As a Useful Tool in Small Oil
Palm Developments
MiniSmartTM mini palm oil mill is most useful for small-scale oil palm developments located in
isolated regions that are more than 100km from the nearest operating palm oil
mill and where very bad public road infrastructures are resulting in extremely
high FFB transport-to-mill costs.
In recent years, many
small farmers in developing countries in South East Asia and West Africa have
switched to oil palm planting on their small plots of agricultural land (where
they used to practice subsistence farming), through government aid or subsidy
schemes. Many of these new plantings have
ended up as isolated pockets (a couple of thousand hectares) of oil palm
plantings without the service of a nearby palm oil mill to process their crops.
These small farmers would
suffer big economic losses in terms of exorbitant transport-to-mill costs and
unfavorable selling prices offered at the mercy of far-a-way palm oil mills built
by large private corporations mainly to process their own FFB crops. It is in these situations that a
MiniSmartTM mini palm oil mill built near their lands will be a big boon to these
small farmers and a great stimulator to the local economy.
MiniSmartTM mini palm oil mill could process up to 5,000mt of FFB/month or 60,000mt FFB/ year. This would cover for about 3,000 hectares of
small-farmer oil palm plantings which are producing on average 1.5-1.7mt FFB per hectare
per month.
The investment in a MiniSmartTM mini palm oil mill should be done by the private sector or
government-private joint ventures. The
local and central governments could play an active role in enticing both local
and foreign investors with generous tax and other investment incentives to
invest in MiniSmartTM mini palm oil mill for the small oil
palm farmers.
As a "Stop-Gap" Mill in Big
Oil Palm Developments
In
the past decade, many
foreign investment groups have invested in scores of large oil palm
plantations
above 10,000 hectares in tropical countries with abundant lands suitable
for oil palm cultivation such as Indonesia, West Africa, Papua New
Guinea, Cambodia and Myanmar.
As most of these investments involved green fields, so it would take more
than 5 years to complete their planting programs.
Crop production of a 10,000-hectare
new plantation may start with 5,000 to 10,000mt FFB in the first year harvesting
and will steadily rise to the 50,000mt FFB/year level over the next 3 to 4
years. Full-maturity crop production of
200,000mt FFB/year may come in another 5-6 years’ time. This rather long climb to full crop production
level often poses a dilemma to the management in the planning of FFB milling or
processing capacity.
A crop production of
200,000mt FFB/year will require a palm oil mill of 45mt/hour milling capacity. The tricky question is when should this mill
be built and come on line. If, for
example, there is a neighboring palm oil mill with extra capacity of 50,000mt
FFB/year to spare, then the obvious answer for the management would be to put up
a 45mt/hour mill nearer to the time when its own FFB crop production is
expected to rise to above the 50,000mt/year level.
If there is no nearby
mill, then the management will have to build a mill much earlier. A cash-rich group may decide to build a
45mt/hour mill to process its first year’s crop. A more cash-conscious group may decide to
build a 30mt/hour mill (the smallest among the normal-size mill) first and plan
to expand it later.
The end results of both
scenarios will be surplus milling capacity for the next 5-7 years. If there are no outsider FFB crops around,
then the 30mt/hour or 45mt/hour mill will end up operating only one 8-hours shift
a day, 1 to 3 days in a week for the first 3-4 years. This
is undeniably very unproductive in operation as well as capital management.
The handy solution to this
dilemma is to opt for MiniSmartTM mini palm oil mill as a so-called “stop-gap”
mill which can process FFB crop up to 60,000mt/year. This would help the management to buy time
and put the “saved” capital into something more productive during the 3-4 years
period.
The management can have
the option of adding a 30mt/hour mill later to be run alongside the 10mt/hour MiniSmartTM mini mill, or build a 45mt/hour mill and dispose the MiniSmartTM mini palm oil mill to another new
plantation owner with relative ease.
For further enquiries, please contact:
CIMG Resources Sdn Bhd
Malaysia
Email: cimgrs@yahoo.com
