Technology innovation and business model of palm oil miniplant for food and energy

Abstract

Palm oil is Indonesia’s main export commodity and has many contributions to the economy. Palm Oil Mill is built by private or state-owned company with the minimum capacity of 30 tph and far from smallholder plantations. Transportation costs and delays have caused the quality of fresh fruit bunch decrease and prices have dropped in the farmer level. This study aimed to design a palm oil mini plant by evaluating existing technology, innovating process, and equipment design, also analyzing financial aspect. The methods used in this research were literature study, laboratory test, interview, and observation. The selected process technology was sterilization using steam (t = 90 minutes, T = 130°C, P = 300 kPa), threshing with rotating speed of 21 rpm, heating method in the digester (t = 14 minutes, T = 90°C, v = 23 rpm), extraction of oil palm fruit with a screw press machine (P = 4500 kPa, v = 11 rpm). The process of refining Crude Palm Oil (CPO) gone through 3 stages, namely degumming with water degumming, neutralization using deacidification, and fractionation using the dry method to produce Refined Palm Oil (RPO). Technological innovations were carried out in vertical sterilizers with the addition of water to the sterilizer when loading the fruits, the use of augers and improvements to the sterilization system. The value propositions of palm oil miniplant business model are the ease of bureaucracy, flexibility of small-scale industry, high quality (FFA<5%), and competitive prices. The supply chain flow starts from independent smallholder plantations to oil palm miniplants without going through collectors. The products are CPO, RPO which high antioxidants activity because of tocopherols and carotenoids content, and Palm Kernel (PK). The financial feasibility analysis of palm oil mini plant resulted in an NPV of IDR 15,068,339,048, IRR of 28%, BCR of 11,7 and PBP of 2,8 years. This study showed that the palm oil mill mini plant is financially feasible to build.