Set-up a Rice Straw Pulp Mill

Dr Rushdan bin IbrahimPulp and Paper Laboratory,

Forest Research Institute Malaysia (FRIM)

STPK 202010 November 2020

Outline• Introduction

• Problem statement

• Objectives

• Methodology of set-up pulp mill

• Producing pulp

• Producing moulded product

• Biodegradable test

• Toxicity test

• Target market

• Operation & revenue

• Conclusion

Introduction

• Due to the environmental effect caused by deforestation, interest in utilizing non-wood material for pulp production is increasing.

• Rice straw, non-wood material, is produced globally as a by-product of rice cultivation.

• The greatest producers of rice are mainly in Asia, particularly China and Indonesia. It is estimated that 600 million tons of rice are produced in 2004.

Problem Statement

•Annually, 400,000 tons of rice straw is generated in the area of Muda Agricultural Development Authority (MADA).

• The options for the disposition of rice straw are limited by the great bulk of material, slow degradation in the soil, harbouring of rice stem diseases, and high mineral content.

• Field burning is fast, economical and removes disease organisms, but is now tightly regulated.

• In the possibility utilization of rice straw, Muda Agricultural Development Authority (MADA), Alor Setar, Kedah, and Forest Research Institute Malaysia (FRIM) had carried out technical review and laboratory trial in producing pulp, paper pulp moulding from rice straw since 2007.

Novelty

The results indicated that rice straw possess great potential as a pulping raw material for pulp and moulded & papermaking. A patent was filed by FRIM (PI 2014703372: Method of Producing Pulp from Rice Straw) and was granted in 2019.

Chronology of rice straw fibre pulp for packaging productsresearch project

2007 2008 2014 2015 2016 2017 20182009 2010 2011 2012 2013

1st Meeting with MADA

• MOU with MADA• R&D grant RM 40,000

• FRIM ID 15/2014• PI 20144703372• Free the Seed (FTS) Sdn. Bhd. Interested to

commercialise this R&D through consultation RM 25,000

2015 - Gold Medal and Best Award at MTE

2016 - MOU for pre-commercialization between MOSTI and FTS Sdn. Bhd.

2018 – a mill was set up at Gurun, Kedah by FTS Sdn. Bhd.

2017 - Licensing RM 50,000 and Royalty 3% for FTS Sdn. Bhd.

2019

2019 – a patent was granted MY-171898-A

Objectives

1. To further develop the production method for producing rice straw pulp for packaging products to be commercially viable, and

2. To produce 10 tonnes per day (1 shift – 8 working hours) of unbleached mechanical pulp for packaging products.

Methodology of set-up pulp millOrder equipments & construction materials

Erection of insfracture – civil, electrical, instrumentation, mechanical, utilities & offsite facilities

Commissioning

Optimization

Pulp production

Pulp molded product trial

Data analysis

End of report

Installation

Location of Free The Seed Sdn. Bhd., Gurun Industrial Area, Gurun, Kedah

Site

Site preparation

Building erection

Machinery shipping

Machines installation

Pulp mill ready

Producing pulp Soaking

Refining

Press screening

Pulp oversize

Pulp washing & thickening

Moulding machine

Cutting

Effluent treatment

Rice straw

Recycle water storage

Moulded product

Rice straw collection from rice field.

Storage and transportation of rice straw

Rice straw cutting

Rice straw soaking

Rice straw Refining

Rice straw Press screening

Pulp washing & thickening

Producing moulded product

Moulded products

• Biodegradable Packaging products for F&B Industry (Food-Service industry & etc.)

• Biodegradable Packaging products for Medical Industry (Biodegradable Bed-Pans, Bowls, Urinal Containers & etc.)

• Biodegradable Packaging products for Industrial Packaging Products (Electronic packaging & etc.)

(Freedonia Custom Research. 2018. 2018 Global Molded Pulp Market Outlook)

TARGET MARKET

Bio-degradable

Products…in 180days!

Day-120

Day-60 Day-100

Day-180

Validated by

European

Testing

Bodies

Toxicity test

• Compliance to Regulations of European Food Safety Standards 1935/2004

• Compliance to Regulations of European Heavy Metal Standards GB/T 20770-2008

• Compliance to Regulations of European Chloromequat Standards AN14-09318

• Compliance to Regulations of European Food Sensory Test Standard DIN10955

Operation• Annual rice straw orders to Persatuan Peladang Kedah (PPK)

from Free The Seed is 1,000 ton first year. Every year increase by 30%.

• 1 ton rice straw PPK sell RM100 + RM 30 transportation

• 3.0 ton rice straw (m.c. = 50%) = 1 ton pulp

• 1 ton rice straw pulp = 10,000 pcs Biodegradable Plates

• Customers: COOP UK, Marks & Spencer UK

• Order per year = 40 container x 20ft per year, 15 ton per container, 600 ton per year @ RM6 million per year sales contract

YEAR 1 YEAR 2 YEAR 3

Sales (RM) 5,304,000 5,304,000 5,304,000

Production (ton) 3,120 3,120 3,120

Gross Profit (RM) 1,656,426 1,646,739 1,636,568

Net Profit (RM) 670,208 646,748 643,479

Selling Price/ton (RM) 1,700 1,700 1,700

Total Fixed Costs (RM) 953,089 967,056 960,358

Variable Cost/ton (RM) 1,180 1,183 1,186

Gross Profit Margin (%) 31% 31% 31%Net Profit Margin (%) 13% 12% 12%Breakeven Point (Year) 5 Years NPV (based on 8% Interest p.a.) RM 9.3 MillionIRR 108.0%

REVENUE PROJECTION

• The waste rice straw cellulose fiber is be mechanically pulped to extract the cellulose fibers in mill scale.

• A biodegradable, compostable and toxic free product, can be made from 100% waste rice straw’s cellulose fiber.

• More than 200,000 hectares of rice field in Peninsular Malaysia.

• Generating about 2.6 million tonnes of rice straw annually.

• RM150/t rice straw - RM390 million to farmers.

• 80% yield - 2 million tonnes of pulp.• RM1,700/t pulp – RM 3.4 billion

Conclusion

FOR YOUR ATTENTION

THANK YOU