§1What this business is
Clean waste wood — offcuts, pallets, construction and furniture waste — is separated from soil, stone and metal, shredded and ground into chips, and part of it is pressed into products in a compression moulding machine. Chips go to particle-board and chipboard makers, paper pulp, animal bedding, mulch, compost and biomass fuel.
Capacity: 8,000 kg a day = 24,00,000 kg a year.
§2Is it right for you?
Who it is for
Someone near furniture clusters, saw mills or packaging yards with a steady waste-wood supply.
Who it is not for
Someone without a reliable waste-wood source or a board or fuel buyer.
Advantages
- Cheap raw material (₹2.5–5 per kg)
- Many buyers: board makers, fuel users, nurseries
- Keeps wood out of landfills and saves trees
Drawbacks
- Collecting enough clean waste wood is hard work
- Machinery cost is high (₹30.00 L)
- Painted or treated wood must be kept out
Skills you need
- Waste collection logistics
- Shredder and grinder upkeep
- Selling to board and fuel buyers
Why difficulty 3/5: Machines are costly and the waste supply must be organised.
§3Market
Who buys
- Particle-board and chipboard makers
- Paper and pulp mills
- Boilers using biomass fuel
- Nurseries, dairies and poultry farms (mulch, bedding)
How it sells
- Direct supply contracts with mills and boilers
- Local traders
Good to know
- The report names construction waste, industrial waste, pallets, old furniture and tree trimmings as sources.
- Rising plywood and panel demand is pushing demand for recycled wood, the report says.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Waste separator | 1 | — |
| Shredder | 1 | — |
| Conveyor belt | 1 | — |
| Grinder | 1 | — |
| Hopper | 1 | — |
| Compression moulding machine | 1 | — |
| All machinery together, incl. other equipment and hand tools | 1 lot | ₹30,00,000 (approx.) |
From: PMEGP sample project report — Wood Recycling (prepared by Udyami/Samadhan)
- Waste wood: small blocks, chips, sawdust₹2.5–5 per kg
- Adhesives and nailsconsumables
From: PMEGP sample project report — Wood Recycling (prepared by Udyami/Samadhan)
§5Licences & registration
- Udyam registration
- GST registration
- State Pollution Control Board consent to establish and operate, where the state requires it
- Factory licence if your worker count crosses the Factories Act limit
- Trademark for your brand name (optional)
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- CGTMSECentralActiveNo collateral, up to ₹10 crore
- Stand-Up IndiaCentralClosed₹10 lakh – ₹1 crore loan
PMEGP fits (₹38.67 L, under the ₹50 L manufacturing limit); CGTMSE for a loan without collateral; Stand-Up India for SC/ST and women founders. The ₹28.80 L term loan is above the MUDRA limit.
§7Money
How the investment is worked out: Plant & machinery ₹30.00 L + furniture & fixtures ₹2.00 L + working capital ₹6.67 L = ₹38.67 L. Land own or rented.
Working capital: Working capital ₹6.67 L, of which bank finance ₹6.00 L. Waste wood costs ₹2.5–5 per kg.
Year not printed on the report — check current machinery prices.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: FIEO (Federation of Indian Export Organisations)
- Confirm the 8-digit ITC(HS) line with DGFT or your customs broker before shipping.
- You need an Import Export Code (IEC) from DGFT before the first shipment.
§9Risks — where people fail
- Waste supply drying up
- Fire in stored chips and sawdust
- Metal in waste damaging blades
§1030 / 60 / 90-day plan
A general plan that applies to any business. A plan for this business will be added after research.
- Days 1–30: Visit a working wood recycling unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (Udyam registration, GST registration), a project report (DPR), and the scheme or loan file.
- Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.
§11Who to connect with
Associations, clusters and training institutes — the directory is being built. Connect
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Wood Recycling?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.