How to Start a Charcoal Production Business

A need for cheaper energy has increased the demand for charcoal both locally and internationally. Charcoal is used for cooking, to provide heat and power generation.

Charcoal is the primary source of fuel for domestic use in rural areas. In developed temperate countries it is used to provide heat during winter.

Other alternative sources of power are fuel, diesel, gas, kerosene and electricity. Most of these sources attract higher prices than charcoal making the product essential for low income earners and rural dwellers.

The export aspect of the business is also highly lucrative attracting high premium and foreign exchange. Top consumers of the product are America, Europe and Asian countries. 

Under high temperatures burnt wood is transformed into charcoal. There are strict provisions guiding the enterprise such as deforestation, pollution and production method.

There are also serious ethical implications to charcoal business such as deforestation, environmental pollution and global warming. In advanced countries there is a serious shift from charcoal based power to other less toxic and environmental degrading products.

 The major challenge in charcoal business is sourcing raw material. Other challenges are transportation costs, licensing and permits including method of production.

 Before starting the charcoal production business you need to write a business plan. The charcoal production business plan covers sourcing, production, funding, licenses and exportation.

Advantages of Starting a Charcoal Processing Company

An advantage is the availability of raw material. There are lots of trees that have suitable wood-grade charcoal. The availability depends on your geographical location and government legislation guiding the trade.

The business is easy to understand and execute with little tutelage. In countries like Ghana and Nigeria charcoal business is a major foreign exchange earner for local businessmen.

Apart from processing charcoal for local and international consumption there are other business opportunities. An entrepreneur could leverage on selling charcoal powered appliances such as cookers or stoves.

You can decide to focus your effort on distribution of the product and direct sales to companies and private individuals.

How to Start a Charcoal Production Business

Learn the Trade

Before starting the business you need to learn the trade. You should learn the best wood for charcoal, how to burn the wood and packaging.

Other things are sourcing the raw material, getting international buyers and packaging. International consumers have strict guidelines to the size, cut and type of charcoal.

You can learn the trade through practical experience or seminars. Visit charcoal manufacturing companies to improve your knowledge. Read books and use online resources to gather information on the business.

Equipment

The most important equipment is the fire chamber. A fire chamber with heat regulators is the best equipment to make charcoal.

The size, functionality and effectiveness of the chamber dictate the grade of charcoal you produce. Invest in good equipment to meet recognized standards of charcoal.

Sourcing the Wood

They type of wood determines the type of charcoal you produce. Secure contracts directly from licensed suppliers for your raw materials. Processing the wood involves burning at high temperature, cooling then packaging.

Storage Facility

Charcoal is bulky and difficult to transport and store. You need a dry storage area that is aerated and conducive for charcoal storage. The storage facility should have serious fire safety protocols and equipment to prevent fire.

Marketing Charcoal

Apart from exporting the charcoal to foreign countries there are many local consumers. Sell your charcoal to bakeries, local food vendors and private individuals.

In West Africa cooks prefer charcoal to make food for parties and are a good market for your product. Sell to caterers and event planners in your immediate community.

To export charcoal you need an export license and inspection certification. List your charcoal products on online classified websites for further reach. You can build a website to attract international patronage and orders.

It is important to register the charcoal business as a limited liability company. fund the enterprise through target saving or borrow from friends and family.