't have ready answers for the removal of stainless, but would love to hear suggestions. The best fix is to make sure your market can handle some stainless steel nails.

And so that's it. Simple. Kind of.

A business model for timber recycling

Let's imagine that you have a market where there is a lot of timber waste, be it pallets, furniture, general construction and demolition waste. You want to do something better than landfill, because

1. Timber in landfill consumes a lot of airspace. A length of seasoned pine has a specific density of 0.5. To put it another way, a tonne of seasoned pine perfectly stacked takes up 2 cubic metres. It's even worse when it is in the form of crushed pallets or furniture
2. It's the right thing to do

You don't want to start this unless there is a market, a business model.

Ideally, you'd have a particle board manufacturing plant close, but that is relatively unlikely. Particle board is made where the timber is grown, and most pine plantations are not near the cities where timber waste is generated.

This leaves you with the need to think laterally. In fact, this leaves the need to think up a business model that makes money in a number of ways.

One approach is to charge to accept the timber waste, chip it, produce a clean mulch (a bit more on the how of this in a future blog), and then sell the mulch. 

Timber mulch on its own is not an especially high value product. Timber mulch is competing with raw mulch, which can be as low as free at sites that specialise in linking tree lopping contractors with gardeners. 

Where it gets clever is when you add value to the mulch. A perfect way to add value is to colour the mulch using mineral oxide dyes. A company selling coloured timber mulch is Mossrock in Melbourne, converting timber waste into a high value product. It looks for all the world like expensive red gum (red colour) or peat (black) mulch, and retains its colour for years.

Red coloured hardwood timber waste. Image from Mossrock

To colour chip cost effectively, you need to remove the sawdust that comes about through the chipping process. If sawdust is in the mulch, it soaks up the dye and makes it all very expensive. Sawdust is easily removed through a screen (such as a trommel).

Having removed the sawdust by screening, you have a new product - sawdust. Sawdust is much easier to find a market for, especially in urban or peri-urban areas. It makes perfect animal bedding. Certainly for poultry, perhaps not for horses. A nail through a horse's hoof could lead to the horse being permanently lamed, and nobody would want this on their conscience.

But poultry bedding. There are invariably a lot of poultry farms near any large urban area, and they need bedding to be replaced with each batch of chickens. It is an expensive exercise, but one which ultimately produces a bedding rich in nitrogen (manure) and carbon (sawdust). Perfect for composting. 

Broiler shed, typically bedding is sawdust. Image from Australian Chicken Meat Federation Inc

So you contract with the poultry grower to maintain the bedding (supply, spread, remove) for a fixed fee. Turning the sawdust byproduct into a valuable fertiliser, and getting paid to do so.

And on the cycle goes. With clever thought, you add value throughout the chain for a business model that bootstraps itself.