What Is the Production Cost Per Kilogram of Biscuits?

If you are planning to establish a biscuit factory or expand your production line, one of the most important questions for every investor and manufacturer is: What is the production cost per kilogram of biscuits? The answer depends on several factors, including the cost of raw materials, the type of machinery, production capacity, energy consumption, labor costs, packaging type, and production waste.

In this article, we will comprehensively examine all the factors affecting the production cost per kilogram of biscuits and explain how selecting the right equipment and designing an efficient production line can reduce costs and increase profitability.

How Is the Production Cost Per Kilogram of Biscuits Calculated?

The production cost per kilogram of biscuits consists of both direct and indirect costs. The main cost components include:

• Raw material costs
• Energy costs
• Labor costs
• Machinery depreciation
• Maintenance and repair costs
• Packaging costs
• Quality control costs
• Internal factory transportation costs
• Production waste costs

The general formula is:

Total Production Cost ÷ Total Production Volume = Production Cost Per Kilogram of Biscuits

For this reason, two factories producing similar products may have completely different production costs.

The Most Important Factors Affecting the Production Cost Per Kilogram of Biscuits

Below are the main costs involved in a biscuit production line.

Raw Material Costs: The Largest Share of Production Cost

Raw materials typically account for 60% to 75% of total production costs. The main raw materials include:

• Flour
• Sugar
• Oil
• Milk powder
• Eggs
• Salt
• Flavorings
• Food flavors
• Baking powder
• Emulsifiers
• Preservatives

Fluctuations in the prices of these materials directly affect production costs. Therefore, many factories purchase raw materials in bulk.

Flour Cost in Biscuit Production

Flour is the primary raw material. In many factories, flour accounts for approximately 40% to 50% of the final product weight. Flour quality affects:

• Product quality
• Waste rate
• Baking time
• Energy consumption
• Production line efficiency

Oil and Sugar Costs in Biscuit Production

After flour, oil and sugar represent the highest expenses. Price increases for these two ingredients usually have the greatest impact on the final production cost. Therefore, formulation management is extremely important.

Energy Costs in Biscuit Production Lines

Energy consumption is another major production expense. In biscuit factories, energy is consumed by:

• Tunnel oven
• Mixer
• Air compressor
• Packaging machine
• Cooling system
• Ventilation system
• Factory lighting

In many production lines, the tunnel oven is the largest energy consumer.

What Factors Increase Energy Consumption?

The following factors increase energy costs:

• Poor oven insulation
• Outdated tunnel oven design
• Non-standard burner
• Incorrect oven temperature settings
• Frequent production interruptions
• Heat leakage
• Lack of regular maintenance

Using modern equipment can significantly reduce energy consumption.

Labor Costs in Biscuit Factories

The number of operators depends on the automation level of the production line. Older production lines generally require more workers, while fully automated lines perform many operations automatically. This reduces:

• Salaries
• Insurance costs
• Human error
• Waste
• Production downtime

The Role of Machinery in Reducing Production Costs

One of the most important ways to reduce production costs is by using high-quality machinery. A professional production line helps to:

• Reduce energy consumption
• Increase production speed
• Minimize waste
• Maintain consistent product quality
• Reduce production downtime

For this reason, selecting a reliable machinery manufacturer is very important.

How Equipment Depreciation Affects Production Costs

All industrial machinery experiences depreciation. The following equipment should be included in cost calculations:

• Tunnel oven
• Mixer
• Molding machine
• Packaging machine
• Conveyor belt
• Cooling system

The higher the equipment quality, the lower the depreciation cost.

Production Line Maintenance and Repair Costs

Regular equipment maintenance helps prevent increased costs. Major maintenance expenses include:

• Bearing replacement
• Gearbox servicing
• Burner repair
• Belt replacement
• Motor repair
• Electrical control panel servicing
• Sensor calibration

Preventive maintenance is generally much less expensive than emergency repairs.

Biscuit Packaging Costs

Packaging is an important part of production costs. These expenses include:

• Wrapping film
• Cartons
• Boxes
• Printing
• Labels
• Shrink wrapping
• Pallets

The type of packaging can account for a significant portion of the final product cost.

Waste Costs in Biscuit Production

Production waste is one of the hidden costs in a factory.

Common causes of waste include:

• Improper oven settings
• Low-quality molds
• Incorrect dough moisture
• Broken biscuits
• Packaging machine malfunction
• Poor-quality raw materials

Reducing waste is one of the fastest ways to increase factory profitability.

How Does Production Capacity Affect the Cost Per Kilogram of Biscuits?

The higher the production capacity, the more fixed costs are distributed across a larger production volume. As a result, large factories generally have lower production costs than smaller facilities.

Examples of fixed costs include:

• Rent
• Management salaries
• Insurance
• Taxes
• Building depreciation
• Administrative expenses

How to Reduce the Production Cost Per Kilogram of Biscuits

Effective strategies include:

Using Energy-Efficient Tunnel Ovens

Modern ovens consume less fuel.

Automating the Production Line

Reducing labor costs while increasing efficiency.

Purchasing Raw Materials in Bulk

Lower purchasing costs.

Reducing Production Waste

Proper machine adjustment and quality control.

Regular Equipment Maintenance

Preventing costly breakdowns.

Using Standard, High-Quality Machinery

Increasing equipment lifespan while reducing maintenance costs.

Does Tunnel Oven Fuel Type Affect Production Costs?

Yes. Fuel type is one of the key factors affecting production costs. Common fuels include:

• Natural gas
• Diesel
• LPG

In many factories in Iran, natural gas is the most economical option due to its lower cost and wider availability. In addition, optimized burner design and proper tunnel oven insulation can significantly reduce fuel consumption.

The Role of Automation in Reducing Biscuit Production Costs

Today, many production lines use PLC systems and intelligent process controls. The benefits of automation include:

• Reduced errors
• Improved product quality
• Reduced production downtime
• Precise temperature control
• Lower energy consumption
• Reduced labor costs

Are Low-Cost Machines Always the Best Choice?

No. Purchasing inexpensive machinery may increase:

• Energy consumption
• Equipment failures
• Production downtime
• Repair costs
• Production waste
• Poor product quality

As a result, the overall production cost may actually increase.

Why Is Choosing the Right Machinery Manufacturer Important?

High-quality machinery can operate for many years with minimal operating costs. When selecting a manufacturer, consider:

• Experience in biscuit production line manufacturing
• Component quality
• After-sales service
• Operator training
• Spare parts availability
• Production line customization
• Technical support

Etehad Noavaran; Your Partner in Biscuit Manufacturing

If you are looking to reduce production costs, improve efficiency, and establish a modern production line, Etehad Noavaran designs and manufactures biscuit, cracker, and other flour-based product production lines tailored to the needs of each factory. At etehadnoavaran.com, you can explore a wide range of equipment, including tunnel ovens, mixing systems, forming machines, and packaging equipment, while benefiting from professional consultation to select the most suitable machinery. Choosing the right equipment is a long-term investment that can reduce the production cost per kilogram of biscuits while improving overall production line efficiency.

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Etehad Noavaran’s Final Words

The production cost per kilogram of biscuits cannot be defined by a single fixed number. It is influenced by numerous factors, including raw material prices, energy consumption, machinery quality, production capacity, labor, packaging, and production waste. Proper management of these factors and the use of high-quality equipment play a vital role in reducing production costs and increasing factory profitability. Investing in modern machinery, optimizing energy consumption, and implementing preventive maintenance programs are among the most effective strategies for improving the competitiveness of biscuit manufacturers.

Frequently Asked Questions

How is the production cost per kilogram of biscuits calculated?

It is calculated by dividing the total direct and indirect production costs by the total amount of biscuits produced during a specific period.

Which factor accounts for the largest share of production costs?

Raw materials such as flour, sugar, and oil usually account for the largest share of the final production cost.

Does the tunnel oven affect production costs?

Yes. The tunnel oven is one of the most energy-intensive pieces of equipment in the production line, and a well-designed oven can significantly reduce energy consumption and production costs.

How can biscuit production costs be reduced?

By using modern machinery, minimizing production waste, optimizing energy consumption, purchasing raw materials in bulk, and performing regular equipment maintenance.

Does higher production capacity reduce the cost per kilogram of biscuits?

Yes. As production capacity increases, fixed costs are spread across a larger production volume, reducing the production cost per kilogram.