Integrated Process Chain Management from Oil Palm Seed to Palm Oil

Tony Liwang
Sinar Mas Agro Resources and Technology (SMART) Research Institute Sinar Mas Agribusiness & Food Indonesia
ANUGA Food Tec, Koln, Germany, 2006

Agenda
1. Palm Oil for Food & Non Food Uses 2. World Edible Oil Production & Consumption 3. Indonesian Palm Oil & Food Safety 4. Palm Oil Process Chain Management
4.1. 4.2. 4.3. 4.4. Oil Palm Seed Production Oil Palm Plantation Palm Oil Mill Palm Oil Refinery

ANUGA Food Tec, Koln, Germany, 2006

Agenda
1. Palm Oil for Food & Non Food Uses 2. World Edible Oil Production & Consumption 3. Indonesian Palm Oil & Food Safety 4. Palm Oil Process Chain Management
4.1. 4.2. 4.3. 4.4. Oil Palm Seed Production Oil Palm Plantation Palm Oil Mill Palm Oil Refinery

ANUGA Food Tec, Koln, Germany, 2006

 Cooking Oil Deep Frying Oils Margarine & Spreads Bakery Fats (Shortenings) Cocoa Butter Fats Confectionary Fats Ice Cream Fats Infant Nutrition Fats ...

Food Uses of Palm Oil and Kernel Palm Oil

ANUGA Food Tec, Koln, Germany, 2006

Surfactants & Lubricants Grease Candle / Wax Soap Bio Fuel

Tupperware Cosmetic
ANUGA Food Tec, Koln, Germany, 2006

Agenda
1. Palm Oil for Food & Non Food Uses 2. World Edible Oil Production & Consumption 3. Indonesian Palm Oil & Food Safety 4. Palm Oil Process Chain Management
4.1. 4.2. 4.3. 4.4. Oil Palm Seed Production Oil Palm Plantation Palm Oil Mill Palm Oil Refinery

ANUGA Food Tec, Koln, Germany, 2006

World Edible Oils & Fats Production & Consumption

World Oils and Fats Production 1980 - 2020

( 106 tons)
Production World Palm Oil Soybean Rapeseed Sunflower 1980 58.04 4.59 13.42 3.48 4.98 1990 80.77 11.03 16.14 8.18 7.80 Year 2000 114.51 21.73 25.48 14.24 9.63 2010 (f) 153.30 35.10 37.50 20.70 10.98 2020 (f) 194.43 49.42 41.39 25.15 17.49 % Growth * 2000 - 2020 2.70 4.10 2.40 2.80 3.00

Source : Yusof (2001) (f) forecast (*) Compounded Annual Growth Rate using the Formula, P = c (I = r)n where P = future volume, r = rate in %, and n = number of years

ANUGA Food Tec, Koln, Germany, 2006

World Edible Oils & Fats Production & Consumption

Development of World Palm Oil Production

1969 ( 000 tons) Malaysia 370 Indone sia 190 Nigeria 50 Colombia 30 Thailand NA Congo 230 Others 260 Total 1 130 Country % 32.74 16.82 4.42 2.66 20.35 23.01 100.00 2001 2004 ( 000 tons) % ( 000 tons) % 11 660 48.26 13 974 46.00 8 300 34.36 12 080 39.00 750 3.11 790 3.00 560 2.32 632 2.00 530 2.19 668 2.00 96 0.40 NA 2 263 9.36 NA 24 159 100.00 > 30 000 100.00

ANUGA Food Tec, Koln, Germany, 2006

World Edible Oils & Fats Production & Consumption

Palm Oil Consumption

Year Country EU 25 China India Indonesia Pakistan Malaysia 2002 2004 Data in 2004 Population Caput O&F Palm oil / use total O&F
106 kg/person %

10 6 tons 10 6 tons

2.5 1.6 3.6 2.9 1.1 1.5

3.8 3.7 3.4 3.3 1.4 1.8

455 1 299 1 096 225 161 25

48.2 18.9 11.5 17.7 19.5 -

17 15 27 83 45 -

ANUGA Food Tec, Koln, Germany, 2006

World Edible Oils & Fats Production & Consumption

Productivity of Edible Oils

( total oil in ton Ha-1)
5 4 .5 4 3 .5 3
s oybean oil

P alm Oil

Coconut oil

Repr es eed oil

2 .5 2 1 .5 1 0 .5 0

Palm Oil

Coconut oil Represeed oil

soybean oil

ANUGA Food Tec, Koln, Germany, 2006

World Edible Oils & Fats Production & Consumption

Some facts :
1. The world production of Oils and Fats in 2004 was around 130 million tons, of which 80% was used for Food and 20% for NonFood purposes 2. Two oils & fats sources determine the market, i.e. Palm Oil and Soybean Oil, each of which is about 30 million tons per annum 3. Palm Oil supplies at least 22% of the global demand for Oils & Fats 4. About 50% of the global export trade in Oil & Fats depends on Palm Oil
ANUGA Food Tec, Koln, Germany, 2006

World Edible Oils & Fats Production & Consumption

Some facts (contd) :

5. About 50% of the Palm Oil produced in the world is used by four equally big users: EU 25 countries, China India, and last but not least the Indonesian domestic market 6. Total European Palm Oil consumption is 13 % of world consumption 7. The import of Palm Oil (including Palm Kernel Oil) in the EU 25 has increased enormously from 2.7 million MT in 1997 to 4.6 million MT in 2004 (Oil World Annual 2005) 8. The Palm Oil imported by the EU 25 is mainly from Indonesia and Malaysia
ANUGA Food Tec, Koln, Germany, 2006

World Edible Oils & Fats Production & Consumption

Some facts (contd) :

9. The EU 25 importation of Palm Oil is mainly coming through the Netherlands as the centre for palm oil distribution to other countries in Europe. 10. The highest rate of the consumption of the Palm Oil in Europe is UK, followed by the Netherlands and Germany. These three countries contribute about 60% of the Palm Oil demand in EU 11. Palm Oil as Food and Feed needs to fulfill the EC Regulation 178 / 2002 as basis for the approaches to the Food Safety

ANUGA Food Tec, Koln, Germany, 2006

Agenda
1. Palm Oil for Food & Non Food Uses 2. World Edible Oil Production & Consumption 3. Indonesian Palm Oil & Food Safety 4. Palm Oil Process Chain Management
4.1. 4.2. 4.3. 4.4. Oil Palm Seed Production Oil Palm Plantation Palm Oil Mill Palm Oil Refinery

ANUGA Food Tec, Koln, Germany, 2006

Indonesian Palm Oil & Food Safety

Indonesian Laws & Regulations from Farm to Table

Law UU No. 7/96 for Food Law UU No. 8/99 for Customer Protection Govt. Regulation PP 28/2004 for Food Safety, Quality, and Nutrition Health Ministry Regulation Permenkes RI No. 722/Menkes/Per/IX/88 for Food Additive Materials

ANUGA Food Tec, Koln, Germany, 2006

Indonesian Palm Oil & Food Safety

Area of Oil Palm Plantations in Indonesia based on the Type of Producers (in Ha)
Year 1998 1999 2000 2001 2002 2003 2004*
estimated figure

Smallholders 890 506 1 401 046 1 166 758 1 561 031 1 808 424 1 854 394 1 904 944

Government 556 640 576 999 588 125 609 943 631 566 662 803 675 090

Private Plantation 2 113 050 2 283 757 2 403 194 2 542 457 2 627 068 2 766 360 2 820 525

Total 3 560 196 3 901 802 4 158 076 4 713 431 5 067 058 5 283 557 5 400 559

Palm Oil producers in Indonesia can be categorised in 3 types namely: smallholders, private companies, and state owned plantations
ANUGA Food Tec, Koln, Germany, 2006

Agenda
1. Palm Oil for Food & Non Food Uses 2. World Edible Oil Production & Consumption 3. Indonesian Palm Oil & Food Safety 4. Palm Oil Process Chain Management
4.1. 4.2. 4.3. 4.4. Oil Palm Seed Production Oil Palm Plantation Palm Oil Mill Palm Oil Refinery

ANUGA Food Tec, Koln, Germany, 2006

Integrated Palm Oil Process Chain Management

4. Integrated Palm Oil Process Chain Management

UP-STREAM MID-STREAM DOWN-STREAM

Oil Palm Seed Production Oil Palm Plantation Palm Oil Mill Palm Oil Refinery
ANUGA Food Tec, Koln, Germany, 2006

4.1. Oil Palm Seed Production

Integrated Palm Oil Process Chain Management

GMO Free Planting Materials Parents materials used are crossed from the registered pedigree (by the Indonesian Government) Documentation and Certification ISO 9001:2000 Quality Management System for Seed Production ISO 9001:2000 Quality Management System for Research & Development ISO 17025 Accreditation of Laboratory Management System
ANUGA Food Tec, Koln, Germany, 2006

4.1. Oil Palm Seed Production

Integrated Palm Oil Process Chain Management

Traceability for Oil Palm Seed Production with the Barcode Management System Pollination (pollen source, male/female flowers) Bunch Harvesting Seed Processing Seed Germination Processing Packaging and Transportation

ANUGA Food Tec, Koln, Germany, 2006

4.2. Oil Palm Plantation

Integrated Palm Oil Process Chain Management

GMO Free Planting Materials High Conservation Value Forest (HCVF) Better Agricultural Practices (BAP) Fertilizer Use Pesticide Use Integrated Pest Management (IPM) Integrated Weed Management (IWM) Waste Management (Recycling, Reuse, Recover 3R) Environment Impact Assessment (EIA) Documentation & Certification ISO 9001:2000 Quality Mgmnt System
ANUGA Food Tec, Koln, Germany, 2006

ISO 14001:2004 Env. Mgmnt System

4.2. Oil Palm Plantation

Integrated Palm Oil Process Chain Management

Agro-Environmental Indicators for Oil Palm Plantation

ANUGA Food Tec, Koln, Germany, 2006

4.2. Oil Palm Plantation

Integrated Palm Oil Process Chain Management

Safety Use and Agro-Environmental Impact of Pesticides

ANUGA Food Tec, Koln, Germany, 2006

4.2. Oil Palm Plantation

Integrated Palm Oil Process Chain Management

Safety Use and Agro-Environmental Impact of Pesticides

ANUGA Food Tec, Koln, Germany, 2006

4.2. Oil Palm Plantation Waste Management

Integrated Palm Oil Process Chain Management

ANUGA Food Tec, Koln, Germany, 2006

4.2. Oil Palm Plantation

Integrated Palm Oil Process Chain Management

Documentation & Certification ISO 9001:2000 Quality Mgmnt System ISO 14001:2004 Env. Mgmnt System Traceability for Oil Palm Plantation Area Unit Identification (block by block, @ 30 Ha) GIS Map & Information System SAP Data & Information System Harvesting and Transportation

ANUGA Food Tec, Koln, Germany, 2006

4.3. Palm Oil Mill

Integrated Palm Oil Process Chain Management

Good Manufacturing Practices (GMP) Waste Management (Recycling, Reuse, Recover 3R) Environment Impact Assessment (EIA) Documentation & Certification ISO 9001:2000 Quality Mgmnt System ISO 14001:2004 Env. Mgmnt System Traceability for Palm Oil Mill Area Unit Identification SAP Data & Information System Harvesting and Transportation
ANUGA Food Tec, Koln, Germany, 2006

4.4. Oil Palm Refinery

Integrated Palm Oil Process Chain Management

Waste Management (Recycling, Reuse, Recover 3R) Environment Impact Assessment (EIA) Documentation & Certification ISO 9001:2000 Quality Mgmnt System ISO 14001:2004 Env. Mgmnt System HACCP Codex Alimentarius Traceability for Palm Oil Refinery Area Unit Identification Transportation & Logistic
ANUGA Food Tec, Koln, Germany, 2006

Todays Challenge

Integrated Palm Oil Process Chain Management

Food production, including Palm Oil, is expected to grow at least at the same pace as population growth. Therefore it will be an increasing demand for edible oils and agricultural products in the future At the same time, the demand for food safety and security and the awareness towards conservation of the environment and sustainability of the Palm Oil industry get more attention These issues are highlighted in several international forums and meetings Exchange views and information within all stakeholders (producers, consumers, financial institutions, NGOs and governments) are needed Smallholders oil palm plantations and their small scale enterprises need more attention and effort to fulfill all requirement needed for food safety and security in each step of palm oil process chain
ANUGA Food Tec, Koln, Germany, 2006

Great things are not done by impulse but by a series of small things brought together

Vincent van Gogh

Thank You Terima Kasih

for more information : tony_liwang@smart-tbk.com liwang@cbn.net.id