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How to calculate baler cost

How much does a baler really cost?

By Jesper Hultqvist

Learn how to calculate the life cycle cost of any baler

Buy the right baler, and you can save so much money that the machine will be “free of charge!” Don’t believe me? Continue reading, and I will calculate the operating costs for six balers and show you where the real costs (and savings) in operating a baler lie.

A baler is a big investment. Unfortunately, it’s way too easy to fixate on the purchase price when comparing offers for different balers. A quality baler should last for many years. To know what the machine actually costs your company, you need to look at more factors than just the purchase price; energy consumption and consumables are the two most important.

To get an overview of the costs, we need to calculate the life cycle cost of the balers. Only when we have done that can we really compare the offered machines and see which one will be the cheapest for our company. We will calculate the cost for three different scenarios and six different channel balers. The idea is to clearly describe how we calculate the different parts of the life cycle cost so you can easily make your own calculations. We estimate the life expectancy of the machines to be 15 years (even though a well maintained baler can operate much longer than that).

The life of the baler in three parts

There are different ways to calculate life cycle costs (also called whole life costs). In this post, we have chosen to divide the life of a baler into three phases:

Acquisition

This includes choosing which baler to buy and the transport, installation and commissioning of the baler.

Operation

Here we find all the major costs such as electricity, personnel, service, and consumables.

Divestment

It also costs money to retire the machine. It must be dismantled, transported away, and perhaps scrapped. But it could also be sold on the second-hand market.

Acquisition

The acquisition part involves several costs that we may summarize as “start-up costs.” This is simply the cost of getting started with the machine. These include:

  • Choosing a baler: cost to specify needs, meeting with the seller, review of tenders. This takes time and may require travel to look at reference facilities.
  • Purchase price
  • Transport to your facility
  • Installation
  • Training
  • Commissioning

The only cost in this list that can really affect the life cycle cost is the purchase price. In practice, the other “start-up costs” are too small to make any difference when calculating the cost of a machine’s entire life from the cradle to the grave.

Although it does not directly affect our calculations, it is important to know your needs when specifying the requirements of the new baler (or any other piece of recycling equipment for that matter). For example, if you buy a baler that is too small, you will soon need to buy another baler. In that case, it is cheaper to buy a bigger one from the start. But it is also foolish to buy a baler that’s too big and pay for capacity you don’t use.

Also, keep in mind that the choice of baler can affect the other parts of the system. The capacity of the whole process (system capacity) must be such that no bottlenecks arise. This affects the dimensioning of:

  • Conveyor belts
  • Conveyor feeding machine (e.g., front loader)
  • Machine for moving the bales (e.g., fork lift)
  • Staff to feed the belt, move bales and (if necessary) take care of the baler

Also, don’t forget: Does one baler require the room to be rebuilt (walls moved, etc.) while another baler can fit without remodeling?

Operation

Operation is the longest and most expensive phase of a baler’s life. It includes costs for:

  • Power consumption
  • Staff
  • Service
  • Repairs
  • Wear parts
  • Consumables
  • Financial costs

Three examples

To calculate the life cycle costs for different balers, we use three fictional companies (called “Small,” “Medium,” and “Large”) with different requirements. Requirements and conditions are specified as follows:

Volume per year – the amount of material that the company must bale per year.

Types of material – types of material (OCC, newsprint, soft plastic, etc.) and density before compaction.

Operating conditions – how the baler will be operated:

  • Number of staff shifts
  • Number of operating days per week
  • Number of operating days per year
  • Operational machine time per day (Actual number of hours the baler is in operation)

Capacity requirement – amount of material that needs to be baled per hour to handle the amount of material to be baled per year: Volume per year/operational machine time per year=capacity requirement per hour.

For each company, we calculate the costs for two different types of balers that suit the company’s requirements and compare the results. We estimate a “lifetime” as 15 years. However, it is quite common for well-maintained balers of good production quality to have a longer lifespan than 15 years.

Small company

Volume per year: 15 000 ton 
Types of material: OCC and other materials with a density of 50 kg/m³ before compaction. 

Operating conditions:   

  • 1 shift/day (8 hrs total)
  • 5 days/week
  • 220 days/year 
  • Operational machine time per day: 6,5 hrs 
  • Total number of operating hours 15 yrs: 21 450 

Capacity requirement: 10,5 ton/hr

Baler 1

Presona LP 60 VH1 – a prepress baler with a 37 kW motor

Purchase price: €165 000 

Baler 2

Shear baler with 75 kW motor 

Purchase price: €140 000 

Medium company

Volume per year: 40 000 ton 
Types of material: Various types of plastic with a density of 30 kg/m³ before compaction.

Operating conditions: 

  • 2 shift/day (16 hrs total) 
  • 6 days/week
  • 270 days/year
  • Operational machine time per day: 13 hrs
  • Total number of operating hours 15 yrs: 52 650 

Capacity requirement: 11,4 ton/hr

Baler 1

Presona LP 85 VH2 with cross strapping – a prepress baler with a motor capacity of 90 kW (2×45)  

Purchase price: €250 000 

Baler 2

Shear baler with motor capacity :165 kW (3×55) 

Purchase price: €212 500 

Large company

Volume per year: 200 000 ton 
Types of material: Various types of paper (OCC, newspaper etc.) with a density of 50 kg/m³ before compaction.

Operating conditions: 

  • 3 shift/day (24 hrs total) 
  • 6 days/week 
  • 270 days/year 
  • Operational machine time per day: 20 hrs
  • Total number of operating hours 15 yrs: 81 000 

Capacity requirement: 37 ton/hr

Baler 1

Presona MP 270 MH “MEGA” – a baler with precompression and a motor capacity of 240 kW (2×75 + 2×45) 

Purchase price: €485 000 

Baler 2

Shear baler with motor capacity: 300 kW (4×75) 

Purchase price: €485 000 

The balers were selected based on actual* capacity per hour. Since a shear baler needs extra power to operate the shear, the motor is bigger on a shear baler than on a pre-press baler with the same baling capacity.  

*Actual capacity is based on our experiences with real material in the baler.

The prices are based on Presona’s** prices for our balers. The prices of the shear balers are set 15 percent lower because it is our experience that a good quality shear baler costs on average 15 percent less to purchase than a baler with a pre-press.

**Every time before a price is set, several factors are considered. Prices can, among other things, be affected by temporary changes in the price of materials. The prices in this text are approximate and are used as examples to describe how to calculate the actual costs of owning and operating a baler.

Power consumption

Balers are large machines, and regardless of manufacturer and model, a lot of energy will be used. But the differences in electricity costs between two balers with similar capacity can be surprising!

Small – energy cost 15 years

BalerOperating hours 15 yrsMotor sizeTotal kWh 15 årCost Germany
(€0.1818/kWh)
Cost USA
($0,0693/kWh)
Presona LP 60 VH12145037 kW793 650€144 286$55 000
Shear baler 75 kW2145075 kW1 608 750€292 471$111 486
Money saved:€148 185$56 486

The tables show the difference in electricity consumption over 15 years and two examples of actual electricity costs. Electricity prices are prices for non-household / industry for Germany (high electricity price) and the USA (low electricity price) and include “non-recoverable” taxes.

Medium – energy cost 15 years

BalerOperating hours 15 yrsMotor sizeTotal kWh 15 årCost Germany
(€0,1818/kWh)
Cost USA
($0,0693/kWh)
Presona LP 85 VH2K52 65090 kW4 738 500€861 459$328 378
Shear baler 165 kW52 650165 kW8 687 250€1 579 342$602 026
Money saved:€717 883$273 648

Large – energy cost 15 years

BalerOperating hours 15 yrsMotor sizeTotal kWh 15 yrsCost Germany
(€0.1818/kWh)
Cost USA
($0,0693/kWh)
Presona MP 270 MH81 000240 kW19 440 000€3 534 192$1 347 192
Shear baler 300 kW81 000300 kW24 300 000€4 417 740$1 683 990
Money saved:€883 548$336 798

Electricity prices Germany

Prices from the second half of 2020.

https://ec.europa.eu/eurostat/statistics-explained/index.php/Electricity_price_statistics#Electricity_prices_for_non-household_consumers

The German prices include “non-recoverable taxes”.

Electricity prices USA

Prices from June 2020.

https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a

The US-prices include taxes.

Calculations of electricity costs

For the sake of simplicity, we have calculated the electricity costs as if the machines were used to their full capacity.

Conclusion – engine size is important

It is easy to forget how the motor size affects the operating costs of a machine like this. Large motors in combination with high electricity prices can be a costly affair. Both pre-press balers and shear balers can be equipped with frequency converters to reduce their energy consumption.

If we calculate the cost for 15 years, it is clear that you can save a lot of money by choosing an energy-efficient baler. In our examples, you can see that even with a low electricity price, you can almost buy a brand new baler with the money you save. If you have a high electricity price, you can buy one or more new balers with the money you save on lower electricity consumption!

Consumables (wire)

Wire to hold the bales together is a large and costly consumable for balers. Each bale requires several meters of wire. A baler with an efficient tying mechanism can use two meters less wire per bale, which means great cost savings over 15 years!

Below we calculate the total wire cost for our three companies.

First, we need to calculate the amount of wire used per bale. The difference in how much wire different balers use is really about how much wire is left after the twist. We call this leftover part the “pigtail,” as shown in the photo. The pigtails serve no purpose. They are just a waste of money.

There is money to be saved here! You will find the details on how to calculate the wire consumption beneath the photo.

Pigtails – important for baler cost.

We divide the calculation into three parts for the sake of clarity:

  • Wire around the bale
  • Wire for tying
  • Wire for pigtails (leftover wire)

Wire around the bale

Bale height + length × 2 × 5 (number of wires around the bale)

Wire for tying

The number of wire ends (two per tie) × number of ties × 150 mm wire

Wire for pigtails

Number of wire ends (two per tie) × number of ties × pigtail length mm

An effective tying mechanism has a pigtail length of 50 mm. However, a regular tying mechanism uses about 150 mm of wire per pigtail.

At company Small, the bales are 750 × 1200mm, which gives us a total wire length around the bale (all five wires) of 19500 mm or 19.5 meters. The wire for the ties is 2 × 10 ×  150 = 3000 mm or three meters.

An efficient tying mechanism (in our example Presona LP 60) makes a pigtail of 50 mm × 2 × 10 = 1000 mm or one meter of wire.

A normal tying mechanism (in our example, a shear baler 75 kW) makes a pigtail of 150 mm × 2 × 10 = 3000 mm or three meters of wire.

Small – wire usage per bale

 Presona LP 60 VH1Shear baler 75 kW
Bale size (h×w×l)750×1100×1200 mm750×1100×1200 mm
Wire around the bale19 500 mm19 500 mm
Wire for tying3 000 mm3 000 mm
Wire for pigtails1 000 mm3 000 mm
Total wirelength/bale23 500 mm (23.5 m)25 500 mm (25.5 m)
Difference-2 000 mm (-2 m)

Thus, the difference is two meters or just over eight percent more wire per bale for the shear baler in the example. That doesn’t sound like much, but what does it mean in costs over 15 years? 

Assuming each bale weighs 500 kg, the Small company will produce 30,000 bales (15,000,000 / 500) per year and 450,000 (15 × 30,000) bales over 15 years. The wire price is calculated at €0.05/m, which means that you can save €45,000 by choosing a baler that saves on wire, see the table below.

Small – wire cost 15 years

 Presona LP 60 VH1Shear baler 75 kW
Number of bales 15 yrs450 000450 000
Meters of wire 15 yrs10 575 00011 475 000
Wire cost 15 yrs€528 750€573 750
Money saved€45 000

Medium company

The bales in the Medium company are as large as in the Small company, but here cross strapping is also used to hold together the plastic that has been compressed. That adds three wires. Since the cross strapping is done from the side, the wire length will be (750 + 1100) × 2 × 3 = 11100 mm. The wire for the ties will be 150 × 2  × 6 = 1800 mm, a total of 12900 mm or 12.9 meters for the cross strapping. In the table below, I have summarized all wire usage.

Medium – wire usage per bale

 Presona LP 85 VH2KShear baler 165 kW
Bale size (h×w×l)750×1100×1200 mm750×1100×1200 mm
Wire around the bale30 600 mm (19 500 +11 100)30 600 mm (19 500 +11 100)
Wire for tying4 800 mm (3000 + 1800)4 800 mm (3000 + 1800)
Wire for pigtails1 600 mm (1000+600)4 800 mm (3000+1800)
Total wirelength/bale37 000 mm (37 m)40 200 mm (40.2 m)
Difference-3200 mm (-3.2 m)

So here, the difference is 3.2 meters of wire per bale. The Medium company’s bales weigh an average of 500 kg, which means that it produces 80,000 bales per year and 1.2 million bales in 15 years.

Medium – wire cost 15 years

 Presona LP 85 VH2KShear baler 165 kW
Number of bales 15 yrs1 200 0001 200 000
Meters of wire 15 yrs44 400 00048 240 000
Wire cost 15 yrs€2 220 000€2 412 000
Money saved€192 000

Choosing a baler with an efficient tying mechanism saves you €192,000 (almost the price of a completely new baler) in 15 years!

Large company

In the Large company, the bales are larger than in previous examples: 1100 (h) × 1200 (l) mm, which gives us a wire length of 23,000 mm + knot wire of 3000 mm, a total of 26,000 mm excluding pigtails.

Large – wire usage per bale

 Presona MP 270 MHShear baler 300 kW
Bale size (h×w×l)1100×1100×1200 mm1100×1100×1200 mm
Wire around the bale23 000 mm23 000 mm
Wire for tying3000 mm3000 mm
Wire for pigtails1000 mm3000 mm
Total wirelength/bale27 000 mm (27 m)29 000 mm (29 m)
Difference-2000 mm (-2 m)

Here, the bales weigh an average of 900 kg, which means that the large company produces 222,222 bales (200,000,000/900) per year and 3,333,300 bales (15 × 222,222) over a 15-year period.

Large – wire cost 15 years

 Presona MP 270 MHShear baler 300 kW
Number of bales 15 yrs3 333 3303 333 330
Meters of wire 15 yrs89 999 91096 666 570
Wire cost 15 yrs€4 499 996€4 833 328
Money saved€333 332

In this example, €333,332 can be saved during the lifetime of the machine.

Expenditure that does not affect the evaluation (very much)

Staff

The cost of personnel is usually the largest single expense of operating a baler. People are needed to fill the conveyor belt with material, remove finished bales and handle and maintain the machine. However, when we calculate the life cycle cost to compare balers, the cost of personnel is not that important.  The amount of material to be loaded onto the conveyor belt is the same regardless of which baler is used. In these examples, we assume that the balers have approximately the same level of automation. All in all, this means that the amount of personnel and thus the personnel cost is generally the same regardless of the machine.

Note that this does not apply if you compare the cost between buying, for example, two smaller balers or a larger one. Each baler needs its own staff, conveyor belts, front loaders, and so on. Personnel costs are always lower if you choose one larger baler instead of multiple smaller ones.

Maintenance

Regular maintenance is vital to avoid unplanned outages and give the baler a long life. The machines in our examples have similar service needs. For that reason, we decided not to include this cost in our evaluation. However, a general tip is to make sure that you have a service partner who is geographically close to your facility. That way, the service partner can remedy urgent problems quickly, and there will be fewer travel hours to be paid.

Repairs

It is difficult to calculate the cost of unexpected repairs precisely because they are unexpected. The best way to avoid them is to buy good quality balers and follow the service recommendations. Therefore, we do not include repair costs in our calculations when we evaluate balers.

Wear parts

Wear parts are things on a baler that are expected to wear and should be replaced at regular intervals. These are, for example, blocks under a press carriage or the shear on a shear baler. The cost over 15 years is relatively small, so we omit it from our calculations when evaluating balers.

Financial costs

Cost of capital employed must, of course, also be included in the analysis. However, we omit them here when we evaluate balers because the purchase prices, and thus the capital costs, do not differ much.

Divestment

Once the machine has done its job in your company, it’s time for divestment. Maybe the baler has a value in the used market and can be sold, or maybe it’s time to sell it for scrap.

Costs associated with divestment are:

  • Dismantling
  • Transport of the baler from your facility
  • Costs of sale (warehousing, possible brokerage fee, etc.)
  • Cost of scrapping

Summary – save this much on baler costs!

It’s time to sum it all up! By buying a baler that has low operating costs, you can save a lot of money. As you will see in the tables below, you can buy one or more new balers for the money you save.

Here we present the life cycle cost (purchase price, energy cost, wire cost) for the three example companies. (As we said before, there are other costs, but since they are quite similar no matter which machine you choose, we haven’t taken them into account.)

Small – baler life cycle cost

 LP 60Shear baler 75 kW
Purchase price€165 000€140 000
Energy cost (Germany)€144 286€292 471
Wire cost€528 750€573 750
Total cost 15 yrs€838 036€1 006 221
You save:€168 185

Medium – baler life cycle cost

 LP 85 VH2KShear baler 165 kW
Purchase price€250 000€212 500
Energy cost (Germany)€861 459€1 579 342
Wire cost€2 220 000€2 412 000
Total cost 15 yrs€3 331 459€4 170 830
You save:€872 383

Large – baler life cycle cost

 MP 270 MHShear baler 300 kW
Purchase price€485 000€485 000
Energy cost (Germany)€3 534 192€4 417 740
Wire cost€4 499 996€4 833 328
Total cost 15 yrs€8 519 188€9 736 068
You save:€1 216 880

The numbers speak for themselves! Do not stare blindly at the purchase price! Instead, calculate what operating costs will be throughout the life of the machine. It pays off. I promise, no matter what balers you compare!

Try our calculator!

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Click here to start comparing balers!

Jesper Hultqvist
Marketing guy at Presona. Likes to create customer value through information and digital services. Dog owner and fly fisherman.
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