You are on page 1of 10

Palm Oil Production Chain

The Palm Oil (Elaeis guineensis) produces 2 types of oils: Palm oil from the fibrous mesocarp (flesh) Lauric oil from the palm kernel

After harvesting the fresh fruit bunch FFB must be processed as soon as possible to prevent a rapid built – up of a fatty acids that could adversely affect the quality of the oil. In the conventional milling process, the bunches are sterilized and stripped of the fruitlets, which then are digested and pressed to extract the crude palm oil (CPO). The oil palm nuts are separated from the fibres in the press cake and cracked to obtain palm kernels. These are then crushed in another plant to obtain crude palm kernel oil (CPKO) and a by-product, palm kernel cake (PKC), which is used as animal feed. Physical splitting or ‘fractionation’ of CPO and CPKO in the refinery produces the liquid olein fraction and solid stearin component. Palm oil and palm kernel oil have a wide range of applications. About 80 percent is used for food applications while the rest is feedstock for a number of non-food applications. Among the food uses, refi ned, bleached and deodorized (RBD) olein is used mainly for cooking and frying oils, shortening and margarine while RBD stearin is used for the production of shortening and margarine. RBD palm oil (i.e. unfractionated palm oil) is used for producing margarine, shortening, vegetable ghee, frying fats and ice cream. Several blends have been developed to produce solid fats with a zero content of trans-fatty acids. In the production of ice cream, milk fats are replaced by a combination of palm oil and palm kernel oil. A blend of palm oil, palm kernel oil and other fats replaces milk fat for the production of non-dairy creamers or whiteners. Palm oil and palm kernel oil are also ingredients for the production of specialty fats, which include cocoa butter equivalents (CBE) and cocoa butter substitutes (CBS) and general purpose coating fats. CBE and CBS have physical properties that are similar to cocoa butter and are widely used for production of chocolate confectionery. Non-food uses of palm oil and palm kernel oil are produced either directly or through the oleochemical route, which produces various types of chemical ingredients for the soap, detergent and cosmetic industries. Some of these chemicals are also used in the chemical industry for plasticizers, coatings, etc. A recent trend is the usage of by-products of the oleochemical industry as well as crude palm oil as energy sources for electricity plants and increasingly as biofuel and biodiesel. Bioenergy companies are playing an increasingly significant role in the palm oil sector.

55-60% of oil palm expansion in Malaysia and Indonesia occurred at the expense of forests. Malaysia and other Asian countries. with deforestation causing around 20 per cent of all human induced greenhouse gas (GHG) emissions. The primary processing of palm oil in CPO mills presents a separate set of issues. Worldwide demand for palm oil is expected to double by 2020 and new plantations are being developed or existing ones expanded in Indonesia. Indiscriminate use of fertilizers and insecticides by some producers is polluting surface and groundwater sources. Burning can also have negative consequences for palm oil production. However. In many locations. . Social. Princeton University and the Swiss Federal Institute of Technology estimate that between 1990 and 2005. In Indonesia. see panda. as well as in Africa and Latin America. are squeezed into increasingly isolated fragments of natural habitat. as these "carbon sinks" store more carbon per unit area than any other ecosystem in the world. reducing the activity of pollinating weevils. failure to follow the proper land acquisition procedures. In addition. Such poor practices have generated disputes and land rights conflicts that have hampered the ability of the companies to expand as planned. The practice of draining and converting tropical peatland forests is especially damaging to climate mitigation efforts. Climate. the burning of forests to clear land for plantations has been a major source of haze in Southeast Asia. Freshwater. Palm oil production is a major source of income for producer countries.Sustainability in the palm oil sector For more information on sustainability in the palm oil sector. the principal one being the potential for water pollution from the direct release of mill effluent. available and compatible with a profi table bottom line. or the clearing of community land without having properly informed and consulted with local communities. Forest conversion by plantation companies contributes to climate change. has not only caused negative external impacts but has also rebounded to impact the companies involved. bad practices in parts of the industry have caused serious impacts. and affecting the health and vision of the plantation workers. The major impacts are listed below. Ecological. new plantations can create social confl icts. elephants and orangutans. and serves as an important source of nutrition for people in many developed and developing countries. Such practices result in the destruction of habitats containing rare and endangered species and an increase in human wildlife confl ict as populations of large animals such as tigers. to create space for plantations. and the effects of this pollution on downstream biodiversity and people. thereby restricting their ability to harvest the fruit.org/palmoilfi nancing Global production of palm oil has doubled over the last decade to a current level of over 36 million metric tonnes per year – with Malaysia and Indonesia accounting for about 87 %. government authorities have commenced legal proceedings against several palm oil companies for illegal use of fire to clear land for plantation development. Where the rights and interests of local communities are ignored. In some cases. plantation developers have cleared large areas of natural forests and other ecosystems with high conservation values. posing serious health problems. as the haze produced by the burning can reduce the productivity of oil palm trees by hindering photosynthesis. Numerous oil palm plantations have shown that sustainable production methods are feasible.

. Table 1: Key sustainability impacts of palm oil production Impact Forest conversion Clearance techniques Bad Practice Uncotrolled – causing Lowland tropical deforestation Use of fire – causing smoke haze and CO2 emissions Planting on marginal and fragile soils – causing erosion and hydrology problems Heavy harvest offtake – reduces fertility Overuse – Causing water pollution No consideration of biodiversity impacts in plantation planning and management Drainage of deep peat soils and unsustainable use of irrigation Disputes with previous land-owners/users Violence. inappropriate use of police/military Best Practice Commitment to protect forest with High Conservation Values Use of zero-burning techniques Site selection based on assessments of soils and topography Recycling of organic materials and considered use of fertilizers Integrated Pest Management to reduce pesticide use and cultural techniques to reduce herbicide use Plantation planning and management seeks to maintain wildlife habitats and protect endangered species No conversion of peat lands and sustainable water use and recycling of waste water Focus on negotiation and confl ict resolution Recognition of local peoples’ use rights and the need to secure their free. prior and informed consent to developments that affect those rights.Table 1 summarizes some of the sustainability issues associated with the production of palm oil. Sustainable palm oil production can help to meet the world’s growing demand for edible oils and generate income and employment for local rural economies in tropical regions. collective bargaining. palm oil produced by responsible growers needs fewer inputs and results in less pollution and soil degradation. If best practices are applied in selecting and acquiring land for new plantations. palm oil can be produced without further destruction of natural forests and associated GHG emissions or disregard for the rights and livelihoods of forest dependent peoples. health and safety etc In contrast with the bad practices described above. fair and transparent grievance procedures Compliance with or beyond legal requirements Environmental Social Choice of Site Soil fertility Use of pesticides and herbicides Biodiversity Water management Competing land claims Social justice Workers’ rights Lack of regard for legal rights re.

In some cases shells are being traded. Potential for co-firing. Global trading houses such as ADM. Not available in the commodity market.For the energy and biofuel sector. Normally used for local energy generation at the mill. Less expensive than CPO. Traded in commodity markets. Used for local energy generation (at the mill) Normally not used. Available in the commodity market. there are a limited number of fuel and energy companies operating in the UK. Available in the commodity market. CIF and FOB markets. Waste product available at the mills. High acidity causing corrosion. Dreyfus and Wilmar control much of the world’s commodity flows. Import Duties Less expensive than CPO. By-product. PFAD is the cheapest vegetable oil per GJ. Palm Stearin can be used for energy generation (high melting point). Potential for local energy generation (subject to connection to the grid) Trade aspects Imported mainly for animal feed. Crude Palm Oil is being used for energy generation. . By-product. Cargill. Type of palm Applications Palm Kernel Expeller (PKE) Crude Palm Oil (CPO) Palm stearin Palm fatty acid distillate (PFAD) Palm shells Palm fibers Empty Fruit Bunches (EFB) Used for energy generation and co-firing with coal. Bunge.

e incentives.05x 50 – 50= $ 352. Definition of Bunches 1.OER x (Tcpo) – KER x (Tpk) Other cost.2 x 50 – 0. Diseased bunch – a deformed bunch 10. the processing cost(PC).Transport of FFB trucks or trailers -> first weighed over a weighbridge-> FFB loading ramp. If the FFB is from company plantation the grading provides feed back to the plantation on the FFB quality. This helps to determine the purchase price. Empty bunch. Un-fresh bunch. Price of FFB per Tonne = OER x Pcpo+KER x Ppk . Spoilt bunch. Major factors that will determine the quantity of oil (Oil Extraction Ration . Ripe Bunch – 10 loose fruits 2. discounts etc) All the above factors can be incorporated into a formula that can be solved with a computer or manually. where emptied : most trucks have tipping containers and the trucks can be unloaded fast. can be determined by stalk condition 7.OER) is the ripeness of FFB FFB Grading The purpose of FFB grading is to determine the quality of FFB received. the transport cost of CPO(TCPO).2 x 2000 + 0.A bunch 30% fruits damaged by rats. Hard bunch – A bunch with no loose fruit 9.Pcost CPO transport cost = $ 50 per ton CPO------------------Tcpo Kernel transport cost $ 50 per ton Palm Kernels--------Tpk Other costs = $ 50 per ton FFB--------------------------. For example the price of FFB for the following CPO price is $ 2000 per Ton CPO------------------------Pcpo Palm Kernel Price is $ 1000 per Ton palm kernels-----Ppk Processing Cost = $ 35 per ton FFB---------------------. and this takes time ->arrived FFB must be checked for quality: ripe FFB yields more than under ripe FFB. price of palm kernels(PK). Dirty bunch – a bunch that has earth and other dirt A rating system determines the penalty for each factor Pricing of FFB The pricing of FFB depends on the given oil extraction ratio (OER).A bunch that was harvested more than 48 hours.5 . the transport cost of kernels(TPK) and any other cost Other (i. When the fruits are ripe they fall off the bunch. Very over ripe –A bunch with more than between 10 to 50 fruits detached.05 x 1000 – 35 – 0. Over ripe bunch – A bunch with more than 10 loose fruits 3. current price of crude palm oil (CPO). A ripe fruit bunch is a bunch that has fruit that are reddish orange in colour and has some fruit that have been detached. 6. Under ripe bunch –A bunch with less than 10 loose fruit 8.A bunch more than 90 % fruits detached 5. Ripe fruit contain the maximum amount of oil.Other Cost Assume OER = 20 % Assume KER = 5 % Then the price of FFB per tonne will be = 0.Pcost. but in many remote areas the trucks are manually unloaded. 4.

This is a brief article and in future there will be other articles on specific topics for mill management. This is due to the nature of the fruits processed. A major characteristic of a palm oil mill is the very high rate of wear and tear of mill machinery. If the FFA in the crude palm oil is more than 5% then generally a lower price is obtained when the oil is sold. The profit margin will be very low if a mill that buys FFB and solely depends on processing cost margin to make a profit. Management of Palm Oil Mill Introduction This is what to and a how to article for palm oil mill existing and aspiring palm oil mill management staff. then the mill may loose money. The Free Fatty Acid (FFA) increases with time. This article is written because many managing staff have not been taught management and have been promoted to management positions due to experience. The fruits that arrive in the mill for processing also contain sand and dirt and these also contribute to the high wear rate. This article is also for Palm oil mill owners and company senior management staff so that they understand what can be expected of a palm oil mill.The profitably of processing FFB will depend on the Actual oil and kernel extraction ratios obtained in the mill and the ratios used to calculate the price of FFB purchased. The fruit fibres contain silicone and these causes wear.8% oil will be profit. To achieve this following are required A trained and experienced mill manager Trained workers.00 % extraction ratio and if the mill obtains 21. This way the retention time of FFB in the loading ramp will be minimised.8 % extraction ratio then the difference of 1. Operating Procedure loading Ramp. If the FFB is bought at 20. For detail explanation of the technical aspects the readers should refer to other sources of information or other articles. workers who can take immediate actions if some machine is not performing as designed and adjust machines if the product loss is high. For the operation of the loading ramp the operators must follow the policy of First in First out. If the extraction ratio obtained by the mill is lower than that paid for the purchase. with a below average industry production cost. even one day will cause the FFA to rise significantly. A well designed mill A system to monitor product loss and product quality A system to communicate information to all in the mill. with regards to quality and efficiency A system to maintenance the mill machinery . What is a well operated mill? A mill that can process fresh fruit bunches at the rated capacity and achieves a high extraction efficiency.

Most of the mills are unable to process at the design capacity because of design defects. Many owners demand more that this from a mill.99 x 0. For example 60 tons per hour mill cannot process at 60 tons per hours for 20 hours per day if the maximun capacity of the mill is 60 tons/hr.0. This normally results in the mill breaking down more often and the end result is a less efficient mill. As an example the steriliser station must have a capacity of 120%. It normally takes about 30 minutes to 60 minutes for the mill to achieve its rated capacity. 54 tons per hour. Suggested Objectives are To process the crop at the rated capacity of the mill. like the internal cleaning and inspection of the boilers and inspection of the steam turbines. The mill equipment has to be looked after well so that it does not break down.000 tons of FFB per year. so that the last machine can achieve a capacity of 100 %. There are more than 25 machines in series. The equipment wears out and the efficiency is not at its peak for all its operation life. If each machine is 99 % efficient the total process efficiency will be 99 To Power of 25. The total line efficiency will be 77 percent. elevators and other equipment have to be emptied before all equipment is stopped.77. assume 25 operation days per month. To achieve the design throughput the individual machines in the mill should be designed to have a throughput of 120 % of the desired throughput. How to achieve throughput? To achieve throughput if the mill is design correctly. A well organised and maintained 60 ton/hr mill should be able to process 300. Every day when the mill starts in the morning it cannot immediately operate at its rated capacity. When the mill is shut down this process is reversed and all the conveyors. the mill management can take a few actions. The palm oil mill process consists of a series of machines processing the palm fruit components. The machines must be cleaned on a regular basis and any parts that have worn to limits of their use must be . These include the following Maintenance.000 tons per month.99 …= 0. Example: 0. The average throughput for the day will be less than 60 tons per hour and normally is about 90 % of the rated capacity i. Therefore 60 tons per hour mill should be able to process 54x 20 = 1080 tons per day or 27. Many mills are not designed to do achieve this capacity. In normal off peak month operations the mill also stops one day a week for maintenance and cleaning.e. The above capacities are based on the mill stopping for a period of two weeks every year for major maintenance work. Production records The manager responsible for the operations of the palm oil mill must first understand his major objectives. To achieve a high processing effiency ( More than 90%) This is not always easy. This will enable him to make his decisions and manage his time for the maximum profitability of the mill.Production procedures.99 x 0.99 x0. This will result in a mill to be run for longer hours and also on Sundays.

Oil Loss in Sludge. This is minimised by operating the screw press at the correct pressure with the screws in good condition. The major oil loss in the palm oil process occurs in the Fibre. All these processes must be monitored to achieve a low oil loss in the press fibre.replaced. Procedures to start up and shut down the mill need to be documented and workers trained to carry these out. This normally happens when there is insufficient sludge centrifuge capacity. The most common way to loose oil in sludge is to discharge un treated sludge into the drain. Failure to do this will result in an unreliable mill. Oil Extraction The mill can reduce the oil loss in the process. ((90 % of all oil losses) Oil Loss in press fibre. This is achieved by setting the skimmer in the clarification at the correct height (100mm to 150 mm) and by maintaining an oil water ratio of 30 % to 38 %. The mill supervisors cannot be everywhere in the mill at all times. this is the job of the plantation. And press fibre. For a mill to have low kernel loss the following must be attended to Low nut breakage in the press. the mill should shorten the steriliser cycle. depending on the number of presses in operation. This should be a continuous process and carried out by the mill manager or outside staff if required. The fruits must also be pre-treated well in the digesters. When the fruit is over ripe. Sludge and Steriliser condensate. The mill cannot increase the quantity of oil and kernel that is in the fruits. The best way to operate the mill correctly is to employ experienced mill management staff who can guide the workers to take the correct actions when a problem arises. The pre-treating or mashing of fruits in the digester depends on how well the fruits are sterilised. Therefore oil loss in the press fibre depends on. To Achieve High efficiency By this we mean to extract the maximum amount of oil and kernel from the fruits delivered to the mill. Train staff in their jobs. correct digestion and correct pressing. To achieve a good efficiency the sludge centrifuges must be maintained well. correct sterilisation. To achieve the best through it is advisable to train the workers to work efficiently. It is advised to have a planned schedule to carry out work. The dilution should be monitored at the crude oil tank by the use of a hand centrifuge on an hourly basis by the operators themselves. Most mills stop one day a week to carry out maintenance. The oil loss occurs due to a longer than necessary steriliser cycle or due to over ripe fruit.Do not press at a very high pressure . Kernel Loss occurs in the pneumatic kernel separators and the hydro cyclone. Processing Procedures. The correct number of sludge centrifuges must be in operation. The nozzles must not be worn above the allowed limits. Oil loss is the result of poor separation process in the clarification station. To achieve a good separation the clarification tank must be operated correctly. Experienced workers can adjust the water by monitoring the number of turns of the water valve to achieve correct dilution. .

the following samples are required.Store Keeper .Kernel loss in press fibre.Mill Manager .Accountant . This is achieved by taking the required samples and analysing them and reporting the results to management for action. The function of process control is to help management to achieve a high efficiency. Percentage cracked nuts in press-cake fibre Cracking efficiency Kernel loss in press fibre Kernel loss in pneumatic separators Kernel Loss in Hydro cyclone Proper separation of oil in sludge the sludge centrifuges. The end of this brief article By the POMILL team . the following samples are required. The following samples should be taken and analysed: FFB Ripeness Un-stripped bunches Oil loss in condensate Oil loss in press-cake Oil loss in sludge Oil loss in final effluent Oil Loss in steriliser condensate.Electricians . Free Fatty acid content of production oil Dirt content in production oil Moisture content in production oil To monitor kernel quality.Maintenance assistant .Asst Manger .Process Assistant . To monitor oil quality. Monitoring of mill efficiency.Administration staff .Laboratory Assistant . A high cracking efficiency ensures lower kernel loss as there are less un-cracked nuts.Mechanical Fitters .Process workers The total number of workers in a modern 60 tons per hour palm oil mill should be about 130 workers for three shift operations. Staff Requirements for a palm oil mill .Chief Security .Due kernel breakage in the screw press because of too high a press pressure.Electrical Charge man .Mechanical Foreman . Moisture content of production kernel Dirt content of production kernel.

the solid consistency of palm stearin makes it useful in the production of margarine and shortening. Also called “superolein. fatty alcohols. Palm Mid Fractions Another product of the double-fractionating process. cleaning products. rubber. The fluid part of pure palm oil. Widely used for frying foods. Palm o il derivatives can be further split a second time to produce doublefractionated palm olein. liquid palm olein is naturally liquid at room temperature in warm climates. and in skin care products including lotions. palm oil is split into two products: liquid palm olein and solid palm stearin. Palm Olein At the first stage of fractionating. There are five basic oleochemicals: fatty acids. Deoderised Roundtable on Sustainable Palm Oil Palm Stearin Superolein FFB PKM PKO CPO RBD RSPO .and in baked goods requiring the use of hard fats. fatty methyl ester. palm mid fraction commonly appears in the manufacture of margarine and snack foods. Fresh Fruit Bunches Palm Kernel Meal (also called Palm Kernel Expeller. Solid palm stearin is the solid part left after liquid palm olein is removed during the splitting process. Bleached. These palm-based oleochemicals appear in products such as candles. fatty nitrogen compounds and glycerine. shampoos and body oils. As its name implies.” this derivative cooking oil provides clarity and pourability in temperate climates and blends well with various seed oils. it blends well with other vegetable oils and is valued for its resistance to oxidation and the long shelf life it lends to foods fried in it. or PKE) Palm Kernel Oil Crude Palm Oil Refined.Glossary Oleochemicals Chemicals derived from oils are called oleochemicals.