Kiln dried Firewood - The future ?

[ash_smith123]

That's the paradox....

 

 

 

A business plan that relies upon subsidy is not a business plan unless it can support itself without the subsidy.

 

 

 

It's only a personal view but I see the RHI as an incentive to encourage lower carbon dependent behaviour. Installing a wood burning kiln to dry firewood simply to claim RHI is hardly in the spirit of reducing CO2 emissions. A bit like the benefit fraternity knowing all the tricks to get maximum state pay-out. It doesn't quite sit right with me even if it is technically 'within the guidelines.'

 

 

My business plan isn't reliant on the RHI, I've said it before I would have fitted kilns if the RHI was about or not. For me it has massively expanded the business as I can now supply my demand, which is growing rapidly off the back of being able to sell kiln dried firewood. I couldn't keep up with my seasoned customers before I had kilns, just could never get ahead of myself but now I am.

[Chalgravesteve]

That's the paradox....

 

A business plan that relies upon subsidy is not a business plan unless it can support itself without the subsidy.

 

It's only a personal view but I see the RHI as an incentive to encourage lower carbon dependent behaviour. Installing a wood burning kiln to dry firewood simply to claim RHI is hardly in the spirit of reducing CO2 emissions. A bit like the benefit fraternity knowing all the tricks to get maximum state pay-out. It doesn't quite sit right with me even if it is technically 'within the guidelines.'

 

A good business plan looks at all possible areas of income and analyses that against all fixed and variable costs, leaving you with the likely and potential profit.

 

In the case of RHI for kiln drying wood, as the business gets bigger from actual operational sales, the "subsidy" income from RHI becomes less important. Tier One is the only bit "worth" having in that respect, so a 195kW boiler on tier one will produce about £20,000. If the business employs 2 or three people, then you need to sell £100,000 worth of firewood to make a reasonable profit on top, and you can't be making much if your gross income is £120,000 and you emply three people, plus all the rest of the business costs! But already at that level, RHI is by far the smaller element of the business and as the business contiues to grow, more costs get added as well.

 

A kiln has a finite amount of volume you can get through it. Once you reach that maximum, the only way to expand is to add another one, and RHI is already at a level now where you would not do it from scratch. However, an expanding business might well be able to still do so.

 

As far as I am concerned, its a very sound business plan!

[kevinjohnsonmbe]

Your business plan in deep, deep, serious trouble at a very basic level!

 

Just looked at your website....

 

you're selling 4+ bags for £37.50, £10 cheaper than the cost of 1 bag, £47.50!

 

Since it doesn't specify "each", you could be held to 4+ bags for £37.50.

 

(Just in case it's taken out of context, I'm just jesting, I don't really have a horse in this race so nothing serious and certainly no criticism intended. Good luck to you, sounds like you've got a good set up)

[Chalgravesteve]

LOL I amended it to show the £37.50 per bag figure as people seemed to be incapable of realising that £150 for 4 bags was substantially cheaper than buying 4 x 1 bags @£47.50!

 

Next time I'm updating the website I will maybe add the word "each"

[Logsnstuff]

had to laugh I get comments about ripping people off charging £120 for a cube bag and your charging £190 (based on single price) for equivalent in the barrow bags. hope you do well with them. we charge £38 per bag hardwood min 2 bags for delivery and we refuse to do more than 2 steps.

[arboriculturist]

My business plan isn't reliant on the RHI, I've said it before I would have fitted kilns if the RHI was about or not. For me it has massively expanded the business as I can now supply my demand, which is growing rapidly off the back of being able to sell kiln dried firewood. I couldn't keep up with my seasoned customers before I had kilns, just could never get ahead of myself but now I am.

 

Are you saying that an investment of say 36K for a Glen Farrow setup would be worth it without the RHI payments and you would have spent that amount of money to Kiln dry your firewood ?

[Duffryn]

Are you saying that an investment of say 36K for a Glen Farrow setup would be worth it without the RHI payments and you would have spent that amount of money to Kiln dry your firewood ?

 

Given the reduction in space required, freeing up of working capital tied up in large volumes of wood waiting to dry and the ability to react to demand, then over the long term the investment of say £40K in a kiln even without RHI will deliver a decent ROI so long as the fuel is free or very nearly free. Even at the current reduced RHI levels a kiln still adds up to a no brainer at sub £40K.

[arboriculturist]

Given the reduction in space required, freeing up of working capital tied up in large volumes of wood waiting to dry and the ability to react to demand, then over the long term the investment of say £40K in a kiln even without RHI will deliver a decent ROI so long as the fuel is free or very nearly free. Even at the current reduced RHI levels a kiln still adds up to a no brainer at sub £40K.

 

Good to see you back on the forum.

 

Many of the views over the last few months on the pros and cons appear to be based on your extensive efforts over the years and your comments above are extremely interesting from my perspective.

 

Have you a view on Solar Thermal used to dry timber ?

 

I am sure you have explored every avenue in previous years. The RHI is at a premium as you know of course.

[ash_smith123]

For me Yes 100%!.... But...I wouldn't buy a glenfarrow for a start, from my experience anyone who is selling a 40ft container kiln that isn't insulated is bonkers but I built my eco Angus system for £18,000. Asset finance costs me around £220+vat a month. Before I had the kiln I was only selling around 250-300 cubic metres max a year and selling out by October so had pretty much no trade after that. Until I could get anymore dry that would be the year after. Could never ever get a head of myself. Last winter I sold 1000+ cubic metres and kept my customers supplied with dry wood throughout the winter. We were then too busy and the kiln couldn't keep up with my demand so we built another one. We have been selling as much wood over the last 3 months than we did over a 3 month period in the winter. So that £220+vat of asset Finance may seem like a lot but I have expanded the business 4 fold+ in a year because of it! I can categorically say I wouldn't be where I am now without my kilns. For my business it had been worth it and would have been worth it without the RHI. The RHI has helped as I can now turn up to work with the knowledge that my bills will be paid before I even sell anything. I don't think many businesses would have that same situation.

I've said it a few times a kiln isn't for everyone!

[Duffryn]

Good to see you back on the forum.

 

Many of the views over the last few months on the pros and cons appear to be based on your extensive efforts over the years and your comments above are extremely interesting from my perspective.

 

Have you a view on Solar Thermal used to dry timber ?

 

I am sure you have explored every avenue in previous years. The RHI is at a premium as you know of course.

 

Why thank you ! Unfortunately solar didn't work for our business model so I didn't explore it in too much detail.

 

If I were a firewood merchant (purchasing more than 500 tonnes of cord wood pa ) I would act NOW and put in a Farm 2000 boiler (now have RHI compliance on wood and straw as a fuel) on medium tariff or a GF205 boiler on the medium tariff. My preference would be the Farm 2000 but the GF205 is also an option. The window of opportunity to act is small and the ROI is better and more certain than anything else out there.

Edited July 24, 2015 by Duffryn