kim loong palm oil site visit oct 2012

Author: Nickolas Ho

Kim Loong Palm Oil Site Visit

Palm Oil Mill and Plantation Insights

Author: Nickolas Ho 1

Introduction

Company Profile

Kim Loong Palm Oil Mills Sdn. Bhd. engages in the processing and marketing of oil palm products such as Crude Palm Oil (CPO), Palm Kernel Oil (PKO) and the carotene packed Red Palm Oil. They have also recently begun processing and sale of fertilizers originating from the residual palm fibre, husk and kernel. The company was incorporated in 1993 and is based in Kota Tinggi, Malaysia. Kim Loong Palm Oil Mills Sdn. Bhd. operates as a subsidiary of Kim Loong Palm Oil Sdn. Bhd.

Located within 10 degrees of the equator and receiving consistent rainfall throughout the year, Malaysia is in the ideal position to plant and harvest palm oil trees cost efficiently, where assured irrigation systems are not required. This cost efficiency is reflected in the high CPO yields and profit sustainability of the company, reporting healthy financials despite a perilous economic climate. The long-term outlook for the palm oil industry in Malaysia remains positive. The palm oil price is expected to remain good and steady in the financial year 2013 due to uncertainty in weather conditions in major soybean oil producing countries and the steady crude oil price, arising from geo-political instability in producing countries and in the Middle East.


Plantation

Plantation Profile

Plantation grounds

FFB produced by the Oil Palms The Kim Loong Group has plantations located in the states of Johor, Sabah and Sarawak. Winsome Al-Yatama Sdn. Bhd. Oil Palm Estate in Kota Tinggi, was the plantation that the group visited. The plantation operations did not face problems in selling its FFB production as most of the produce was supplied to mills within the Group.


Plantation

Plantation Area

The land area of the plantation grounds stretches for miles

While the Kim Loong Group owns a total of 15,192 ha of plantation land, the Winsome Al-Yatama Oil Palm Estate boasts a massive 1,243.3 ha of plantation area.

Plantation area overview


Plantation

Insect Pollination of Oil Palms

Elaeidobious kamerunicus African pollinating weevils were introduced into the plantation and were very successful with insect pollination. Dispensing with the need for assisted pollination that required a significant amount of manpower as well as significantly improving fruit set, and hence increasing yields.

Male flower of the Oil Palm


Plantation

Harvested Fruit

Anatomy of a Palm Fruit The palm fruit harvested from the plantation, these are harvested in the form of a Fresh Fruit Bunch (FFB) by the workers at the plantation.

FFB (top) and Palm Fruit Measurements (below)


Palm Oil Mill

Palm Oil Mill Profile

The Kim Loong Group owns and operates three palm oil mills, which are strategically located close to the plantations in Kota Tinggi, Johor and in Keningau and Telupid, Sabah. The three palm oil mills have a total FFB processing capacity of 1,200,000 MT per year. The mill we visited in Kota Tinggi had a processing capacity of 60-100 MT of FFB per hour. The Crude Palm Oil (CPO) produced is sold to refiners like Wilmar and nothing else goes to waste. The Husk, Shell and Fibre are processed into Fertilizers and Biomass and are exported. Any leftovers are turned into electrical energy by the mill’s turbine and used to power their operations. Any waste is properly treated before discharge, maintaining the environmental sustainability and earning the mill carbon credits.


Palm Oil Mill

Oil Production

Three main types of Palm Oil extracted Crude Palm Oil is obtained from the Mesocarp of the Palm Fruit, while Red Oil is extracted from the remaining Mesocarp Fibre and the Palm Kernel Oil is obtained from the Palm Kernel.

Ripe FFB (top) yields more oil content than unripe FFB (below)


Palm Oil Mill

Bio-Fertilizers

Fertilizers Exported to Korea and Vietnam The Empty Fruit Bunch (EFB) from the palm oil mill was initially a discarded product after palm oil extraction process. With improvements to the mill’s processing technology, the EFB could be further processed into a usable fertilizer for crop. The EFB goes through series of manufacture process, shredded, press, de-oil, drying and composting before it becomes fertilizer. These are sold overseas and provide a substantial return for something others may consider “industrial waste”, Kim Loong turns it into “profit”.

Composting of EFB Fibre and Effluent Sludge


Palm Oil Mill

Transportation

FFB Transport

CPO Transport To move the various products that the Group harvests or produces, they use specialized transports in order to keep production running smoothly.


Conclusion

Key Takeaways

Kim Loong Oil Mill Site Visit: A learning journey The students from the International Trading Concentration benefitted the most from the trip in terms of experiential learning and getting a better understanding of the Palm Oil supply chain and business operations. It is encouraging to know that opportunities in this industry are still growing and the outlook for the next decade is still bright despite a pessimistic global economic situation.

Palm oil used in potato chips The next time when you buy a pack of potato chips, be sure to check the ingredients at the back. Chances are, if it states that “Vegetable Oil” was used in production, it may actually “Palm Oil”.

kim loong palm oil site visit oct 2012

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