PALMOILMILLPROJECT

MANAGEMENT
Lectureno2
IntroductionPalmOilMillProject

05/17/15

Definition
The

Palm Oil Mill Project can be

defined as The creation and
Implementation of Plans for
machines, structures and systems or
processes to perform the desired
milling function of oil palm fruits to
efficiently recover palm oil and palm
kernels with minimum loss.

05/17/15

WHAT IS PALM OIL

MILL ?

05/17/15

05/17/15

05/17/15

OBJECTIVEOF
PALMOILMILL

05/17/15

OBJECTIVE TO HAVE
PALM OIL MILL

To Process Oil Palm Fruits

Commercially

To process FFB from own estates

To commercially offer processing
capacity to out growers or small
holders
To process of both own estate ffb
and outside source

05/17/15

Background
Stork Amsterdam was the pioneer as oil
palm factory designer, parts supplier and as
contractor in the early days of milling
technology.
Transfer the trade indirectly to local sub
contractor through local fabrication works
for cost savings.
Time saving and Guarantee of Operation
type of approach by Local industry then
accept local mill design and fabrication by
local contractors modeled closely to original
Stork
05/17/15

Background Contd.
Approach of Big Plantations Agencies by
Looking at Basic Fundamentals
New innovative ideas

Resulted in agency mills design varies from

time to time and from place to place to
justify the followings requirements

To strike for easy milling operation

Easy maintenance & Operator friendly
Taken into consideration human welfare aspects
Long run investment type, using long lasting parts and
materials.
Operating cost optimization in the long run

05/17/15

Fundamental
The processes Palm Oil Mill is made up
of many sub processes which should
have the following attributes
Safe and user friendly
Good and high performance
Cost Effective
Environmentally friendly

05/17/15

10

Fundamentals Contd.
No significant different between palm oil mills
CPO and PK are extracted mechanically from FFB.
All Mills basically consisted the following basic
processes;

Material Handling (Conveyors, elevators)

Mechanical Extraction (Screw Press)
Separation (Mechanical, Pneumatic & Hydraulic)
Heat Transfer (Sterilization & Drying)
Energy Conversion (Boiler, Turbine, Fans, Pumps)
Distribution of Energy

05/17/15

11

REQUIREMENTS OF PALM OIL MILL

To be suitable for processing palm fruits
To extract and recover CPO and PK with
acceptable minimum loss
To produce CPO and PK of highest quality
To facilitate the disposal of shell, fibre and
empty bunches
To incinerate or to treat the empty bunch
to recover 0.25% additional oil and used
as fuel to produce steam for more
valuable electrical power generation
05/17/15

12

Requirements of Palm Oil Factory Contd.

The plant and process shall be Environmentally

friendly and to dispose of waste water (sludge)
through proper waste water treatment so as
not to pollute local rivers and waters
To be reliable and suitable for local conditions
of labour, supervision and maintenance
Consideration and incorporation of safety
aspects that comply with OSHA such as to
provide for good ventilation, working space,
dust free and noise levels within permissible
limits.

05/17/15

13

Requirements of Palm Oil Factory

Contd.
The incorporation of operating procedures,
equipment, plant and process systems to meet the
ecological, hygenic and cleanliness of the plant on
par with food manufacturing standards (New
Challenge HACCP)
Designed for cost effectiveness for operation and
maintenance.

05/17/15

14

Palm Oil Mill Project

Introduction

Before constructing palm oil mill, planning and

selection of the propose mill site is very important.

It is a very good approach if this planning is made

during planting stage to avoid wasting of cost for
unnecessary clearing the planted palms tree for the
construction of mill.

However this always not the case as most of the mills

has also been constructed upon decision of site after
estate is ready.

05/17/15

15

Palm Oil Mill Project

The implementation of Palm Oil Mill project usually

as stated in six phases of project life cycle
discussed in the chapter one of this lecture

Concept
Definition
Design
Development/ Fabrication
Erection/ Application/ Commissioning
Post completion

05/17/15

16

Palm Oil Mill Project

CONCEPT

OPERATION INPUT
INVESTIGATION OF TECHNOLOGY
FEASIBILITY STUDY
BUSINESS SURVEY

DEFINITION

SPECIFY THE OBJECTIVE OF CONSTRUCTING THE MILL

ESTABLISH TARGETS
ESTABLISH PROJECT ORGANIZATION
SETUP PROJECT NOTEBOOK

DESIGN
DEVELOPMENT & CONSTRUCTION
ERECTION/ APPLICATION/ COMPLETION
POST COMPLETION
05/17/15

17

Palm Oil Mill Project

CONCEPT

ESTATES OPERATION INPUT

Toobtainsizeofplantingareaandexpectedyearofmaturity
FFBProjection/Forecastfornext15to25years
Companymillingpolicyi.e.toprocessallcrops
FEASIBILITY STUDY TO ASCERTAIN PROJECT VIABILITY
DeterminetherequiredmillcapacityfromtheFFBprojected
ConsideroptionssuchasdeferbuildingoilmillandsellFFBetc
PrepareFinancialanalysistocalculateReturnofInvestment,IRR(InternalRateof
Return),Paybackyearsetc
BUSINESS SURVEY
Nearbythirdpartyestates
OtherPalmOilMillsintheregion
FuturetrendofplantingOilPalmintheregion
INVESTIGATION OF TECHNOLOGY
WhatisthenewertechnologyavailableinPalmOilMillforconsideration
ConventionaltypeofdesignorusingnewapproachsuchasContinuousSteriliseror
VerticalSteriliser
Finalisewhatisinmindandevaluatethecostinvolve

05/17/15

18

Palm Oil Mill Project

DEFINITION
SPECIFY THE OBJECTIVE OF CONSTRUCTING THE MILL
Toserveonlyownestates
Toventureinto3rdpartymillingbusiness
Deadcapacityorfutureexpansionplan
ESTABLISH TARGETS
Targetthecompletionofthemilltobe
TargettoobtainApprovalfromallrelevantauthoritysuchasEPU,State
Gov,DOE,MPOB,MajlisDaerahetc
Targettocompletethedesign
Targettotender
Targettoawardtheproject
ESTABLISH PROJECT ORGANIZATION *
SETUP PROJECT NOTEBOOK *
05/17/15

19