I. Labor Costs (Reducing workforce through automation)

1. Upgrade to fully automated production lines

Implement automatic feeding, air cooling, screening, and weighing/packaging; reduce staffing from 3 to 1–2 operators per small-scale line, cutting labor costs per ton by half.

2. Multi-skilled roles and staff streamlining

Workers handle inspection, packaging, and minor maintenance concurrently; avoid adding dedicated management personnel.

3. Retain long-term workers

Reduce high staff turnover to prevent equipment jams, waste, and damage caused by improper operation by inexperienced workers.

II. Refined control of packaging, site, and miscellaneous costs

1. Bulk purchasing of packaging bags

Purchase woven bags with inner liners by the ton and negotiate lower unit prices to save 3–5 RMB per ton on packaging costs.

2. Facility optimization

Prioritize using self-owned idle factory buildings or rural sites to eliminate high rental costs; install simple rain shelters over open-air material yards for low-cost storage solutions.

3. Centralized procurement of consumables

Purchase engine oil, seals, bearings, and hammer blades in bulk to secure wholesale pricing.

4. Control storage losses

Store finished pellets in sealed stacks to prevent moisture absorption, pulverization, and spoilage, thereby reducing product loss.

III. Hidden cost control (Often overlooked, but costs add up)

1. Ensure high operating rates

Intermittent production spreads depreciation, labor, and electricity costs across a smaller output, significantly raising unit costs; stable orders and full-capacity production are key to long-term cost reduction.

2. Energy-efficient operation of environmental equipment

Use variable frequency drives (VFDs) to adjust dust extraction fans based on demand, avoiding the need for full-power operation around the clock.

3. Reduce production waste

Strictly control raw material moisture and ring die temperature to prevent poor pellet formation and excessive fines; recycle fines back into the machine for re-pelletizing instead of discarding them.

4. Waste material recycling

Recycle all dust and broken pellets generated during production back into the extrusion process to avoid wasting raw materials.