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2.0MASTER LOCATION PLAN2.1PLANT SITE LOCATION

2.1.1 Planning of Palm Oil MillBefore constructing palm oil mill, planning and selection of the propose

mill site is become very important. It is a very good approach if this

planning is made during planting stage to avoid wasting of cost forunnecessary 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.

The criteria for determining the suitability of a site for a mill are

As follows

a) Must be near to reliable water source/ water supplyb)

Relatively high and solid groundc) Located centrally within the reach of estates

d) Easy accessibilitye) Transportation of FFB to Mill Gatef) Transportation of product from the millg) Soil conditionh) Land topographyflat or undulatingi) General infrastructureMain government road/ Access

road/ water treatment cost/ telephone lines etc.

j) Regulations from Local Authority/ sensitivity of the nearbyarea/ restrictions.

2.1.2 Planning and Selection of Site

a) Propose location of the mill with respect to overall plantations areab) Area of mills building and mills compoundc) Area of effluent treatment plant, ETPd) Area of raw water storage ponde) Water sources and water intake accessf) Area for executives, staffs and workers quartersg) Roads and accessibility

2.2.2 Feasibility Study2.2.2.1The planning which includes feasibility study must be well ahead before

decision to construct oil mill is implemented. Feasibility study is normallyundertaken by an experience consultant OR engineer who posses extensiveexperience in palm oil mill design. Feasibility study will normally focus on

the followings:

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2.2.2.1.1 Supply of the raw material, i.e. FFB Projection2.2.2.1.2 Selection & Location of the site2.2.2.1.3

Capacity of Mill and economic of scale

2.2.2.1.4 Financial Implication i.e. capital investment and payback years2.2.2.1.5 Environmental Issues

2.2.3 Crop Projection2.2.3.1Sizes of plantations, planted or to be planted2.2.3.2The planting time/years2.2.3.3The time of yielding2.2.3.4The appropriate Yield

2.2.4 Planning of required Mill Capacity2.2.4.1Determining of oil mill capacity from FFB Projection.2.2.4.2Mill capacity should capable to handle peak months ffb at approximately

12.5% of the annual crop and on 25 days/month @ 20hrs/day

2.2.4.3Milling capacity is given by the basic mathematicCapacity, T = Q / (D x H)

Where;T is in Ton/Hour

Q is peak month FFB in Ton

D is number of day per monthH is the operating hours per day

Palm oil mill normally runs on two shifts or three shifts per day. There are

some mill which run on two and a half shift per day i.e. two shifts workersemployed and during peak crops the mill will run overtime to process all

the FFB. For sizing the capacity of palm oil mills, the following operating

hours can be used i.e. 8 hrs per shift or 16 hrs for two shift. For overtimeprocessing hours first shift will work extra 4 hours from their normal 8

hours working and second shift will continue to work another 4 hours

addition to their normal 8 hours work.

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Another factor that should be considered is the No of working day peryear or per month. The company used figure is 300 working days per year

or 25 days per month.

2.2.5

Location of SiteThe criteria for determining the suitability of a site for a mills are as follows

2.2.5.1Strategically located within all the ffb supplying estates.2.2.5.2Near the water sources2.2.5.3Relatively high and solid ground2.2.5.4Easy Access for raw material and final product transportation process2.2.5.5

To consider and obtaining the followings information

a) Transportation of FFB to Mill Gateb) Transportation of Product from the millc) Water source / Water supplyd) Land TopographyFlat or Undulatinge) Soil Condition from soil test reportf) General InfrastructureMain Road/Access road/water treatment

cost/Telephone lines etc.

g) Regulations from Local Authority/sensitivity of the nearby area /restrictions.

2.2.6 Capital Expenditure Projections2.2.6.1This an important aspect of a feasibility study2.2.6.2Total capital investment and operation cost over a certain period (ex: 15 years)2.2.6.3To shows profit / Internal Rate of Return/ Payback period2.2.6.4To established prospect of income from the oil mill project2.2.6.5To be prepared during feasibility study is conducted2.2.6.6To clearly indicate disbursement of such big capital expenditure and payback

period over a certain number of years

2.2.6.7To determine return on investment and at what year the project will be in thegreen

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2.2.7 Environmental IssuesThe feasibility study should also seriously look into the environment impact ofsetting up the mill project. The rationale behind this is the effects of environment

issues can last for generations as well as the human welfare as a whole. Such

issues like water, air, noise pollution are becoming more and more stringent and

recommendations to construct a mill should give more in depth considerations tothese environment issues.