Saturday, 13 June 2009

DIPOM ; The Palm Oil Factory


by Ir. Amin Buhari Hj. Md. Zain

summary of the notes

1. Planning for operation

1.1 Investment
1.2 Justification
1.3 Project Management
1.4 Project Appraisal


A feasibility study cover :-

2.1 The FFB available for the manufacture
2.2 The cost of getting the FFB to the mill gate
2.3 The cost of manufacture
2.4 Investment cost of the Plant
2.5 Evacaution of the products and the markets
2.6 Approval from the relevant authorities for issuing of licences for the construction, operation and other environmental impact factor.
2.7 The proper phasing of the processing capacity of the palm oil mill which affects the cash flow requirements (especially when substaniate loan and interest are a major factor)


3.1 Crop projection
3.2 Initial planning of required capacity
3.3 Site selections
3.4 Capacity expenditure projections
3.5 Details engineering design of machinery, choice of equipement, prepration of drawing, specifications, contract documents, etc.
3.6 Supervision of the construction
3.7 Training / commisioning
3.8 Project appraisal


Each project or mill will have different consideration but generallay the method to be adapted for any proposed mil construction is to list the planted acreage along with the year of planting in the field and the allocation theoretical yields/acre in the following manner.
Table 1 : Year, Acreage, Yield, Crop projection
To complete the factor throughput requirement capable of handling peak month crops at 12.5 % of the annual crop and on 25 operational days / month at 20 hours/day
Table 2 : Crop projection, monthly crop, peak month crop, peak day crop
to justify throughput (mt/hr)
8 hours operation
16 hours operation
20 hours operation
From the Table 1 & 2, we can make the choice on the timing of the operation and the mill capacity requirements.
a. Generally, the availability of the fuel is only sufficient nowadays when a mill operates at 20 tonnes FFB/hr. This is not to say we cannot operate a 10 mt/hr mill but will entail alternative power supply for the operation. Any throughput below 20 mt/hr will be considered low in the fuel availability and not able to support the kW demand.
On the other hand, it may be possible to get mains electricity which could make a 10 mt/hr mill a profitable venture.
b. Outlet available for the fruit? any nearby mill? or considered cheaper to manufacture outside rather than building your own mill. The break-even point is usually mill overheads or fixed charges against transport cost, assuming that the extraction rate given are always fixed.
c. Usually, it is better to delay heavy Capital Expenditure as long as possible. However, each case has to be considered separately. We must bear in mind that bank loans have to be serviced once the facility is built. There is an immediate commencement of depreciation.
extension programmes
MPOB throughput x 25 days x 16 hours/day = maximum crop
Clearing land after the palms come into maturity or start bearing fruit. Actual requirement :-
5.1 Areas of mill's building and compound
5.2 Quarters for labours/staff/executive
5.3 Roads and accessibility
Fixed variable : Transport of FFB, mill produces and mill operating cost such as the water supply, disposal of effluent etc. A compromice has to be made between these factors from which a determination can only be arrived at after a full cost study.
Site with poor ground loading conditions requires extra cost for piling and costly excavation/filing for undulating area respectively.
Cost in general infrastructure, water treatment costs, cost of road access to site etc
Regualtions in force which could affect the selection of the site as regards to environmental conditions and has to be borne in mind.
Important of available of money to prevent the project fall behind time and incuring extra loss.
example : 60 mt/hr Cost of a palm oil mill at roughly RM28,000,000., depends on where it is built and what goes into it.
Also depends on what equipment we chooses to install.
Commence at least two years prior to the commisioning of the mill.
A long lead time on the delivery of the certain items of equipment and the choice of these items needs to be very established in order to allow the required period for fabrication, delivery and installation. (a period which could stretch to about 1 to 1.5 years).
Equipement selection, correct balance for throughput, steam consumption etc. The actual requirements. (Refer to Fuel/Steam Balance).
Standardization of equipment such as valves, gearboxes, electric motors, starters etc.
Main items of equipment, layout of the mill, design of the buildings and initial work on the layout of the machinery. Final work on the machinery layout and working drawings etc.
Thought must be given to the number of workers that will be required to operate the mill. In step of the development, the adjustment to the design can be made so that the best use of the workers.
Safety factors should be put at first place during the construction stage and even more during commissioning stage in regards safe working practices.
Sufficient time should be allocated to carry out the actual construction work for the mill.
The civil works sholud be completed before work commences on the erection of machinery.
The erection of machinery and equipment should follow the logical sequence of commencing from in to out i.e pressing station erected first in the main bay, threshing and kernel/clarification station to follow.
To make sure all installation are user friendly for operation and maintenance.
The training of personnel who will be operating the mill when it is commissioned is something which invariabley does not receive sufficient attention and yet is very important aspect as it could bring about savings regarding loss of product and expenditure on maintenance due to mal - operation of machinery.
Mill Manager to operators in the mill. A carefuly planned progremme should be drawn up to suit the training of each individual or group of individuals.
Systematically implemented and correct.
A period of one month.
First stage, all items of equipment should be run-up separetely under no-load conditions.
A through inspection should be carried out on the equipment during operation and after the no-load test run. This should show up any faults such as misalignment, poor fitting, etc shich can be corrected before running under loaded conditions.
Next stage, run at short period (4 to 8 hours) with the passing through the mill at low throughputs.
Not all equipment should be brought out into operation, as in the initial stages of operation with product. The kernel station only can be run after nut silos are fully loaded.
If any faults arise with the equipment during the commissioning stage, it is the best to cease operation and correct the fault rather than improvise.
After a periond of 2 weeks of gradually increase in running hours and throughputs, it should be possible to operate the mill at its designed throughput.
The availability of fuel is always a problem during the commissioning period and an edequate quantity of fibre/shell should be stockpiled at the mill prior to the commissining date.
Well planned from the begining to the end. It is not only important to get the project finished on time but also important it is finished within budget and performs up to specifications i.e quantity and quality.
Use of a CPA or network analysis to enable the various major event to be planned in such a manner that there was continuity of works and that important items are nor forgetten.
In order to improve the project management, the review of process, engineering design, cost factors. If a well organized Project Management Plan has been initiated form the start, then the final appraisal becomes a check against what was initially planned.
This is the most important part of any project and one that is usually not done efectively. That why our industry mistakes are often repeated over and over again.


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