wood pellet project

1. BY:
BAMBANGWIDYANTORO
PT. INHUTANI III
Indonesia – Korea Forum for Biomass Energy
Gran Melia – Indonesia, September , 5th 2013

2.  Background
 Preparation for Establishment
ofWood Pellet Factory
 Obstacles
 Effort to Accelerate
 Conclusion

3. BACKGROUND
Presented by
Bambang Widyantoro
Indonesia – Korea Forum for
Biomass Energy,
Gran Melia, September 5th 2013

4. Location
Distance: 8O km
from Capital City of
South-Kalimantan
(1.5 hours to the
location)
South Kalimantan

5. 1. The partnership scheme of wood pellet industry was Joint
Operation (approved by Minister of State Own Esterprise,
No. S-34/ MBU.1/2012, January, 24th 2012) between PT.
Inh-3 and PT. SL Agro Industry.
2. The factory was inside the working area (approved by
Minister of Forestry No. 358 /Menhut-II/2005), on the area
of + 7 Ha, in Village: Sabuhur, Sub-district: Jorong, District:
Tanah Laut, Province: South-Kalimantan.
3. Capacity of the factory was 30.000 ton/year and demand
raw material (small logs and wood-waste would be + 60.000
ton /year).
Preparation of Establishment

6. Benefits:
1. Utilizing small logs (Ø < 15 cm) and wood-waste of HTI;
2. Producing green energy to reduce Green House Gas (GHG);
3. Encouraging to grow up other wood pellet industry and power
plant in the local gov’t (remote area);
4. Absorbing man power and developing local gov’t and
communities
5. Mutual beneficieris between the parties.
Note: Korea Forest Service has signed MoU with Ministry of
Forestry, RI for biomass energy in March, 2009, and Gov’t of
South-Korea commited to reduce GHG until 11% in 2020.
6
6

7. 1. Investment + Rp 42 miliar (US$ 4 million)
for the capacity of 30.000 tons/year
2. NPV US$ 242.147
3. IRR 16,56 % by discount rate of 14,32 %
4. Form of cooperation : joint operation (JO)
5. Juration: 20 years
6. Feasible: technical, financial, and
bankable

8. YEAR ANNUAL
PLAN
WOOD POTENTIAL
ASUMPTION
FOR WASTE
(M3)
HECTAR
(HA)
VOLUME (M3)
Constructed Wood,
Ø ≥ 15 cm (M3)
Small Logs
Ø < 15 cm (M3)
1. 2014 1.426 24.000 16.000 14.000
2. 2015 1.500 23.600 35.400 14.750
3. 2016 1.530 61.200 91.800 28.687
4. 2017 1.737 69.700 104.000 34.740
5. 2018 1.452 58.200 87.000 29.040
6. 2019 1.585 63.500 95.000 31.700
7. 2020 1.998 80.800 119.800 39.960
8. 2021 1.971 79.100 118.000 39.420
9. 2022 1.998 79.600 119.400 39.960

9. 1. Export Port : Trisakti – Banjarmasin (South-
Kalimantan), 80 km from the location;
2. Main country destination : South-Korea ,
and other countries (Japan, China, Europe &
USA);
3. Main market: company of power plant in
replacing coal utilization.

10. 1. Kinds of trees containing high calory maybe not fit
to the land;
2. Lands out Java are unproductive (average less than
100 m3/ha) and fully conflict of land use;
3. Long way to run the project (permit ‘license’
process, consortium with many campanies in
South-Korea, etc);
4. High cost if using high quality machineries;
5. Low margin in wood pellet business.

11. 1. One of the electricity power company in South-Korea
for buying wood-pellet;
2. Depian for managing the project (Korean shareholder in
SL Agro – Joint Operation with PT. Inhutani III);
3. K-Sure for insurance of the project;
4. KIS for making feasibility study;
5. SK for securing forest plantation;
6. Halla for EPC (Engineering, Procurement, and
Construction);
7. IBK (Industrial Bank of Korea) for funding the project.

12. 1. Selecting short rotation coppice which is in 2 years could be
harvested and collaborating with local communities;
2. Planting trees are much more than HTI for constructed
wood (minimum productivity is 200 m3/ha);
3. Being easy to get license for wood pellet industry because
this industry utilize small logs and wood waste;
4. Quickly responding in making decision of the project (for the
consortium if any);
5. Combining some machineries to reduce operating cost;
6. Taking place of the factory close to the location of HTI
(maximum radius is 20 km and not too far from export port
or max 100 km).

13. 1. Industry of biomass energy (wood pellet) would be an
alternative business for PT. Inhutani III in the future;
2. Raw material (small logs & wood waste) could be utilised to
produce wood pellet to optimizing wood utilisation;
3. Accessibility of HTI becomes key point to reduce production
cost;
4. Selection of machineries for producing wood pellet should
be fit with the value of the product;
5. Continues and fixed market of wood pellet are very
importance to absorb the product (need a political will);
6. Consortium is needed to strengthen the project only.

14. Save theWorld with Biomass Energy
(e.g.Wood-Pellet)