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How to Start an Oil Palm Plantation – Sample Business Plan Template

By: Author Tony Martins Ajaero

Home » Business ideas » Agriculture Industry » Crop Cultivation

Are you interested in starting a palm oil plantation and you need advice on how to go about it? Do you need a sample palm oil plantation business plan template or feasibility study report ? Then i advice you read on.

LOOK!!!   There is currently a revolution going on in the agricultural industry, not only in Nigeria but all over the world. Food is an important necessity of life and the world governments cannot allow food shortage as it might lead to crisis. If there is any better time to start a business in the agriculture sector, that time is now.

Do you have an undeveloped land in a remote area, or you inherited a land that you know you will not be developing in the next ten years? Then this is the best time to turn that land into an income producing asset.

Why You Should Start a Palm Oil Plantation Today

The oil palm tree is one of the most useful trees ever known. Every part of the tree – from its fruit to its leaves and trunk, and to its sap – is used for one thing or the other. While the fruits are processed into palm oil and palm kernel oil, the fronds ( leaves ) are used for roofing houses in rural areas and camps, and the sap ( palm wine ) is a refreshing drink taken in many parts of Africa.

Palm oil is red in color and is used for domestic cooking in many countries. It is also used in the production of soaps and cosmetics, just like palm kernel oil, which is made from the same fruit. If you live in a country like Nigeria , Ghana, etc; where red palm oil is in huge demand domestically and industrially, you can make huge profits by starting an oil palm plantation. Read on to find out what you need to know and do to start an oil palm plantation.

Starting an Oil Palm Plantation – Sample Business Plan Template

Oil palm plantation simply involves cultivating oil palm trees. When it is time to harvest, you will sell your palm fruits to manufacturers, who would process the fruits to produce red palm oil. After harvesting and selling, you will wait until the next harvesting season to sell again. This can continue for decades, which means an oil palm plantation can continue to fetch you huge income for several years to come.

Requirements for Starting an Oil Palm Plantation

Though it may not sound like a business, due to the “ plantation” tag. But the truth is that, an oil palm plantation is a business, and you should regard it as such. This means starting it requires the same input factors that other business require, which are land, labor, and capital. We will now discuss each of these factors.

Since you are starting an oil palm plantation, you will definitely need a large expanse of land. This can range from few plots to hectares of land, depending on what you are able to obtain. The first important factor to consider when acquiring land for your oil palm plantation is the soil.

Is it fertile? Would it be suitable for growing oil palm trees? If you are in doubt over the quality of the soil, then have it examined by experts. This is very important, for obvious reasons. In addition, since your land will be your production factory, so to say, it must be located where buyers can easily assess it.

Although you can easily find lands with good soils for oil palm cultivation, you should choose one that is motor-able, since most of your buyers will use large vehicles to convey oil palm fruits from the farm to the sites of processing. After acquiring a piece of land, you will need to prepare it well for the plantation. It is highly recommended that you use tractors to pulverize and loosen the soil and remove hard roots in preparation for palm seeding.

Though you may not need to hire permanent staff, you will need to hire individuals to assist you with each stage involved in starting an oil palm plantation. For example, you will need to hire laborers or a tractor operator for the land clearing process. You will also need to hire laborers for the planting process. And each time you need to harvest, you will need to hire laborers to handle the task for you.

This refers to the money required to start the business. This includes the cost of acquiring land – either by buying or renting, the cost of hiring workers, the cost of maintaining the farm, and the cost of purchasing the seedlings that you will be starting with.

The Steps Involved…

Having discussed the requirements for starting an oil palm plantation, we will now look at the steps involved in starting an oil palm plantation.

  • Acquire land and prepare it for the plantation
  • Buy the seedlings that you will plant. Although you have the option of growing the seeds yourself, this takes time and you may end up with low yield seedlings. A seedling sells for N150 in Nigeria (about $1). You will need at least 1000 seedlings for a plantation of moderate size.
  • Plant the seedling on the already prepared land. Ensure that there is adequate spacing between the plants. Without adequate spacing, the roots will interfere with each other, leading to limited growth and low yield. The best spacing is 8-9 meters between any two plants.
  • Weed the farm and apply fertilizer to the plants at intervals. This interval varies with quality of the soil and the rate at which weeds grow around the plants. You will need to get an expert’s recommendation for this.

How long does it take to start harvesting?

Your first harvest will be around two years after planting your seedlings. So, if you have the capital and other requirements, now is the best time to invest into your future by starting an oil palm plantation.

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[Pdf Sample] Palm Oil Farming & Production Business Plan Docx

In the journey of palm oil production, starting from the nursery stage all the way to planting, oil extraction, processing, and eventually selling, the palm oil industry has garnered significant attention. Entrepreneurs and investors alike are increasingly drawn to this versatile and widely-used commodity.

To embark on this venture successfully, it is crucial to have a well-structured business plan that encompasses every aspect of the process. In this article, we will delve into the essential components of a business plan for palm oil production , covering everything from the initial nursery stage to the final selling process.

By understanding these key elements, you can lay a solid foundation for your palm oil production venture and maximize its potential for success.

[Pdf Sample] Business Plan Proposal  For Palm Oil Production Docx

Table of Contents

To write a business plan , here is a breakdown of how it should be structured and what should be in each category. After this instruction, I will provide you with a sample of one I wrote for my farm , let us go:

Executive Summary

The executive summary serves as an introduction to your business plan , providing a concise overview of your palm oil production venture. It should highlight the key aspects of your business, such as the mission statement, objectives, target market, competitive advantages, and financial projections.

Company Overview

In this section, provide a detailed description of your palm oil production company. Include information about its legal structure, location, history, key personnel, and any unique features or innovations that set your venture apart from competitors. Emphasize the vision and values that drive your business.

Market Analysis

Conducting a thorough market analysis is crucial to understanding the palm oil industry and identifying opportunities for growth . Assess the demand and supply dynamics of the market, analyze the competitive landscape, and identify key trends and drivers affecting the industry. Additionally, determine your target market segments and outline your marketing strategies to effectively reach and engage customers.

Production Process

Marketing and sales strategy.

Developing an effective marketing and sales strategy is crucial for positioning your palm oil brand in the market and attracting customers. Identify your target audience, outline your unique selling propositions, and describe your pricing strategy. Additionally, explore various distribution channels, such as wholesalers, retailers, and online platforms, to reach a wide customer base.

Operational Plan

Financial projections.

Provide comprehensive financial projections for your palm oil production business. This section should include income statements, balance sheets, and cash flow forecasts. Highlight the initial investment required, expected revenue streams, production costs, and operating expenses. Conduct a break-even analysis and assess the profitability and return on investment potential of your venture.

Risk Assessment and Mitigation

Identify potential risks and challenges that could impact the success of your palm oil production business. Assess market risks, such as price fluctuations and changes in consumer preferences, as well as operational risks, such as equipment breakdowns or supply chain disruptions. Develop strategies to mitigate these risks and outline contingency plans to ensure business continuity.

What are the main components of a business plan for palm oil production?

A business plan for palm oil production typically includes an executive summary, company overview, market analysis, production process, marketing and sales strategy, operational plan, financial projections, and risk assessment.

How can I identify my target market in the palm oil industry?

What certifications are important for sustainable palm oil production.

Certifications such as Roundtable on Sustainable Palm Oil (RSPO) and International Sustainability & Carbon Certification (ISCC) are important for sustainable palm oil production. They demonstrate your commitment to environmental and social responsibility.

How can I mitigate risks in palm oil production?

Where can i find more information about starting a palm oil production venture.

In conclusion, a well-crafted business plan is essential for anyone looking to establish a successful palm oil production venture. It provides a roadmap for your business, ensuring that you have a clear vision, defined strategies, and a thorough understanding of the market and operational requirements. By incorporating sustainable practices, embracing innovation, and addressing potential risks, you can position your palm oil production business for long-term growth and profitability .

Author: Adewebs

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Palm Oil Production Business Plan: How to Setup for Good Profits

Table of contents, what is palm oil, need for palm oil, why start a palm oil production business, setting up a palm oil plantation, process of palm oil production, harvesting process, how to start a palm oil production business, palm oil production business plan template, marketing and sales strategy, financial plan.

The palm oil production business plan is a comprehensive guide that covers all aspects of starting a palm oil production business. This includes the feasibility study, market research, financial projections, and more. The palm oil production business plan is a valuable resource for entrepreneurs who want to enter the palm oil industry.

Palm Oil Production Business Plan

It provides important information on the market, competition, and strategies for success. This business plan will help you make informed decisions about starting a palm oil production business. It is essential reading for anyone considering this type of venture.

Palm oil production business plan

It is an edible vegetable oil derived from the fruit of the oil palm tree. It is the world’s most widely produced edible oil and is used in various food products, cosmetics, and biofuels. However, palm oil production is a complex and capital-intensive process requiring significant land, labor, and infrastructure investment. Therefore, a palm oil production business plan must consider these factors to succeed.

The first step in starting a palm oil production business is to acquire the necessary land and infrastructure. This can be done by leasing, purchasing existing plantations, or by developing new plantations. The next step is to hire the labor force to operate the plantation and process the palm fruit into crude palm oil (CPO). Finally, the CPO must be refined into finished products such as cooking oil, biodiesel, or other end uses.

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Palm Oil Production

A successful palm oil production business plan will consider these costs and factor them into a comprehensive financial model. The model should include detailed assumptions about yield, operating costs, capital costs, selling prices, and other relevant factors. With this information, investors can make informed decisions about whether or not to proceed with a particular palm oil production project.

As the population continues to grow across the globe, so does the demand for food. To meet this demand, farmers are increasingly turning to palm oil as a source of vegetable oil. Palm oil is a type of edible (cooking) oil extracted from the fruit of the African oil palm tree. It is high in saturated fats and has several uses, including cooking, cosmetics, and biofuel. The demand for palm oil has grown significantly in recent years as it is seen as a more efficient and sustainable option than other vegetable oils.

It takes less land to produce palm oil than other oils, such as soybean or rapeseed oil, making it more environmentally friendly. In addition, palm oil can be produced with little or no water, making it ideal for countries that experience water shortages. However, palm oil production has come at a cost to the environment. Clearing rainforests for palm plantations has contributed to deforestation and climate change.

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Palm Harvest

In addition, pesticides and fertilizers on these plantations can pollute rivers and groundwater. There are also concerns about the working conditions on some plantations, where workers may be exposed to hazardous chemicals or forced to work long hours for low wages. Despite these concerns, palm oil remains an essential part of the global economy and will likely continue to play a role in meeting the world’s growing demand for food.

There are many reasons to start a palm oil production business. Palm oil is versatile and healthy oil used in various products. It is also a sustainable source of income for smallholder farmers and can help improve rural communities’ livelihoods. Starting a palm oil business can be a viable and profitable venture for entrepreneurs looking to make a difference in the world.

Palm oil production can help create jobs, provide economic opportunities in rural areas, and contribute to developing more sustainable supply chains. In addition, palm oil businesses can promote best practices in palm oil production and sustainability, which can help protect this important natural resource.

A palm oil plantation is a large farm that produces palm oil. This palm oil is a vegetable oil extracted from palm trees’ fruits. It is used in cooking and also as a biofuel. To set up a palm oil plantation, you must acquire land, obtain financing, plant trees, and hire workers. The process can take several years and requires significant investment. But once operational, a palm oil plantation can be a profitable enterprise.

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Palm Oil Fruit

The process of palm oil production is a long and complicated one. It begins with the harvesting of fruit from palm trees. The fruit is then transported to a mill, where it is crushed, and the oil is extracted. The extracted oil is then transported to a refinery and refined into palm oil. The refined palm oil is then transported to a fractionation plant and fractionated into various oil grades. The different grades of palm oil are then transported to buyers who use them for various purposes. Palm oil is used in different products, including cosmetics, soaps, detergents, and margarine.

The harvesting process of palm oil production is a complex and labor-intensive operation. It involves using large machines to extract the oil from the palm fruits and a great deal of manual labor. The process begins with the collection of ripe palm fruits from the trees. These fruits are then transported to the mill, where they are crushed and pressurized to extract the oil.

After the palm oil has been extracted, it is refined and processed into various products. These products are then shipped to customers around the world. The entire process of palm oil production is quite complex and requires a great deal of planning and coordination.

If you are looking to start a palm oil production business, there are a couple of things you need to know. First, palm oil is a type of vegetable oil derived from the fruit of the oil palm tree. It is used in various products, including food, cosmetics, and biodiesel fuel. The first and foremost thing you need to do when starting a palm oil production business is to create a business plan. This will help determine the costs and benefits of starting your own business.

You will also need to find a suitable location for your business. Living in an area with many palm trees will be easier than living without them. Once you have your business plan and location, you must purchase the necessary equipment. This includes an oil press, extraction machine, and refining machine. You will also need to buy palm fruits from farmers or suppliers. Once you have your equipment and raw materials, you can produce palm oil.

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Palm Fruits

The fruit must first be harvested from the trees to produce palm oil. This is done by hand or with the use of machines. The next step is extracting the fruit oil using an extraction machine. After the oil has been extracted, it has to go through refining process before it can be used in products or sold as fuel. 

If you’re looking to start a palm oil production business, you’ll need a comprehensive business plan. Luckily, we’ve got a template that will help you get started. This palm oil production business plan template includes an executive summary, company overview, market analysis, financial projections, and more.

With this template, you can quickly and easily develop a professional business plan for your new venture. To start your palm oil production business plan, download the template and fill in the necessary information. Once you’re finished, you’ll have a professional document to help secure funding and get your business off the ground.

The marketing and sales strategy for a palm oil production business plan should include a detailed analysis of the target market, the competition, and the company’s strengths and weaknesses. The plan should also include a sales forecast, a marketing budget, and a timeline for implementing the marketing and sales strategy.

A well-written business plan for a palm oil production company should include a detailed financial plan. This financial plan should include a section on the company’s current financial situation and future income and expenses projections. The financial plan should start with a brief overview of the company’s current financial situation.

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Palm Oil

This overview should include the company’s revenue, expenses, and cash flow. It should also discuss the company’s existing debts and assets. Next, the financial plan should provide projections for the company’s future income and expenses. These projections should be based on realistic assumptions about the future palm oil market and its costs.

The projections should show how much money the company will likely make or lose over the next few years. Finally, the financial plan should include a discussion of the risks that could affect the company’s ability to meet its financial goals. These risks could include changes in palm oil prices, unexpected increases in production costs, or delays in getting new palm oil plantations up and running.

A palm oil production business can be a very lucrative venture. With the right business plan in place, you can reap the benefits of this highly profitable industry. However, it is essential to research and develop a solid plan before getting started. This will help you avoid potential pitfalls and ensure your business is booming.

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How to write a business plan for a palm oil producer?

palm oil producer business plan

Putting together a business plan for a palm oil producer can be daunting - especially if you're creating a business for the first time - but with this comprehensive guide, you'll have the necessary tools to do it confidently.

We will explore why writing one is so important in both starting up and growing an existing palm oil producer, as well as what should go into making an effective plan - from its structure to content - and what tools can be used to streamline the process and avoid errors.

Without further ado, let us begin!

In this guide:

Why write a business plan for a palm oil producer?

  • What information is needed to create a business plan for a palm oil producer?
  • How do I build a financial forecast for a palm oil producer?

The written part of a palm oil producer business plan

  • What tool should I use to write my palm oil producer business plan?

Having a clear understanding of why you want to write a business plan for your palm oil producer will make it simpler for you to grasp the rationale behind its structure and content. So before delving into the plan's actual details, let's take a moment to remind ourselves of the primary reasons why you'd want to create a palm oil producer business plan.

To have a clear roadmap to grow the business

It's rarely business as usual for small businesses. The economy follows cycles where years of growth are followed by recessions, and the business environment is always changing with new technologies, new regulations, new competitors, and new consumer behaviours appearing all the time...

In this context, running a business without a clear roadmap is like driving blindfolded: it's dangerous at best. That's why writing a business plan for a palm oil producer is essential to create successful and sustainable businesses.

To write an effective business plan, you will need to take stock of where you are (if you are already in business) and where you want the business to go in the next three to five years.

Once you know where you want your palm oil producer to be, you'll have to identify:

  • what resources (human, equipment, and capital) are needed to get there,
  • at what pace the business needs to progress to get there in time,
  • and what risks you'll face along the way.

Going through this process regularly is beneficial, both for startups and existing companies, as it helps make informed decisions about how best to allocate resources to ensure the long-term success of the business.

To maintain visibility on future cash flows

Businesses can go for years without making a profit, but they go bust as soon as they run out of cash. That's why "cash is king", and maintaining visibility on your palm oil producer's future cash flows is critical.

How do I do that? That's simple: you need an up-to-date financial forecast.

The good news is that your palm oil producer business plan already contains a financial forecast (more on that later in this guide), so all you have to do is to keep it up-to-date.

To do this, you need to regularly compare the actual financial performance of your business to what was planned in your financial forecast, and adjust the forecast based on the current trajectory of your business.

Monitoring your palm oil producer's financial health will enable you to identify potential financial problems (such as an unexpected cash shortfall) early and to put in place corrective measures. It will also allow you to detect and capitalize on potential growth opportunities (higher demand from a given segment of customers for example).

To secure financing

Whether you are a startup or an existing business, writing a detailed palm oil producer business plan is essential when seeking financing from banks or investors.

This makes sense given what we've just seen: financiers want to ensure you have a clear roadmap and visibility on your future cash flows.

Banks will use the information included in the plan to assess your borrowing capacity (how much debt your business can support) and your ability to repay the loan before deciding whether they will extend credit to your business and on what terms.

Similarly, investors will review your plan carefully to assess if their investment can generate an attractive return on investment.

To do so, they will be looking for evidence that your palm oil producer has the potential for healthy growth, profitability, and cash flow generation over time.

Now that you understand why it is important to create a business plan for a palm oil producer, let's take a look at what information is needed to create one.

Information needed to create a business plan for a palm oil producer

You need the right data in order to project sales, investments and costs accurately in the financial forecast of your palm oil producer business plan.

Below, we'll cover three key pieces of information you should gather before drafting your business plan.

Carrying out market research for a palm oil producer

Before you begin writing your business plan for a palm oil producer, conducting market research is a critical step in ensuring precise and realistic financial projections.

Market research grants you valuable insights into your target customer base, competitors, pricing strategies, and other crucial factors that can impact the success of your business.

In the course of this research, you may stumble upon trends that could impact your palm oil producer.

Your market research may reveal that there could be an increasing demand for certified organic palm oil products. Additionally, it could also reveal that there might be a trend of customers preferring sustainably-sourced palm oil products.

Such market trends play a pivotal role in revenue forecasting, as they provide essential data regarding potential customers' spending habits and preferences.

By integrating these findings into your financial projections, you can provide investors with more accurate information, enabling them to make well-informed decisions about investing in your palm oil producer.

Developing the marketing plan for a palm oil producer

Before delving into your palm oil producer business plan, it's imperative to budget for sales and marketing expenses.

To achieve this, a comprehensive sales and marketing plan is essential. This plan should provide an accurate projection of the necessary actions to acquire and retain customers.

Additionally, it will outline the required workforce to carry out these initiatives and the corresponding budget for promotions, advertising, and other marketing endeavours.

By budgeting accordingly, you can ensure that the right resources are allocated to these vital activities, aligning them with the sales and growth objectives outlined in your business plan.

The staffing and equipment needs of a palm oil producer

As you embark on starting or expanding your palm oil producer, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is essential for ensuring your business's success.

Both the recruitment and investment plans must align with the timing and level of growth projected in your forecast, and they require appropriate funding.

A palm oil producer might incur staffing costs such as salaries for agricultural workers, supervisors, and administrative staff. Additionally, they might incur equipment costs such as tractors, harvesters, and other heavy machinery needed to plant, maintain, and harvest the palm oil. They might also need to purchase pesticides, fertilizers, and other farm supplies to ensure optimal production.

To create a realistic financial forecast, you also need to consider other operating expenses associated with the day-to-day running of your business, such as insurance and bookkeeping.

With all the necessary information at hand, you are ready to begin crafting your business plan and developing your financial forecast.

What goes into your palm oil producer's financial forecast?

The objective of the financial forecast of your palm oil producer's business plan is to show the growth, profitability, funding requirements, and cash generation potential of your business over the next 3 to 5 years.

The four key outputs of a financial forecast for a palm oil producer are:

  • The profit and loss (P&L) statement ,
  • The projected balance sheet ,
  • The cash flow forecast ,
  • And the sources and uses table .

Let's look at each of these in a bit more detail.

The projected P&L statement

The projected P&L statement for a palm oil producer shows how much revenue and profits your business is expected to generate in the future.

projected profit and loss statement example in a palm oil producer business plan

Ideally, your palm oil producer's P&L statement should show:

  • Healthy growth - above inflation level
  • Improving or stable profit margins
  • Positive net profit

Expectations will vary based on the stage of your business. A startup will be expected to grow faster than an established palm oil producer. And similarly, an established company should showcase a higher level of profitability than a new venture.

The projected balance sheet of your palm oil producer

The balance sheet for a palm oil producer is a financial document that provides a snapshot of your business’s financial health at a given point in time.

It shows three main components: assets, liabilities and equity:

  • Assets: are resources owned by the business, such as cash, equipment, and accounts receivable (money owed by clients).
  • Liabilities: are debts owed to creditors and other entities, such as accounts payable (money owed to suppliers) and loans.
  • Equity: includes the sums invested by the shareholders or business owners and the cumulative profits and losses of the business to date (called retained earnings). It is a proxy for the value of the owner's stake in the business.

example of projected balance sheet in a palm oil producer business plan

Examining the balance sheet is important for lenders, investors, or other stakeholders who are interested in assessing your palm oil producer's liquidity and solvency:

  • Liquidity: assesses whether or not your business has sufficient cash and short-term assets to honour its liabilities due over the next 12 months. It is a short-term focus.
  • Solvency: assesses whether or not your business has the capacity to repay its debt over the medium-term.

Looking at the balance sheet can also provide insights into your palm oil producer's investment and financing policies.

In particular, stakeholders can compare the value of equity to the value of the outstanding financial debt to assess how the business is funded and what level of financial risk has been taken by the owners (financial debt is riskier because it has to be repaid, while equity doesn't need to be repaid).

The projected cash flow statement

A cash flow forecast for a palm oil producer shows how much cash the business is projected to generate or consume.

example of cash flow forecast in a palm oil producer business plan

The cash flow statement is divided into 3 main areas:

  • The operating cash flow shows how much cash is generated or consumed by the operations (running the business)
  • The investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.)
  • The financing cash flow shows how much cash is raised or distributed to investors and lenders

Looking at the cash flow forecast helps you to ensure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.

It is also a best practice to include a monthly cash flow statement in the appendices of your palm oil producer business plan so that the readers can view the impact of seasonality on your business cash position and generation.

The initial financing plan

The initial financing plan, also known as a sources and uses table, is a valuable resource to have in your business plan when starting your palm oil producer as it reveals the origins of the money needed to establish the business (sources) and how it will be allocated (uses).

palm oil producer business plan: sources & uses example

Having this table helps show what costs are involved in setting up your palm oil producer, how risks are shared between founders, investors and lenders, and what the starting cash position will be. This cash position needs to be sufficient to sustain operations until the business reaches a break-even point.

Now that you have a clear understanding of what goes into the financial forecast of your palm oil producer business plan, let's shift our focus to the written part of the plan.

The written part of a palm oil producer business plan is composed of 7 main sections:

  • The executive summary
  • The presentation of the company
  • The products and services
  • The market analysis
  • The strategy
  • The operations
  • The financial plan

Throughout these sections, you will seek to provide the reader with the details and context needed for them to form a view on whether or not your business plan is achievable and your forecast a realistic possibility.

Let's go through the content of each section in more detail!

1. The executive summary

The executive summary, the first section of your palm oil producer's business plan, serves as an inviting snapshot of your entire plan, leaving readers eager to know more about your business.

To compose an effective executive summary, start with a concise introduction of your business, covering its name, concept, location, history, and unique aspects. Share insights about the services or products you intend to offer and your target customer base.

Subsequently, provide an overview of your palm oil producer's addressable market, highlighting current trends and potential growth opportunities.

Then, present a summary of critical financial figures, such as projected revenues, profits, and cash flows.

You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.

Lastly, address any funding needs in the "ask" section of your executive summary.

2. The presentation of the company

As you build your palm oil producer business plan, the second section deserves attention as it delves into the structure and ownership, location, and management team of your company.

In the structure and ownership part, you'll provide valuable insights into the legal structure of the business, the identities of the owners, and their respective investments and ownership stakes. This level of transparency is vital, particularly if you're seeking financing, as it clarifies which legal entity will receive the funds and who holds the reins of the business.

Moving to the location part, you'll offer a comprehensive view of the company's premises and articulate why this specific location is strategic for the business, emphasizing factors like catchment area, accessibility, and nearby amenities.

When describing the location of your palm oil producer, you could emphasize its access to key markets and transportation networks. It may be located in a region with abundant resources, such as water, land, and labor, that could enable efficient production. You could also highlight the potential for long-term growth in the area, and explain that the location could provide a secure and stable investment for the financier.

Lastly, you should introduce your esteemed management team. Provide a thorough explanation of each member's role, background, and extensive experience.

It's equally important to highlight any past successes the management team has achieved and underscore the duration they've been working together. This information will instil trust in potential lenders or investors, showcasing the strength and expertise of your leadership team and their ability to deliver the business plan.

3. The products and services section

The products and services section of your palm oil producer business plan should include a detailed description of what your company sells to its customers. 

For example, your palm oil producer might offer clients a range of products such as palm oil, palm kernel oil, and fractionated palm oil. These products would be of the highest quality and could be supplied in different formats, including bulk, packaged, or refined. Additionally, customers can benefit from related services such as oilseed processing, storage, and transportation. These services are designed to help customers save time and resources, while ensuring a consistent supply of palm oil.

The reader will want to understand what makes your palm oil producer unique from other businesses in this competitive market.

When drafting this section, you should be precise about the categories of products or services you sell, the clients you are targeting and the channels that you are targeting them through. 

4. The market analysis

When outlining your market analysis in the palm oil producer business plan, it's essential to include comprehensive details about customers' demographics and segmentation, target market, competition, barriers to entry, and relevant regulations.

The primary aim of this section is to give the reader an understanding of the market size and appeal while demonstrating your expertise in the industry.

To begin, delve into the demographics and segmentation subsection, providing an overview of the addressable market for your palm oil producer, key marketplace trends, and introducing various customer segments and their preferences in terms of purchasing habits and budgets.

Next, shift your focus to the target market subsection, where you can zoom in on the specific customer segments your palm oil producer targets. Explain how your products and services are tailored to meet the unique needs of these customers.

For example, your target market might include households that prioritize buying organic or locally-sourced food products. They are likely to be willing to pay higher prices for palm oil if they know it is sustainable and ethically-sourced. They also likely have a greater appreciation for the health benefits of using palm oil in their cooking.

In the competition subsection, introduce your main competitors and explain what sets your palm oil producer apart from them.

Finally, round off your market analysis by providing an overview of the main regulations that apply to your palm oil producer.

5. The strategy section

When crafting the strategy section of your business plan for your palm oil producer, it's important to cover several key aspects, including your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

In the competitive edge subsection, clearly explain what sets your company apart from competitors. This is particularly critical if you're a startup, as you'll be trying to establish your presence in the marketplace among entrenched players.

The pricing strategy subsection should demonstrate how you aim to maintain profitability while offering competitive prices to your customers.

For the sales & marketing plan, outline how you plan to reach and acquire new customers, as well as retain existing ones through loyalty programs or special offers.

In the milestones subsection, detail what your company has achieved thus far and outline your primary objectives for the coming years by including specific dates for expected progress. This ensures everyone involved has clear expectations.

Lastly, in the risks and mitigants subsection, list the main risks that could potentially impact the execution of your plan. Explain the measures you've taken to minimize these risks. This is vital for investors or lenders to feel confident in supporting your venture - try to proactively address any objection they might have.

Your palm oil producer could face the risk of changing market demand, as consumer preferences may shift over time. This could lead to a decrease in the price of palm oil, which could in turn have a negative effect on the business. Additionally, the producer could be exposed to the risk of natural disasters such as floods or droughts, which could damage crops and disrupt production. Such events could potentially lead to financial loss and even impact the long-term sustainability of the business.

6. The operations section

In your business plan, it's also essential to provide a detailed overview of the operations of your palm oil producer.

Start by covering your team, highlighting key roles and your recruitment plan to support the expected growth. Outline the qualifications and experience required for each role and your intended recruitment methods, whether through job boards, referrals, or headhunters.

Next, clearly state your palm oil producer's operating hours, allowing the reader to assess staffing levels adequately. Additionally, mention any plans for varying opening times during peak seasons and how you'll handle customer queries outside normal operating hours.

Then, shift your focus to the key assets and intellectual property (IP) necessary for your business. If you rely on licenses, trademarks, physical structures like equipment or property, or lease agreements, make sure to include them in this section.

You may have key assets such as land used for palm oil production, or physical equipment used in the production process. Additionally, you could have intellectual property such as proprietary knowledge about the production process, or a trademarked brand name associated with your palm oil production. These assets and IP may be essential to the success of your business and should be protected accordingly.

Lastly, include a list of suppliers you plan to work with, detailing their services and main commercial terms, such as price, payment terms, and contract duration. Investors are interested in understanding why you've chosen specific suppliers, which may be due to higher-quality products or established relationships from previous ventures.

7. The presentation of the financial plan

The financial plan section is where we will include the financial forecast we talked about earlier in this guide.

Now that you have a clear idea of the content of a palm oil producer business plan, let's look at some of the tools you can use to create yours.

What tool should I use to write my palm oil producer's business plan?

In this section, we will be reviewing the two main options for writing a palm oil producer business plan efficiently:

  • Using specialized software,
  • Outsourcing the drafting to the business plan writer.

Using an online business plan software for your palm oil producer's business plan

The modern and most efficient way to write a palm oil producer business plan is to use business plan software .

There are several advantages to using specialized software:

  • You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
  • You are guided through the writing process by detailed instructions and examples for each part of the plan
  • You can access a library of dozens of complete business plan samples and templates for inspiration
  • You get a professional business plan, formatted and ready to be sent to your bank or investors
  • You can easily track your actual financial performance against your financial forecast
  • You can create scenarios to stress test your forecast's main assumptions
  • You can easily update your forecast as time goes by to maintain visibility on future cash flows
  • You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

Hiring a business plan writer to write your palm oil producer's business plan

Outsourcing your palm oil producer business plan to a business plan writer can also be a viable option.

Business plan writers are experienced in writing business plans and adept at creating financial forecasts without errors. Furthermore, hiring a consultant can save you time and allow you to focus on the day-to-day operations of your business.

However, hiring business plan writers is expensive as you are paying for the software used by the consultant, plus their time, and their profit margin of course.

From experience, you need to budget at least £1.5k ($2.0k) excluding tax for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders or investors).

You also need to be careful when seeking investment. Investors want their money to be used to grow the business, not spent on consulting fees. Therefore, the amount you spend on business plan writing services (and other consulting services such as legal services) needs to be negligible relative to the amount raised.

The other drawback is that you usually don't own the business plan itself: you just get the output, while the actual document is saved in the consultant's business plan software - which makes it difficult to maintain the document up to date without hiring the consultant on a retainer.

For these reasons, outsourcing the palm oil producer business plan to a business plan writer should be considered carefully, weighing both the advantages and disadvantages of hiring outside help.

Ultimately, it may be the right decision for some businesses, while others may find it beneficial to write their business plan using online software.

Why not create your palm oil producer's business plan using Word or Excel?

Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write a palm oil producer business plan is a terrible idea.

For starters, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.

As a result, it is unlikely anyone will trust your numbers unless - like us at The Business Plan Shop - you hold a degree in finance and accounting and have significant financial modelling experience in your past.

The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Also, using software makes it easy to compare actuals vs. forecasts and maintain our forecasts up to date to maintain visibility on future cash flows - as we discussed earlier in this guide - whereas this is a pain to do with a spreadsheet.

That's for the forecast, but what about the written part of my palm oil producer business plan?

This part is less error-prone, but here also software brings tremendous gains in productivity:

  • Word processors don't include instructions and examples for each part of your business plan
  • Word processors don't update your numbers automatically when they change in your forecast
  • Word processors don't handle the formatting for you

Overall, while Word or Excel may be viable options for creating a palm oil producer business plan for some entrepreneurs, it is by far not the best or most efficient solution.

  • Having an up-to-date business plan is key to maintaining visibility on your future cash flows.
  • A business plan has 2 parts: a financial forecast highlighting the expected growth, profitability and cash generation of the business; and a written part which provides the context needed to interpret and assess the quality of the forecast.
  • Using business plan software is the modern way of writing and maintaining business plans.

We hope that this guide helped you to better understand how to write the business plan for a palm oil producer. If you still have questions, do not hesitate to contact us.

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Know someone who owns or wants to start a palm oil producer? Share this article with them!

Guillaume Le Brouster

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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oil palm plantation business plan

Strategies For Palm Oil Production Business Success

Welcome to our Palm Oil Production Business column. Here, we will provide you with a complete guide to starting your own palm oil business, covering all aspects from palm oil industry market overview to investment return, as well as palm oil mill business plan, palm oil production factory and process design, and palm oil processing equipment selection. 

Want to know more about the palm oil production industry? Check out our related articles for more information now!

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The Booming Palm Oil Production Market Palm oil is a crucial ingredient in many of the products we use daily, from food to cosmetics. The palm oil industry has a bright future, with a projected compound annual growth rate of 5.3% from 2021 to 2026. Investing in a palm oil production business can yield high returns, with an average profit margin of 30%. As the demand for palm oil continues to increase, starting your own palm oil milling business is a lucrative opportunity to tap into this growing market.

Essential Factors Before Palm Oil Business Starting: Making Informed Investments

Investing in a palm oil production business can be a lucrative opportunity, given the global demand for palm oil as a versatile commodity. However, it's important to consider several key factors before making an investment decision. 

By carefully considering these key factors, you can make informed decisions and increase your chances of success when investing in your palm oil mill business.

  • Market analysis:  In-depth study of the supply and demand dynamics of palm oil in the target market. Understand factors such as consumption patterns, market trends and potential risks.
  • Factory site selection:  Consider factors suc​h as proximity to palm plantations, infrastructure, labor availability and market access.
  • Business plan and strategy:  The palm oil business plan should cover areas such as land acquisition, palm oil press machine, palm oil production plant capacity, supply chain management and marketing strategy.
  • Licensing and regulations:  Ensure compliance with environmental regulations, health and safety standards and land use regulations.
  • Technology and equipment:  Invest in modern and efficient palm oil milling equipment to maximize productivity and minimize waste. 
  • Financial Management: Analyze the financi​al aspects of the business, including initial investment costs, operating expenses, revenue streams, profitability and cash flow.

how to start your own production line with best business plan

ABC Machinery- Your One-Stop Engineering and Construction Partner

At ABC Machinery , we specialize in providing one-stop engineering and construction services for palm oil production businesses. With over 20 years of experience, we offer customized solutions tailored to your specific needs, from feasibility studies to equipment installation and maintenance.

With ABC Machinery as your partner, you can benefit from our extensive experience, expertise, and high-quality palm oil processing equipment and services to ensure the success of your palm oil mill business. If you are interested in setting up a palm oil processing plant, please do not hesitate to contact us for professional advice and technical support!

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  • - Small Palm Oil Press
  • - 1-10 ton/day Mini Palm Oil Mill
  • - 1-20 ton/day Small Palm Oil Mill
  • - Small Palm Oil Refining Machine
  • - fruit reception system
  • - sterilizing system
  • - threshing system
  • - digesting system
  • - pressing system
  • - crude palm oil clarification system
  • - bulk oil storage system
  • - palm kernel recovery plant
  • - screw oil pressing plant
  • - solvent extraction plant
  • - Degumming Process
  • - Deacidification Process
  • - Bleaching Process
  • - Deodorization Process

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BUSINESSPLANFOR

How to start an oil palm plantation business tips guide.

A revolution in the agricultural industry is now taking place, not only in Nigeria but all over the world. Food is a major necessity of life and the governments of the world cannot afford food shortages as this could lead to a crisis. If there is a better time to start a business in the agricultural sector, that time is now.

Do you have undeveloped land in a remote area, or have you inherited land that you know you will not develop in the next ten years? Then this is the best time to turn that land into an income-producing asset.

Why you should start a palm oil plantation today

The oil palm is one of the most useful trees ever known. Every part of the tree -from its fruit to its leaves and trunk, to its sap- is used for one thing or another. While the fruits are transformed into palm oil and palm kernel oil, the leaves are used to roof houses in rural areas and camps, and the sap (palm wine) is a refreshing drink that is drunk in many parts of Africa.

Palm oil is red in color and is used for domestic cooking in many countries. It is also used in the production of soaps and cosmetics, as is palm kernel oil, which is made from the same fruit.

If you live in a country like Nigeria, Ghana, etc., where the demand for red palm oil is huge, both nationally and industrially, you can get great benefits by starting an oil palm plantation. Read on to find out what you need to know and do to start an oil palm plantation.

Starting a Palm Oil Plantation Business

The planting of oil palms simply involves the cultivation of oil palms. When the time comes to harvest, you will sell your palm fruits to manufacturers, who will process the fruits to produce red palm oil. After the harvest and sale, you will wait until the next harvest season to sell again. This can go on for decades, which means that an oil palm plantation can continue to earn huge revenues for several years.

What are the requirements to start an oil palm plantation?

Although it may not sound like a business, due to the label “plantation” . But the truth is, an oil palm plantation is a business, and you should consider it as such. This means that starting it requires the same input factors that other businesses require, which are land, labor and capital. We will now discuss each of these factors.

Since you are starting an oil palm plantation, you will definitely need a large area of land. This can vary from a few plots to hectares of land, depending on what can be obtained.

The first important factor to consider when acquiring land for your oil palm plantation is the soil. Is it fertile? Would it be suitable for oil palm cultivation? If you have doubts about the quality of the soil, have it examined by experts. This is very important, for obvious reasons.

Also, since your land will be your production factory, so to speak, it must be located where buyers can easily evaluate it. Although you can easily find land with good soils for oil palm cultivation, you should choose one that is motorized, since most of your buyers will use large vehicles to transport the oil palm fruit from the farm to the processing sites.

After acquiring a piece of land, you will need to prepare it well for planting. The use of tractors to spray and loosen the soil and remove the hard roots in preparation for the planting of palms is strongly recommended.

Although you may not need to hire permanent staff, you will need to hire people to help you in each stage of the process of starting an oil palm plantation. For example, you will need to hire workers or a tractor operator for the clearing process. You will also need to hire workers for the planting process. And every time you need to harvest, you will need to hire workers to take care of the task for you.

3. Capitalization

This refers to the money required to start the business. This includes the cost of acquiring land – whether buying or renting, the cost of hiring workers, the cost of maintaining the farm, and the cost of buying the seedlings you will start with.

After having discussed the requirements to start an oil palm plantation, we will now look at the steps necessary to start an oil palm plantation.

  • Acquiring land and preparing it for planting
  • Buy the seedlings you are going to plant. Although you have the option of growing the seeds yourself, this takes time and can result in low yielding seedlings. One seedling sells for N150 in Nigeria (about $1). You will need at least 1000 seedlings for a moderate sized plantation.
  • Plant the seedlings in the already prepared soil. Make sure that there is adequate space between the plants. Without adequate spacing, the roots interfere with each other, leading to limited growth and low yield. The best spacing is 8-9 meters between any two plants.
  • Weed the farm and apply fertilizer to the plants at intervals. This interval varies with the quality of the soil and the speed at which the weeds grow around the plants. You will need to get an expert’s recommendation for this.

How long does it take to start harvesting?

Your first harvest will be about two years after planting your seedlings. Therefore, if you have the capital and other requirements, now is the best time to invest in your future by starting an oil palm plantation.

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OIL PALM PLANTATION BUSINESS PLAN IN NIGERIA

OIL PALM PLANTATION BUSINESS PLAN has other elements such as palm oil distribution, and oil mill business plan. Then, there are others like feasibility study on palm oil production, and how to start a palm oil production business.  Whichever one you desire, this is a template adaptable for it. However, where professional attentions are needed, don’t hesitate to contact us. This is an Oil Palm Plantation Business Plan for Nigerians.

Furthermore, this is sample of Oil Palm Plantation Business Plan in Nigeria. It contains all it takes for Grant Applications and Bank Loans. In fact it’s structured as Management Road Map and concept note. In addition, it’s excellent for Proposal writing and Competitions analysis etc. In general, the feasibility segment gives you the projections for the business prospects. Oil Palm Plantation business is a lucrative business that requires strategic planning to begin. In fact, you will require professionals from CESSUMMIT for coaching, mentorship and Business Plan Implementation, from time to time, to get it right. We advise you get them involved from the onset.

Let’s go on now to the illustration part.

  • 1 OIL PALM PLANTATION BUSINESS PLAN IN NIGERIA – EXECUTIVE SUMMARY
  • 2 Our Objective:
  • 3 Our Goal:
  • 4 Our Vision:
  • 5 The Mission:
  • 6 OIL PALM PLANTATION BUSINESS PLAN IN NIGERIA – Our Products:
  • 7 OWNERSHIP PROFILE
  • 8 Management Team:
  • 9 OIL PALM PLANTATION BUSINESS PLAN IN NIGERIA – Competitor Analysis:
  • 10 What we brought into the Industry:
  • 11 OIL PALM PLANTATION BUSINESS PLAN IN NIGERIA – THE INDUSTRY
  • 12 The Bi-Product:
  • 13 Conclusion:
  • 14 READ ALSO:
  • 15 CALL FOR COMPLETE PACKAGE
  • 16 CESSUMMIT:
  • 17 Share this:
  • 18 Like this:

OIL PALM PLANTATION BUSINESS PLAN IN NIGERIA – EXECUTIVE SUMMARY

Furthermore, this Oil Palm Business plan is for Complete Palm Plantation. It is located at No. 15 Forest Street, Area 10, Ogoja, Cross River State, Nigeria.

As a matter of fact, Complete Palm Plantation is a start-up Palm Plantation that is involved in planting, nurturing, growing, harvesting and  production of quality and affordable oil palm products. These are red oil, palm kernel, and other associated palm oils, and other by-products targeting consumers in Nigeria’s Niger Delta. In fact, our products re hygienic, rich in vitamins and of super quality. Our products meet both NAFDAC, SON’s and international standard.

Our Objective:

The business has the following objectives:

  • To plant and grow the most efficient yielding palm trees in the first year.
  • Nurture to maturity 500 palm trees in the next 6 years.
  • Harvest in the most efficient way the ripped fruits.
  • To process to achieve the sales growth targets from the 7 th year.
  • Pursue aggressive gains in market share and average monthly revenue in the years ahead – with 20% annual growth in turnover.
  • Pursue aggressive marketing strategies.
  • Install efficient milling plant with 5 ton daily capacity
  • Increase the number of institutions and corporate bodies who book our products
  • Expand local demand for our processing plant
  • To achieve steady net profit in the years of operation. With 20% turnover growth per year.
  • Install management capacity capable of  curtailing costs and meeting sales targets,
  • And, to provide quality sales service and products at fair and best possible prices

 For the Oil Palm Plantation, our goal is to be the leading oil Palm product producer in our target market environs.

Our Vision:

 In addition, our vision is to provide a one-stop location for accessing excellent and high quality Oil Palm products in a desirable and conducive environment while offering products at fair and best possible prices.

The Mission:

Furthermore, the Mission for Modern Poultry Business Plan in Nigeria to exceed the customers’ expectations by providing high quality products and exceptional customer care services in a caring and loving way.

OIL PALM PLANTATION BUSINESS PLAN IN NIGERIA – Our Products:

Our products and services are –

  • High quality Oil Palm products
  • High vitamins and hygienic cooking oil
  • Produce and package delivery services
  • Supper Customer Care Services
  • Fair  prices
  • Consultancy Services

OWNERSHIP PROFILE

Okon Imam is the Sole Proprietor, He holds B. SC. in agricultural sciences from University of Johannesburg South Africa, 2009. He has over 17 years of industry experience.

Management Team:

Okon Imam – Holds B. SC. in agricultural sciences from University of Johannesburg South Africa, 2009. He has over 17 years of industry experience. He is our Project Management and Certified Business Consultant. He will be in-charge of our daily business activities. 

Mrs. Ngozi Ngozi – (B.SC Economics) – has over 25 years industry experience. These include experiences in business management, banking operations and business start-up dynamics. As a retired bank official, she is experienced in financial management of businesses and overall business growth and development. In fact, he is our business development strategist and strategic partner.

OIL PALM PLANTATION BUSINESS PLAN IN NIGERIA – Competitor Analysis:

As a matter of fact, we have taking notice of several patches of oil palm plantations locally managed in and around our operation environs, yet we are optimistic that people will buy from us because of the following reasons:

  • Quality processed products,
  • Good relationships with vendors.
  • Hygienic processing facility.
  • Availability of the latest, state-of-the-art oil production systems
  • And computerized/ICT  tracking system
  • Outstanding customer service
  • Faster processing duration
  • Fair prices with discount offers
  • Large production capacity to accommodate local farmers processing needs.

What we brought into the Industry:

As a matter of fact, considering our business start-up dynamics, financial management of businesses and overall business growth and development strategies, we bring the following into the business –

  • Impact of educational skill and practical experience,
  • Capacity to consistently provide excellent and high quality oil palm fruits and products,
  • Modern techniques for processing palm kernel oil
  • Therefore, present valuable processing skills that make us occupy reasonable place in the business value chain to a large extent.
  • Good relationships with vendors
  • Our personnel bring into operation, marketing and promotional skills,

OIL PALM PLANTATION BUSINESS PLAN IN NIGERIA – THE INDUSTRY

Oil palm’s botanical name is Elaeis guineensis.  Elaeis guineensis is found in Nigeria in Enugu, Imo, Ondo, Edo, Cross River, Delta, Akwa Ibom, Ekiti, Bayelsa, Rivers, Anambra, Oyo, Abia, Edo and Ogun State.

In fact, the oil palm processing industry is an industry that thrives in most part of African continent and in some parts of Asia. In Africa, Nigeria is one of the countries that have loads of players in this industry. These include locals in rural communities that run patches of oil palm plantation and processing units. Therefore, there are both small scale, medium to large scale investors who also operate standard oil palm plantation and palm oil processing outfits. Most of these medium scale organizations own their own palm tree plantations and processing units. They also engage in the exportation of palm oil to countries across the world.

The Bi-Product:

Furthermore, a major bi-product of oil palm is palm kernel. Palm kernel is gotten from palm fruits and it is the palm kernel that is processed into palm kernel oil. Palm oil is considered to be one of the healthy and vitamin packaged oils that is highly suitable for cooking.

Conclusion:

The oil winning process, in summary, involves the harvesting of fresh fruit bunches from the plantations, sterilizing and threshing of the bunches to free the palm fruit. Then, the mashing of the fruit and pressing out the crude palm oil. The crude oil is further treated to purify and dry it for consumption, storage and export, as the case may be.

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CALL FOR COMPLETE PACKAGE

For your comprehensive oil palm business Plan, contact us on +234 9053130518 or email [email protected] . The comprehensive BP will include detailed financial analysis.

OIL PALM PLANTATION BUSINESS PLAN IN NIGERIA

In conclusion, CESSUMIT run a complete Entrepreneurship Seminar to help individual entrepreneurs and organizations learn how to generate business ideas, document their start-up processes and incorporation, set up good internal control system, write and implement Business Plan.

In fact, we can help you write a detailed, strong and winning business Plan for any use.  We are CAC accredited consultants to register your businesses. As chartered accountants we audit and produce your annual financial statements and make your tax returns. Just contact us immediately.

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PALM OIL PRODUCTION BUSINESS PLAN WITH FINANCIAL ANALYSIS

Looking for a comprehensive palm oil production business plan in Nigeria to kick start your business?

This sample of Palm Oil Production and Processing Business Plan in Nigeria can be used for Grant Applications, NIRSAL, CBN, BOI, BOA, Bank Loans, Proposal writing, Business Concept Note, Competitions etc. Palm Oil Production and Processing Business Plan is a lucrative business that needs a lot of strategic planning to start.

The Palm Oil Processing Business Plan will have these Chapters:

  • Introduction
  • Executive summary
  • Business Description
  • Objective and Goals
  • Estimated Profit
  • Production Strategy
  • Cost Estimates
  • Our vision statement
  • Our mission statement
  • Our business structure
  •  Our strength
  • Market analysis
  • Market trends
  • Our target market for our palm oil production company
  • Our competitive advantage
  • Sales and marketing strategy
  • Sales forecast for our palm oil processing plant
  • Payment options
  • Financial analysis for our Palm Oil production plant
  • Sources of startup capital for our Palm Oil processing company

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1.0. Business Description of Palm Oil Production and Processing Business plan

Business: Palm Oil Production and Processing

Industry: Agriculture (Crop Farming; Palm Oil Production and Processing Business plan in Nigeria)

Farms is an Integrated Palm Oil Production and Processing Farm operating in hygienic and pure production and processing of prepared palm oil targeting Ebonyi state, Southeast Nigeria, the entire nation and finally the export market. We make sure we always use the best quality raw materials and ensure good cultivation practice throughout our cultivation and processing process. Our palm oil is certified to meet international standard and are rich in essential vitamins and other mineral nutrients.

The pros of our products and services are:

  • Quality, healthy and pure hygienically and painstakingly prepared palm oil produce of international quality.
  • Good packaging and intensive cultivation and processing thus ensuring continuous availability of our products.
  • Impeccable or close to impeccable Customer Care Services.
  • Online purchase and delivery for both our products and training services.

My business meets a need and demand for:

  • The supply of pure and high quality prepared palm oil produce.
  • The demand for cheaper and locally produced palm oil for the increasing population.
  • The demand for increased production and consumption of high quality locally produced unadulterated hygienically prepared palm oil produce.

I am in this business because of my keen interest in palm oil. I also desire to produce this produces at a quantity that will meet local demands. I have also discovered a possible means of establishing a monopoly as I have noticed an unsatisfiable market in my area. I have a great passion for self-reliance and creating job opportunities.

2.0. Our Objectives

  • Constant growth in sales in 12 months.
  • To generate customer satisfaction
  • To provide high quality locally produced pure, hygienically prepared palm oil produce at reasonable prices with exemplary services.

3.0. Our Goal for the Palm Oil Production and Processing Business

  • To be a one-stop farm for high quality locally produced pure and hygienically prepared palm oil produce in Nigeria.
  • To have trained over 500 trainees in 12 months.

4.0. Our Vision for the Palm Oil Production and Processing Business plan in Nigeria

To supply high quality locally produced, pure and hygienically prepared palm oil produce in Nigeria at an affordable cost.

Our Mission for the Palm Oil Production and Processing Business plan in Nigeria

To surpass the customers’ expectations by providing quality products and services

How To Download The Palm Oil Plantation Business Plan Template PDF and Doc (with financial analysis)

Above is a part of the Palm Oil business plan template in Nigerian. In case you need the complete Palm oil plantation business plan, follow the procedures to download it.

Pay the sum of N8000 (Eight thousand naira only)  to the account detail below: Bank: GTBank Name: Oyewole Abidemi (I am putting my name and not our company account so you know we are real people and you can trust us) Ac/No: 0238933625 Type: Saving

Thereafter, send us your email address through text message to  +234 701 754 2853 .  The text must contain the title of the business plan you want and also your email address. Immediately after the confirmation of your payment, we will send the Palm Oil Plantation business plan in Nigeria to your email address where you can easily download it.

How To Start A Palm Oil Processing Business In Nigeria.

The palm oil business in Nigeria is not as complicated as you may assume.  I will show you the steps that must be performed in order to begin a lucrative palm oil processing business in Nigeria.

1. Conduct extensive market research This is an intended initial step. It is critical that you first do a thorough market study to assist and guide your marketing approach. It is always preferable to have a ready market than to go seeking buyers once the firm has been established. So remember that. By reading this essay, you have already taken the first step.

2. Find a suitable site for Your Processing Plant. Your ideal site should be convenient for your target market. However, because you will not be selling directly to people, it may be unnecessary for you to be located near a market. In this situation, your optimal site will be near palm oil fields and plantations, or in locations where there are a lot of palm trees. You want your facility to be far away from human and animal activity.

3. Purchasing Palm Oil Processing Equipment In the market for palm oil processing, there are several complex machinery and equipment available. The following equipment is required for the proper operation of your business: • Boiler • Palm fruit stripper • Nut fiber separator • Pounding machine • Mechanical screw press • Barrels/surface tanks I recommend that you obtain a Palm Oil Operation Plan to properly understand the equipment required for your business.

4. Plant installation The following step is to efficiently set up your processing facility and install certain machinery. Typically, you must seek out pros to assist you in constructing the necessary infrastructure as well as setting up and installing it.

5. Promotion!

At the end of the day, your ability to sell will decide the success of your firm. Every day, look for new ways to reach out to additional customers. While concentrating on networking inside your target market. Approach potential marketers and persuade them to purchase from your firm. Concentrate on efficiently expanding your consumer base and developing repeat customers for your company. When it comes to adopting marketing techniques, you must be proactive. This is your company’s lifeline, therefore treat it as such.

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Dr. Abi Demi is a skilled technical writer and author with specialties in the martech and fintech space. Featured on Tekedia, Coin Review, Business Insider, Fintechna, Cryptocoin.news, Date 360 and several other sterling online publications, Demi is an astute technical writer that specializes in finance, marketing and technology - with over 500 published pieces across the internet ecosystem. Contact Abi Demi - [email protected]

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  • Open access
  • Published: 11 October 2021

Oil palm in the 2020s and beyond: challenges and solutions

  • Denis J. Murphy 1 ,
  • Kirstie Goggin 1 , 2 &
  • R. Russell M. Paterson 3 , 4  

CABI Agriculture and Bioscience volume  2 , Article number:  39 ( 2021 ) Cite this article

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Oil palm,  Elaeis guineensis , is by far the most important global oil crop, supplying about 40% of all traded vegetable oil. Palm oils are key dietary components consumed daily by over three billion people, mostly in Asia, and also have a wide range of important non-food uses including in cleansing and sanitizing products.

Oil palm is a perennial crop with a > 25-year life cycle and an exceptionally low land footprint compared to annual oilseed crops. Oil palm crops globally produce an annual 81 million tonnes (Mt) of oil from about 19 million hectares (Mha). In contrast, the second and third largest vegetable oil crops, soybean and rapeseed, yield a combined 84 Mt oil but occupy over 163 Mha of increasingly scarce arable land. The oil palm crop system faces many challenges in the 2020s. These include increasing incidence of new and existing pests/diseases and a general lack of climatic resilience, especially relating to elevated temperatures and increasingly erratic rainfall patterns, plus downstream issues relating to supply chains and consumer sentiment. This review surveys the oil palm sector in the 2020s and beyond, its major challenges and options for future progress.

Conclusions

Oil palm crop production faces many future challenges, including emerging threats from climate change and pests and diseases. The inevitability of climate change requires more effective international collaboration for its reduction. New breeding and management approaches are providing the promise of improvements, such as much higher yielding varieties, improved oil profiles, enhanced disease resistance, and greater climatic resilience.

Introduction

The palms, or Arecaceae, are a family of stem-less, tree-like monocot plants that are highly significant to humans and wider biodiversity, especially in the tropics (Cosiaux et al. 2018 ). The African oil palm, Elaeis guineensis , is native to West Africa and in terms of agriculture, it is perhaps the world’s most important palm species. Oil palm fruits are available year-round and have served as semi-wild food resources in traditional societies for > 7000 years. In its regions of origin the oil palm plant has great significance to local people and for wider biodiversity (Cosiaux et al. 2018 ; Reddy et al. 2019 ; Okolo et al. 2019 ). Cultivation of oil palm as a crop was originally an informal process mainly confined to the West/Central African coastal belt between Guinea/Liberia and Northern Angola (Corley and Tinker 2015 ). Globally, the best production levels are achieved in high rainfall areas in equatorial regions between 7° N and 7° S. During the nineteenth century, oil palm seeds were transported to the Dutch East Indies (modern Indonesia), and to the Malay States (modern Malaysia), as part of colonial ventures to grow newly introduced cash crops in the region. During the twentieth century, more systematic oil palm cultivation on plantations gradually became established in the Malay States. In terms of large-scale commercial production, however, oil palm is a relatively recent crop that only emerged into global prominence later in the twentieth century, with an almost linear rise from 1990 to the early 2000s, followed by a plateau after 2007 (Malaysian Palm Oil Production by Year 2020 ). This was largely due to government initiatives in the 1970s and 80 s aimed at improving the agriculture and economy of the newly independent nation of Malaysia (Corley and Tinker 2015 ; Murphy 2014 ). The later rise of the oil palm industry in Indonesia occurred during the twenty-first century when there was a > 5-fold increase in oil production from 8.3 Mt in 2000 to 43.5 Mt in 2020.

Today, oil palm is crucial to the economies of many countries, especially Indonesia and Malaysia, from which large quantities of its products are exported in the form of oil, meal and other derivatives (Murphy 2019 ). More widely, oil palm is now cultivated in plantations across the humid tropics of Asia, Africa and the Americas, from where its products are exported to global markets. However, despite its increasing cultivation on three widely separated continents, the vast majority of oil palm is still grown in the two adjacent South East (SE) Asian countries of Indonesia and Malaysia (Table 1 ) that generate about 85% of the entire global production (Murphy 2014 , 2015 , 2019 ; Statista 2020 ; Goggin and Murphy 2018 ). The major importing regions, collectively responsible for about 60% of total palm oil imports, are the Indian subcontinent (India, Pakistan, Bangladesh) with about 17 Mt, the EU-27 with 6.5 Mt, and China with 5 Mt (Statisa 2020 ).

There are two contrasting types of oil found in the two principal tissues of palm fruits, namely ‘palm oil’ and ‘palm kernel oil’ (Murphy 2019 ). Palm oil, extracted from the fleshy mesocarp tissue, is a deep orange-red, semi-solid fluid, whilst palm kernel oil is a white-yellow oil that is extracted mainly from the endosperm tissue of the kernel (seed). These two oils have very different fatty acid compositions (Table 2 ), which means they are used for different downstream applications in a range of industrial sectors (Goggin and Murphy 2018 ). In general, the relatively high saturated fat content of palm oil makes it particularly suitable for edible use as a solid vegetable fat (melting point ca. 35 °C). In contrast, palm kernel oil is a less dense product (melting point ca. 24 °C) that is mostly used for non-edible applications (Statisa 2020 ). A major use of palm kernel oil is as the key functional ingredient in many soaps, detergents and cosmetics. E. guineensis plants bear prolific numbers of oil-rich fruit bunches year-round, each containing between 1000–3000 individual fruits (Corley and Tinker 2015 ). Mesocarp-derived palm oil makes up about 89% the total fruit oil with the remaining 11% being derived from the seed or kernel. Because palm oil and palm kernel oil are extracted from fruits by different mechanical processes and have very different downstream uses, they enter separate supply chains immediately after extraction in mills.

In terms of annual production, the global oil palm industry is worth about US$ 60 billion, employing 6 million people directly plus an additional 11 million indirectly (Kadandale et al. 2019 ). Over 81.1 Mt of palm oils were produced globally in 2019–20, of which 72.3 Mt was mesocarp oil (hereafter referred to as ‘palm oil’) while 8.8 Mt was palm kernel oil (Statisa 2020 ). It is estimated that palm oil or palm kernel oil are present as ingredients in at least half of the products found in a typical supermarket. At least three billion people rely directly on palm oil as a regular part of their diet, and it is a staple cooking oil commonly used in African and Asian food preparation. As global populations increase, the demand for palm oil is likely to continue to rise. Estimates from various industry sources predict that between 93 and 156 Mt palm oil might be required by 2050 (Frost and Sullivan 2017 ; Harris et al. 2013 ; Pirker et al. 2016 ). However, these estimates do not consider the effect of climate change on production, which is likely to reduce the ability of the sector to meet these demands (Paterson 2020a , b , 2021a , b ) as discussed later.

In addition to its edible applications, the oil palm crop provides a wide range of non-food products that also include animal feeds. These feeds are derived from the seeds or kernels, which contain a protein-rich meal residue following oil extraction. Palm kernel meal is an often overlooked product of the crop, but is a useful livestock feedstuff that is exported globally. In 2019, about 7.6 Mt palm kernel meal was exported, almost exclusively (98%) from Indonesia and Malaysia (Indexmundi 2021 ). In order of importance, the major importing countries (75% of total 2019 imports) are the EU, New Zealand and Japan, where the meal is used in a variety of feed formulations, especially for ruminants such as cattle.

The image of oil palm has been adversely affected by detrimental environmental consequences of its cultivation, especially with respect to deforestation and haze creation (Paterson and Lima 2018 ). There is also great public concern about the plight of iconic species, and particularly the orangutan, in SE Asia. Some of the particular challenges currently faced by the industry include the following:

Greatly reduced demand for crop-derived biofuels, especially in Europe.

Serious production issues related to plantation management, labour shortages, replanting with improved crop varieties, mechanization etc.

Ongoing environmental and sustainability issues including deforestation, biodiversity loss and GHG emissions due to crop expansion.

Growing threats arising from climate change, including biotic factors, such as pests and disease, that could impact crop performance in unpredictable ways.

Increasingly serious supply chain and consumer issues including potential trade barriers and boycotts.

In all cases these issues will require attention by the industry during the rest of this decade and beyond.

Structure of the oil palm industry

Modern commercial oil palm cultivation began in Malaysia in 1917 (Basiron 2007 ) and over 88% of palm oil is still produced by Malaysia plus the neighbouring countries, Indonesia and Thailand (Statista 2020 ). From 2001 to 2016, the expansion of oil palm plantations was particularly marked in this region with a 2.5-fold increase in Malaysia and a 4.2-fold increase in Indonesia (Xu et al. 2020 ). Over the past decade, oil palm crops have also been grown increasingly outside SE Asia (Murphy 2019 ), as suitable land in Asia becomes scarce and the changing climate is less conducive to cultivation (Paterson 2021a , b ). For example, there is only an estimated 300,000 ha of available land for palm expansion remaining in Malaysia (Villela et al. 2014 ), with increasing government prohibitions for environmental reasons, on further encroachment onto forest and peatland in Indonesia (Jackson 2019 ). Continuing increases in global demand over the past five decades have meant that the cultivation of oil palm has been widely regarded by many tropical countries as a method to boost their economies (Arrieta et al. 2007 ; Ohimain and Izah 2014 ; Paterson et al. 2015 ).

In SE Asia, the primary regions for oil palm production in Indonesia are Sumatra and Kalimantan (Paterson et al. 2015 ; Suryantini and Wilandari 2018 ), while in Malaysia the peninsula was the historical centre, although considerable expansion has occurred more recently in Sabah and Sarawak. Due their climatic suitability, oil palm cultivation has also spread to other SE Asian countries, especially Thailand and Papua New Guinea, with Myanmar and the Philippines in the initial stages of development where the crop is important to the economies of each of these countries (Corley and Tinker 2015 ; Suryantini and Wilandari 2018 ; Pornsuriya et al. 2013 ; Somnuek et al. 2016 ; Woods 2015 ). Due to its profitability, there are also significant emerging oil palm industries in much of tropical Africa with Nigeria, Ghana, Ivory Coast, Cameroon, Sierra Leon, Benin, Angola, and DRC as the main producers (in that order) (Paterson 2021a ). However, in most cases African oil palm crops are mainly used for local consumption, with Cameroon and Ivory Coast as the only major palm oil exporters (Corley and Tinker 2015 ). Nigeria is the fifth highest producer globally, with an annual 1·0 Mt, although this is dwarfed by Indonesia with 42.5 Mt and Malaysia with 18.5 Mt (Statista 2020 ).

In the Americas, the first oil palm plantations were established in Honduras and Costa Rica and currently the largest industries are in Colombia and Ecuador, although Brazil is also expanding its production (Corley and Tinker 2015 ; Murphy 2019 ; Nahum et al. 2020 ). South and Central America are considered as favourable areas for oil palm development due to their theoretical ability to produce palm oil. There is well over 1.5 Mha of planted oil palm in Latin America with Brazil having the largest future potential, although currently the leading producer is Colombia with an annual 1.5 Mt. Although the environmental consequences of increasing oil palm cultivation require careful consideration (Murphy 2015 ; Paterson 2020a , b , 2021a ), these countries could potentially increase their market share in a sustainable manner, for example by only converting land currently used for pasture or illegal coca cultivation. This will be important as land in Malaysia and Indonesia becomes less available (Paterson and Lima 2018 ). However, there are also important climate change constraints for a truly sustainable future industry in the Americas, Africa, and SE Asia (Paterson 2021a , b , c , d ; Indexmundi 2021 ; Paterson et al. 2015 , 2017 ).

A recent study shows the global distribution of smallholder and industrial plantations at high resolution (Descals et al. 2020 ). Smallholders account for 30 to 40% of global land palm oil cultivation (Hambloch 2018 ; Euler et al. 2016 ). In SE Asia there are more than three million smallholders, nearly all of whom cultivate individual family-owned and managed plots of less than 50 ha and often as little as 1–2 ha. In Indonesia, which is the largest oil palm producing country, smallholder plots account for 40% of the total crop area, although they only produce 30% of total national output (Euler et al. 2017 ). However, although the larger commercial plantations tend to be more efficient in terms of oil yield and overall economics, smallholder units serve important social roles in providing income and employment to rural populations (Murphy 2015 ; Euler et al. 2016 ). Smallholder units are also more likely to supply palm oil for local consumption rather than for export. This is particularly true for parts of Indonesia and Africa where the crops can be regarded as key elements in local food security and economic wellbeing (Krishna et al. 2017 ; Kubitza et al. 2018 ). Interestingly, there is also evidence that smallholdings can have lower environmental impacts (Lee et al. 2014 ) and higher biodiversity levels than commercial plantations (Razak et al. 2020 ).

In contrast, commercial plantations tend to be part of large ventures that are often owned by multinational companies that can extend over tens of thousands of hectares, with the largest totalling about one million ha. In terms of global trade, palm oils from commercial plantations are by far the most important contributors. In some cases, the larger plantation companies also own or control many key downstream elements in palm oil supply chains. These include mills, refineries, shipping operations and the distribution networks to processors and retailers in export destinations.

In summary, oil palm cultivation is still highly concentrated in SE Asia, but the focus of future expansion is likely to be elsewhere in the humid tropics, especially in West Africa and northern regions of South America. Therefore, the oil palm industry is a hybrid of large scale, globally focussed, commercial farming and small scale production of a cash crop, often for local consumption. As discussed below, the industry must manage the effects of environmental factors, such as climate change and increased disease incidence on cropping systems, as well as changing consumer sentiments in export destinations.

The environmental context

Oil palm is widely considered as a problematic crop. This has been mainly due to the environmental and ecological impacts of some of the land conversions to oil palm plantations over the past two decades, especially in Indonesia. In many cases these have displaced pristine tropical habitats and affected iconic wildlife species, such as orangutan (May-Tobin et al. 2012 ; Gaveau et al. 2014 ). The EU is the second largest global importer of palm-based oils and this consumer-led demand has been one of the drivers of the expansion of recent oil palm cultivation. Since 2000, increased global demand for biofuels and other non-food products (mainly from Europe), and for food (mainly from India and China), were the major factors behind the conversion of land in SE Asia to oil palm cultivation. In Indonesia the area of oil palm cultivation more than trebled from 2.5 Mha to over 8 Mha between 2000 and 2014 (Indonesia: Palm oil expansion unaffected by Forest Moratorium 2013 ). In some cases this has led to significant habitat loss and reductions in biodiversity as complex ecosystems are replaced with simpler species-poor plantation systems, as well as concerns about increased GHG emissions as land is converted to oil palm (Dislich et al. 2017 ; Meijaard et al. 2020 ; Carlson et al. 2012 ; Barcelos et al. 2015 ).

Several studies have examined the potential impact of land use and climate change on biodiversity in Borneo, where a great deal of oil palm planting has occurred during the past decade (Scriven et al. 2015 ; Gaveau et al. 2016 ). Recommendations from these and other studies, include the need to establish nature reserves in upland areas where climate change will be less severe and also to improve connections between reserves and plantations via wildlife corridors (Scriven et al. 2019 ). One of the most controversial aspects of new palm cultivation in SE Asia is the use of tropical peatland, especially in Borneo. There are several ongoing studies of the impact of peatland conversion in terms of GHG emissions, and other environmental studies have been carried out in association with the major certification scheme that is run by the Roundtable on Sustainable Palm Oil (RSPO). Examples include the following articles: (Gunarso et al. 2013 ; Chase et al. 2012 ; Dalal and Shanmugam 2015 ; Tonks et al. 2017 ; Cook 2018 ).

As a result of such studies, RSPO insist that to gain certification, new plantings since November 2005, must not have replaced primary forest or any area required to maintain or enhance one or more High Conservation Values (HCV). An HCV assessment, including stakeholder consultation, must be conducted prior to any conversions and dates of land preparation and commencement must also be recorded. The HCV assessment process requires appropriate training and expertise, and must include consultation with local communities, particularly for identifying social HCVs. Development should actively seek to utilize previously cleared and/or degraded land. Plantation development should not put indirect pressure on forests through the use of all available agricultural land in an area. In order to improve the participation of smallholders, local certification schemes, such as the Malaysian Sustainable Palm Oil (MSPO) and Indonesian Sustainable Palm Oil (ISPO) initiatives, have been set up, although internationally traded palm oils are almost exclusively certified by RSPO.

Several studies suggest that limited oil palm expansion might be possible on already degraded land, without the need to convert mature tropical forests (Jackson 2019 ; Wicke et al. 2011 ), and that smallholdings may have lower environmental impacts than commercial plantations (Lee et al. 2014 ). Despite these caveats, there is considerable pressure for governments to impose much stricter controls, and even outright bans, on the conversion of tropical peatlands and non-degraded forest to oil palm. Although there have been encouraging statements along these lines from politicians in the two major producing countries, these remain largely aspirational at present and more effective action is required.

Pests and diseases

Oil palm crops are affected by several economically important pests and fungal pathogens, of which several of the most serious diseases will now be considered (Corley and Tinker 2015 ).

Fungal diseases

Basal Stem Rot (BSR) is caused by the fungus, Ganoderma boninense (Fig.  1 ), is a serious disease of oil palm, which can reduce yields by 50–80%. It has increased over recent decades due to its spread from infection foci at a greater rate, following repeated cycles of crop planting on infested sites. In Malaysia, BSR is often reported in young plants and seedlings, whereas previously only mature oil palms were infected (Paterson 2019a , 2020c ). By the time an oil palm stand is halfway through its ca. 25-year economic lifespan, BSR can kill 80% of plants. Furthermore, expansion of industrial oil palm cultivation began early in Sumatra, where G. boninense adaptation to the environment is most likely to occur. This region contains the highest levels of disease, implying an association between the duration of oil palm cultivation and higher disease concentrations. BSR is found increasingly in inland peninsular Malaysia and Sabah, and in some cases is at high levels in places where it has not previously been detected. BSR was also reported at high levels in oil palm grown on inland lateritic soils and peat soils, irrespective of cropping history, whereas before such soils had been disease-free. By the time of replanting (every 25 years), 40–50% of palms were lost in some fields, with the majority of standing palms showing disease symptoms. This information indicates a trend for increasing BSR with projected climate change. However, the climate for growing oil palm is currently optimal and has been so for many decades. The increase in disease previously reported was from increased virulence of the fungus, rather than increased susceptibility of oil palm due to a less suitable climate.

figure 1

Ganoderma boninense basidiomata on oil palm stems. Images are from the authors’ personal collections (RRMP & DM)

BSR may increase further by natural selection of more virulent strains and oil palm cannot always adapt rapidly enough to respond to changes in pathogen virulence. The BSR pathogen has the ability to infect oil palm plants at a rate of as much as 80% incidence over half of its economic life span (Corley and Tinker 2015 ). Ganoderma is a variable genus with poorly defined species concepts and will adapt to climate change more readily than oil palm via natural selection of more virulent strains (Mercière et al. 2017 ). In Indonesia, BSR is less severe in Kalimantan than in Sumatra, probably due to younger crop rotations (Suryantini and Wilandari 2018 ; Paterson 2019a , b , 2020d ). In Thailand, national BSR incidence is relatively low with a reported rate of 1.53%, although it is more widespread in the south (Basal stem rot of oil palm 2020 ). In Southern Thailand, BSR incidence may be influenced by proximity to peninsular Malaysia where disease rates are also high (Pornsuriya et al. 2013 ). In Papua New Guinea, BSR incidence is not as high as in other areas of SE Asia, although rates of 50% have been recorded in some regions. An average of 25% infection is a plausible scenario for this country as the initial incidence is lower than in Malaysia and Indonesia. BSR incidence is probably low in Myanmar as the plantations are more recent and distances between them are large. Myanmar has a distinctly different climate to the rest of SE Asia and is less capable of growing oil palm per se (Paterson 2020b ).

Paterson ( 2020c , d ) considered BSR in Malaysia and Indonesia respectively and in the regions of the countries. Disease incidence was much higher in peninsular Malaysia than in Sarawak, and especially Sabah. Sabah may therefore be a more sustainable region from the perspective of BSR incidence. In Indonesia, Sumatra and Java had particularly high incidences compared to other areas such as Sulawesi and Papua. These scenarios indicated which regions may be suitable in terms of future sustainability of the industry. However, the environmental effects, especially from deforestation, should be of prime importance in planning new plantations.

Fusarium oxysporum f.sp. elaeidis (Foe) results in acute and chronic wilt of oil palm particularly in Africa (Paterson 2021e ). A major outbreak devastated OP in West and Central Africa where it has a particularly high incidence (Rusli 2017 ). Foe in Malaysia and Indonesia is controlled by quarantine procedures, although native strains can infect oil palm in vitro. Avoiding introduction from endemic areas is essential to prevent Foe in regions where it is does not normally exist. However, importation of breeding materials from Africa is required to expand genetic diversity in Malaysia and Indonesia, implying a risk from infested seed and pollen. Quarantine procedures in Malaysia and Indonesia are undertaken, although the risk of spread remains, especially because climate change may increase disease (Rusli et al. 2015 ).

In the Ivory Coast, 20% of palms planted from 1964 to 1967 displayed vascular wilt symptoms, with some crosses at 70% (Cochard et al. 2005 ). But from 1976 to 1983 vascular wilt rates of < 2% were observed and in the 1990s, it was difficult to find symptoms in plantations. These reductions were attributed to breeding for resistance. Rusli et al. ( 2015 ) found that Foe infection of oil palm was frequent in Ghana with incidences of 10.4% and 8.3% and also detected the presence of Foe in ca. 11% of symptomless palms in plantations. Decades of selection and breeding for wilt resistance occurred in Ivory Coast where 20% of palms planted from 1964 to 1967 displayed vascular wilt symptoms, with some crosses at 70% (Cochard et al. 2005 ). Rusli ( 2017 ) demonstrated that Malaysian oil palms were susceptible to infection by Foe strains from Africa.

Phytophthora palmivora is a fungus-like oomycete and a notorious pathogen of oil palm, causing severe damage in Latin American countries, such as Colombia (Corley and Tinker 2015 ). The disease has recently devastated > 30,000 ha in South West Colombia and > 10,000 ha in the Central Zone, and the rapid increase in the disease may be related to climate change. Acute and chronic forms are found, and it is possible that several different diseases have been described under one name. The acute forms are present in Colombia and Ecuador, with the chronic forms found in Brazil (Corley and Tinker 2015 ). P. palmivora disease of oil palm is unreported in Malaysia and/or Indonesia, although a similar spear rot of oil palm has been reported in Africa and Thailand, which may involve P. palmivora . Many other hosts for the oomycete exist in Malaysia and Indonesia (e.g. durian) and, in view of a recent extreme outbreak in Colombia, P. palmivora presents a potentially severe threat to Malaysian and Indonesian plantations (Paterson 2020a ). More assessments of infectivity are essential given that outbreaks of P. palmivora could cause severe problems for major SE Asian oil palm industries.

Other fungi Several lesser fungal diseases also cause problems for oil palm (Corley and Tinker 2015 ). Bunch failure is used to describe oil palm fruit bunches that fail to develop from anthesis to harvest, and the disease can be caused by the basidiomycete Marasmius palmivorus. Another basidiomycete, G. philippii , is closely related to G. boninense but is in fact a trunk rot of Acacia trees that is also listed as an oil palm pathogen (Corley and Tinker 2015 ). This species may become more frequently isolated from oil palm due to climate change. Phellinus noxius is a basidiomycete, partially responsible for upper stem rot of oil palm, occurring together with G. boninense in some cases. Haematonectria haematococca has been implicated in spear rot of oil palm in vitro. Dry basal rot of oil palm is caused by the ascomycete Ceratocystis paradoxa (anamorph =  Thielaviopsis paradoxa ), which also has been implicated in oil palm fatal yellowing in, for example, Colombia. Cercospora ealidis is widespread throughout Africa and causes Cercospora leaf spot. It is infrequent in Asia and is primarily a disease of nursery seedlings and frequently carried forward to plantations where it can survive for a long time (Corley and Tinker 2015 ). Glomerella cingulata is responsible for anthracnose disease in oil palm, although it is not severe currently. All these are diseases of oil palm and it is important to assess how they will be affected by climate change in future studies.

In general, pest species of oil palm do not have as much impact on the crop as diseases, with the possible exception of the rhinoceros beetle, Oryctes rhinoceros , which emerged as the major pest of oil palm in SE Asia in the 1980s. Although chemical insecticides can be effective, they are expensive, they can affect beneficial insects, and the target organisms may develop resistance. This has led to development of biocontrol strategies, the most effective of which are the deployment of two pathogens of the beetle, namely the entomophagous fungus Metarhizium anisopliae and the Oryctes virus (Ramle et al. 2005 ). Both pathogens are specific to rhinoceros beetles and as such will not affect other insects. The Oryctes virus appears to be endemic in the beetle population, and deliberate augmentation can increase infection levels to > 75%. Metarhizium fungal spores can be applied to areas of infestation as a spray that is highly effective at controlling, but not totally eradicating, the beetles. The combined use of these and other natural pathogens of the rhinoceros beetle have the potential to reduce its harmful impact on the crop, while also minimizing risks of resistance development.

With the projected increase in oil palm replanting over the coming years, it will be important to consider the wider release of such biocontrol agents into areas where rhinoceros beetle incidence is particularly high. These and other forms of integrated pest management are being investigated as primary options in plantations across SE Asia (Ramle et al. 2005 ; Kalidas 2013 ). The rapid expansion of high intensity commercial plantations in new regions such as West Africa and South/Central America, plus climatic changes, are likely to result in the emergence of new pests and pathogens. Therefore, it will be important for the public sector and industry to work together in developing improved methods of surveillance and early detection of such threats (Kalidas 2013 ; Caudwell and Orrell 1997 ).

Impacts of climate change

The negative impacts and significance of climate change are well documented in the scientific literature and are now broadly accepted by most of the general public. Climate change threatens the sustainability of crop production via factors such as temperature, rainfall and disease patterns (Rosenzweig et al. 2008 ). However, the likely effects on tropical crops remain less well known, especially in SE Asia, Africa and Latin America (Ghini et al. 2011 ; Feeley et al. 2017 ; Sarkar et al. 2020 ), although recent research has started to address the situation for oil palm (Paterson 2019a , b , 2020b , c , 2021a , b ; Paterson and Lima 2018 ; Paterson et al. 2015 , 2017 ; Sarkar et al. 2020 ; Shabani et al. 2012 ), as discussed below. Climate change effects on natural systems require prediction to mitigate consequential changes in diversity and ecosystem function (Feeley et al. 2017 ). Mapping of plant disease distributions can influence biosecurity planning, specifying areas that qualify for eradication or containment. The CLIMEX model has been developed for current and future species distribution where knowledge about climate change effects on species distributions is essential in mitigating negative impacts (Lenoir and Svenning 2015 ).

Effects of oil palm cultivation on climate change

Koh and Wilcove suggested that oil palm expansion occurs at the expense of forests acting as carbon sinks (Koh and Wilcove 2008 ). Dislich et al. ( 2017 ) determined 11 of 14 ecosystem functions decreased in levels of function by the introduction of oil palm plantations. Fitzherbert et al. ( 2008 ) determined that oil palm plantations support many fewer species than forests and some other tree crops: Habitat fragmentation and increased pollution can further increase GHG emissions. The detrimental aspects of increasing numbers of oil palm plantations has been discussed in terms of deforestation and haze production from burning peat soil to clear ground for new plantations (Tonks et al. 2017 ; Cook 2018 ; Veloo et al. 2015 ). These processes release GHGs contributing to climate change (Dislich et al. 2017 ).

The conversion of tropical rainforests into oil palm plantations is the primary environmental impact of the industry (Paterson and Lima 2018 ). Forested areas are used for the expansion of plantations where the emissions from conversion exceeded the potential carbon fixing of oil palm (Paterson et al. 2015 , 2017 ). Oil palm production involving deforestation re-leases global anthropogenic emissions of 6–17% CO 2 (Wich et al. 2012 ). The highest carbon emitter countries from forest cover loss are Brazil, Indonesia and Malaysia with values of 340, 105, and 41 [Teragrams (Tg) C/year] respectively. Indonesia and Malaysia account for high C emissions from deforestation as they are the first and second highest producers of oil palm. Substantial palm oil production is also undertaken in Columbia and Nigeria (Paterson et al. 2017 ). Emissions from oil palm cultivation in Indonesia accounted for ca. 2–9% of all tropical land use emissions from 2000 to 2010 (Carlson et al. 2018 ) and deforestation accounted for about 30% of global warming-related pollution emissions in 2009, with Indonesia as the world’s seventh-largest producer of such emissions. Plantation expansion in Kalimantan, Indonesia contributed 18–22% of the country’s CO 2 emissions in 2020.

Large reductions in emitted GHGs and climate regulation function occur due to conversion of forest to oil palm plantations (Dislich et al. 2017 ). More GHGs and volatile organic compounds (VOCs), which are precursors to tropospheric ozone, are produced by oil palm plantations. GHGs emitted from land-clearing fires and land and plantation establishment are significantly greater than carbon sequestered by oil palm. VOCs, GHGs and aerosol particle emissions during fire periods result in direct and indirect changes of solar irradiation while undisturbed forests give lower air and soil temperature and higher air humidity microclimates compared to plantations (Dislich et al. 2017 ).

Indonesia has increased oil palm plantations, reducing drastically the primary forest. Sumatra has the highest primary rainforest cover loss in the country. Forest cover in Riau and Jambi declined from 93 to 38% between 1977 and 2009 changing microclimatic conditions from lack of natural forests regulation. Warming of land surface and increases in air temperature from climate change occur from oil palm expansion as observed in Sumatra (Paterson and Lima 2018 ). Oil palm foliage cover is lower, more open, and simpler than tropical rainforest foliage cover. Warming occurs from reduced evaporative cooling and warming induced by land cover change (LCC) exceeded the global warming effect.

The predominant compound contributing to the GHG from oil palm plantations is CO 2 whereas nitrous oxide and methane are at reduced concentrations, although with greater effect per molecule. Large releases of CO 2 from land-clearing fires occur, particularly on peat. Also, fires indirectly increase emissions by increasing peat decomposition. Drainage of peat soil releases large concentrations of CO 2 to establish plantations by oxidation and decomposition: dissolved organic matter is removed from peat soils during drainage, which decomposes and releases additional CO 2 .

The very high fruit production of oil palm allows greater assimilation of CO 2 and produces more biomass than forests and is often used erroneously as an argument in favour of oil palm. This higher rate of C uptake does not compensate for that released when forests are cleared, as forests have more biomass than oil palm plantations unless very long timescales of hundreds of years are considered, well beyond the maximum time frame of ca. 80 years considered in Paterson et al. ( 2015 , 2017 ) in terms of the likely effect of climate change on suitable climate for oil palm growth for example.

Fires also add black carbon (soot), which increase global warming and oil palm plantations release more N 2 O into the atmosphere than forests, mainly from fertilizer use. Peatland deforestation for oil palm cultivation in West Kalimantan, Indonesia, increased GHG emissions greatly (Paterson and Lima 2018 ). Overall, the biological and managerial tools to surmount many challenges exist but need much better support (Murphy 2014 ) and will be discussed below. In addition, large scale conversion of tropical forest to oil palm plantations has detrimental effects on biodiversity.

Effects of climate change on oil palm cultivation

In terms of general effects, climate change is likely to affect sustainable production of palm oil as climatic suitability will decrease, with concomitant increases in economic and social problems in producing regions. Poleward movements in climate-related ranges of particular plants are by far the most frequently reported, including limited reports on poleward change in suitable climates for oil palm growth (Paterson et al. 2017 ; Fei et al. 2017 ). How species may react under climate change has been reported including the detrimental effect on the suitability of future climates on oil palm growth in a global setting (Paterson et al. 2017 ). Furthermore, oil palm production creates climate change as discussed above and this will affect detrimentally the ability to grow oil palms and alter their distribution (Paterson and Lima 2018 ). Oil palm is currently grown in optimal climatic conditions and has been for many decades (Corley and Tinker 2015 ).

Suitable oil palm climatic impact data have been used to create schemes for its mortality by postulating that large degrees of unsuitable and marginal climates in particular were likely to cause high amounts of mortality. Also, reductions in highly suitable and/or suitable climate per se would not cause a significant effect on oil palm mortality. Simulation modelling to determine suitable climate scenarios for growing oil palm (Paterson et al. 2017 ; Paterson 2019a ), were employed to estimate how climate suitability for oil palm growth would change the estimated mortality rate from unsuitable climatic conditions. Predicted percentage oil palm mortality was determined in (a) SE Asia (Paterson 2020b ) and (b) Latin America and extrapolated to Malaysia and Indonesia (Paterson 2020c ) (Fig.  2 a, b). These percentages represent large numbers of oil palms in Malaysia, Indonesia, Thailand and Papua New Guinea because of the large numbers grown in these countries. Information on oil palm mortality is also provided for some African countries in Paterson ( 2021e ). 

figure 2

(Adapted from data provided in Paterson ( 2021b )

a Oil palm mortality in Ecuador, Colombia and Brazil. b Oil palm mortality in Malaysia and Indonesia. These data take into account projected future changes in suitable climate for growing oil palm.

The detrimental effect of future climate changes on oil palm cultivation globally and on oil palm mortality in Kalimantan, Indonesia and some other SE Asian countries were determined (Paterson 2020b , c ; Paterson et al. 2017 ), which provided information relevant to Malaysia (see Table 3 ). High oil palm mortalities were predicted for Thailand, and Myanmar and low mortalities for Kalimantan and the Philippines, while Papua New Guinea was intermediate (Harris et al. 2013 ; Gunarso et al. 2013 ). Modelling of oil palm mortality for three South American countries, Malaysia and Indonesia was performed (Paterson 2020c ) using similar methods to Paterson ( 2020b ). The Latin American countries, particularly Brazil, were assessed to have high future mortalities, whereas the figures for Malaysia and Indonesia were much lower. These potential effects on mortalities will have detrimental consequences on future abilities to meet the demand for palm oil. High levels of mortality were determined for Peninsular Malaysia but not in Sabah or Sarawak in the future from unsuitable climate (Paterson 2020c ). In Indonesia, regions such as Sulawesi and Papua had low levels of mortality in contrast to Sumatra and Java where high mortality was determined (Paterson 2020d ). A study of predicted oil palm mortalities in South America found that by 2050, low mortalities are predicted in (a) the East Coast from Brazil to Suriname, (b) more centrally in Paraguay and (c) Colombia, Peru and Ecuador in the west. High mortalities were determined for Guyana, Bolivia, Western Brazil and Venezuela (Paterson 2021a ). By 2100, much higher mortalities were determined for all countries except Paraguay, which appeared virtually immune to the effects of future climate. Very high mortality of oil palm was determined for Ghana and Nigeria in Africa, especially by 2100 (Paterson 2021e ), whereas Cameroon had low levels,

African oil palms are likely more badly affected by climate change from increased GHGs, although there appears a low extinction risk in the immediate future. Furthermore, losses of oil palm habitats such as tropical rain forests are exacerbating the pressures on oil palm populations: their ecosystem functions and services will be highly sensitive to climate change. Blach-Overgaard et al. ( 2015 ) predicted climate suitability losses across almost all regions where palms occur in Africa and CLIMEX modelling indicated that Africa will have less suitable climatic conditions for oil palm cultivation (Paterson et al. 2017 ). However, sharp longitudinal trends to potential refuges from west to east Africa were found, which could allow oil palm to survive naturally, or by the creation of new plantations towards to east of the continent, with, of course, environmental concerns being paramount (Paterson 2021a ). Using similar methods, a phased increase in suitable climate was predicted, which implied more unsuitable climate for growing oil palm towards the centre of the South American continent (Paterson 2021b ). Increasing longitudinal trends in suitable climate for growing oil palm SE Asia were observed from current time to 2050 and 2100 from west to east (Paterson 2021c ). Paterson ( 2021d ) developed an improved model for determining suitable climate for growing oil palm in Africa which confirmed the west to east trend and could be employed in other regions such as South America and SE Asia. 

A significant negative relationship was found between annual average temperature and sea level rise and oil palm production in Malaysia temperature with rises of 1 to 4 °C potentially causing oil palm production to decrease by 10 to 41% (Sarkar et al. 2020 ). Future changes to suitable climates for growing oil palm worldwide were considered using modelling based on temperature, soil moisture and wet stress data (Paterson et al. 2017 ). The general predictions were for a reduced level of suitable climatic regions by 2050 and further reductions by 2100. The projections indicate serious consequences to the oil palm industry generally. In Africa, the climate is predicted to be less suitable for growing oil palm at the same rate, or faster than, Malaysia and Indonesia with the exception of Uganda where increases in climatic suitability were predicted. Paraguay appears to gain suitability in climate for growing oil palm in South America, whereas Venezuela will have a particularly low level of suitable climate. French Guiana, Surname and Guyana appear to maintain suitable climates and large losses were determined in west Brazil by 2100. The western countries of Colombia, Peru and Ecuador will suffer severe losses of suitable climate. Furthermore, there was a three-phase trend in suitable climate rather than a single direct longitudinal change (Paterson 2021b ). Vietnam, the Philippines, Papua New Guinea (PNG) and island Malaysia had increased suitable climate by 2050 in SE Asia. Large decreases in suitable climate by 2050 for Thailand, Laos and Cambodia, which are towards the west of SE Asia, were observed (Paterson 2021c ).

Climate has an important role in defining the range limits of oil palm distribution by exerting eco-physiological constraints (Paterson et al. 2017 ). However, factors such as soil properties and biotic interactions may prevent plants from colonizing sites that are otherwise suitable. Studies such as Paterson et al. (Razak et al. 2020 ) are unusual in that a wider range of climatic conditions are considered than only temperature (Paterson 2021a ). Changes in climate will have broad-scale impacts on the distribution of oil palm. Alterations in cold, heat and dry stresses were largely responsible for the changes in climatic suitability for oil palm cultivation, while wet stress was unimportant, hence extending the range of parameters from temperature alone (Paterson et al. 2017 ). Apart from temperature (Feeley et al. 2017 ) and diseases, a wide range of factors still awaits consideration, although studies on effects on crop production have been reported (Lobell et al. 2006 ).

One of the most important future threats is the emergence of new pests and diseases and/or the movement of existing diseases from one part of the world to another. The transfer of existing biotic threats could occur due to climatic factors, but another mechanism is movement via trade, travel or other human agency where potential pathogens might elude current biosecurity measures. For example, the serious impact of P. palmivora on plantations in S. America, and if this pathogen were to reach the central growing regions of SE Asia, its impact could be devastating (Paterson 2020a ; Mohamed Azni et al. 2019 ). Although biosecurity measures are already in place, these tend to be focussed on known threats and may not be able to cover all of the many potential entry routes for a new pathogen. A similar situation exists for Fusarium wilt disease of oil palm (Paterson 2021e ) with African countries suffering most from this particular disease.

An example of an unexpected new form of pathogen of oil palm is the orange-spotting coconut cadang-cadang viroid variant (OSCCC-Vd) (Coconut cadang-cadang viroid (cadang cadang disease) 2020 ). Viroids were only discovered in the 1970s and are the smallest and simplest known type of infectious pathogen, consisting of just one small, naked, circular single-strand of RNA that does not encode any proteins. The origin of viroids is unknown with some suggestions that they might date from an ancient non-cellular ‘RNA world’, although a more parsimonious hypothesis is that they have arisen de novo on multiple occasions as plant-specific pathogens (Catalán et al. 2019 ). OSCCC-Vd normally infects coconut plantations and is endemic in the Philippines, but early in 2011 a putative variant was found in oil palm plantations in Sabah, triggering a ban on the movement of oil palm materials to other parts of Malaysia. Although the threat of OSCCC-Vd eventually receded in the 2010s, this episode exposed problems in the surveillance mechanisms and phytosanitary procedures in the face of the sudden appearance of a hitherto unknown pathogen.

The effects of climate change on oil palm diseases by fungi and by the oomycete P. palmivora have been discussed and indicate a trend for increased BSR, Fusarium wilt  and P. palmivora incidence with climate change. Modelling of the effect of changes in climate on the infection levels of BSR in Sumatra, Indonesia, including quantitative BSR data, indicated that BSR would become even more serious after 2050 (Paterson 2019b ). Weather is a major factor in crop pathogenesis and, when crops suffer cold, heat or desiccation stress, they may be more susceptible. Mountain areas were considered in this assessment which affected some results considerably. For example, hilly regions in North Sumatra did not provide a suitable climate for oil palm.

A similar ‘Agriculture 4.0’ methodology of big data and simulation modelling was used to produce a scheme of how BSR might advance under future climates in Malaysia (Paterson 2019b ). The assessments of BSR were merely qualitative and indicated, nevertheless, that the levels of infection would also increase a great deal after 2050. Paterson ( 2020b ) considered future climate effects on BSR in Kalimantan and alternative countries in SE Asia. Kalimantan and the Philippines were assessed as sustainable, but Thailand and Myanmar were unsustainable, while Papua New Guinea was intermediate in sustainability (Fig.  3 ). P. palmivora is prevalent in South America and Paterson ( 2020c ) extended the principles described above to the disease. Colombia and Ecuador were highly susceptible, while Brazil was less so. However, a severe threat to Malaysia and Indonesia was assessed, which would require increased future vigilance to control the disease. Paterson ( 2021e ) indicated an equivalent situation for Fusarium wilt of oil palm focusing on African countries extrapolated to Malaysia and Indonesia. 

figure 3

Basal stem rot in three S E Asian countries. The incidence of disease was determined from the changes in suitable climate for growing oil palm as described in Paterson ( 2020b )

Amelioration of climate change effects on oil palm and vice versa

Procedures for amelioration of the effects of climate change on oil palm and the effect of oil palm on climate change, have been discussed as partially based on CLIMEX models (Paterson and Lima 2018 ). The situation with the oil palm industry cannot be business as usual in light of the effects of climate change on oil palm and vice versa. A series of procedures have been devised to address how the industry might mitigate these problems (Paterson and Lima 2018 ). Many of these measures will help to maintain the biodiversity normally associated with forests because they will stop the plantation being a monoculture. Also, the soil microfauna will likely increase as a result of these measures.

Reducing the effects of oil palm on climate change

Plantation management measures can prevent or reduce losses of some ecosystem functions which will reduce climate change. These include (a) avoiding illegal land clearing by fire, (b) avoiding draining of peat, and (c) using cover crops, mulch, and compost (Dislich et al. 2017 ). Reducing GHG by limiting oil palm expansion to areas with moderate or low carbon stocks is most effective. This involves ceasing development of plantations on peatland and enforcing the moratorium on new concessions in primary forests. In addition, rehabilitation and restoration of converted peatlands are an option. Limiting the problems of flooding may prevent increased CH 4 emissions on mineral soils. Reducing unnecessary expansion of plantations and ensuring existing ones are managed optimally are crucial. Mechanisms such as (a) reduced emissions from deforestation and forest degradation, plus conservation, sustainable management of forests, and enhancement of forest carbon stocks (REDD+), (b) national greenhouse gas accounting, and (c) accurate emission factors for C dynamics are essential (Comeau et al. 2016 ). Considerable funding has been obtained for REDD + scheme. REDD + proposals include growing oil palm on reclaimed soil and replacing the use of fertilizer with other methods. A few plantations are replacing grassland or scrub where the average C content of the plantation will exceed that of the previous vegetation and so becoming a greater C sink.

Controlling disease may assist in decreasing the unwanted expansion of plantations as yields will be increased from reduced disease in current plantations, such as described for Ganoderma rots of oil palm (see below). The current awareness of environmental issues makes optimizing current plantations by reducing disease imperative in any case. Reducing nitrogen fertilizer is an effective way to decrease nitrogen-based emissions (Dislich et al. 2017 ). Oil palm plantations release large quantities of nitrous oxide (N 2 O) into the atmosphere linked to nitrogen (N) fertilizer use. An option for oil palm planting, without threatening tropical rain forests, is the rehabilitation of anthropogenic grassland that was created by human clearance of natural forest many centuries ago. For example, there are extensive areas of anthropogenic grassland in Indonesia where much of the spread of oil palm plantations will take place (Paterson and Lima 2018 ).

Reducing effects of climate change on oil palm

Evidence is growing of the existing and likely future impacts of anthropogenic climatic changes on the oil palm industry. Immediate priorities should include further research to understand climatic effects on oil palm in the many regions of the tropics where the crop is now grown, and to begin the implementation of mitigation strategies to minimize adverse effects. Most climatic threats identified to date involve periods of elevated temperature and reduced rainfall, both of which cause stresses that impact on overall crop performance, and in particular oil yield. Increasingly well documented impacts of climatic cycles such as El Niño and La Niña have underlined the crucial role of climate for oil palm performance and oil yield (Rahutomo 2016 ; USDA 2016 ).

Strategies are required to minimize the adverse effects of climate change on oil palm cultivation: it cannot be business as usual for the industry. These practices may also decrease climate change from reduced deforestation if the yields of existing oil palm are optimized to cope with climate change. More dispersed cultivation outside the main producing countries could ameliorate threats from climate change as a wider range of climates would be encountered, some of which may be more suitable for oil palm. Current expansion into West Africa and South/Central America already underway was intended to create a more secure production system in the longer term. However, Latin America and Africa may be even more affected by climate change in terms of suitable climate for growing oil palm than SE Asia, implying that expansion will be unlikely. Even within these continents there are trends which will be useful for plantation managers (Paterson 2021a , b ).

Cultivation at higher altitudes and/or lower and higher latitudes may be possible beyond the lowland tropics as climate change progresses. An increase in highly suitable climate for growing oil palm by 2030 in Indonesia and Malaysia largely in mountainous regions of Sumatra, Sarawak, Borneo, and Sulawesi was reported (Paterson et al. 2015 ). There may be novel areas for oil palm development even under climate change, although in general, the climate suitability per se will be reduced. A caveat being potential biodiversity and ecological function loss if novel areas are converted from, for example, forest. The use of cover crops to reduce climate effects on oil palm may be possible and increases biodiversity. The sustainability of oil palm production will depend in part on using cover crops, especially under suboptimal conditions. Leguminous cover crops are grown to (a) coexist with oil palm following jungle clearing and planting/replanting, (b) provide complete cover to an otherwise bare soil, and (c) protect from erosion. They also perform multiple functions such as reducing soil water evaporation, reducing runoff losses, improving and maintaining soil fertility, and recycling of nutrients (Samedani et al. 2015 ). They promise reduced environmental pollution and improved crop yields. Legumes may reduce C and N losses from oil palm systems and increase soil C sequestration. Some examples for oil palm are as follows: Pigeon pea ( Cajanus cajan ), Calopo ( Calopogonium mucunoides Desv.), butterfly pea ( Clitoria ternatea ), white tephrosia ( Tephrosia candida ), and Brazilian stylo ( Stylosanthes guianensis  var.  guianensis ) some of which are already in use in SE Asia (Paterson and Lima 2018 ). The biodiversity of the plantation will be increased per se as each plant is introduced and by the increase in nitrogen fixing bacteria associated with the legume.

Soil management practices including (a) empty fruit bunch (EFB) application, (b) palm frond application and chemical fertilization improving soil fauna (worms, beetles, and ants) feeding activity, and (c) better soil chemical properties, all of which show considerable promise. EFB applications greatly enhanced soil fauna feeding activity and are associated with increased concentrations of base cations and soil moisture. This elevated biological activity has good potential to assist ecosystem functions such as litter decomposition, nutrient cycling, organic carbon stabilization, and ultimately oil palm productivity. The use and presence of earthworms may increase the effectiveness of growing oil palm, as they can contribute to soil turnover, structure formation and serve as a fertility enhancer and, again, increase biodiversity (Paterson and Lima 2018 ).

Developing new oil palm varieties resistant to climate change is another possibility (Rival 2017 ), although may not be easily achieved. Breeding oil palm for climate change requires multidisciplinary and collaborative research at a high level (see next section). Selecting for complete resistance, rather than tolerance to diseases, leads to high selection pressures for new variants of the pest/pathogen that can overcome the resistance in the crop. Resistant oil palm cultivars to climate change, or environmental stress, may overcome the less favourable growth conditions imposed by climate change (Tang 2019 ). However, it is impossible to know accurately what climate changes will be needed to enable resistant cultivar development, e.g. a cultivar resistant to desiccation stress may be sensitive to high temperature. High fertilizer use causes increased emissions of GHG from manufacturing, transportation, and application, and improvements will be required in oil palm nutrient uptake efficiency by breeding for suitable root systems.

Methods that ameliorate the effect of (a) climate change on oil palm and (b) oil palm cultivation on climate change include the following: Optimizing the rhizosphere by adding arbuscular mycorrhizal fungi (AMF) will also assist in reducing climate change with generalized benefits to oil palm growth, by reducing the need for fertilizer for example. Arbuscular mycorrhizal (AM) symbioses have beneficial effects on water transport to assist in overcoming drought conditions, of relevance particularly to ameliorating climate effects. Reducing fertilizer production and use will cause decreased emissions that lead to climate change, and the use of AM could ameliorate the effects on oil palm. AM and AMF addition will increase biodiversity within plantations (Paterson and Lima 2018 ).

“Slash-and-char” as an alternative to “slash-and-burn” of forests cleared for oil palm may be beneficial and feasible. Slash-and-char effectively produces charcoal to sequester CO 2 normally employed for forest residues. This could be used more extensively to improve agriculture in the humid tropics, enhancing local livelihoods and food security, while sequestering various forms of carbon (C) to mitigate climate change. Biochar soil management systems can deliver tradable C emissions reduction as the C sequestered is accountable and verifiable. The fraction of the maximum sustainable technical potential that is realized will depend on socioeconomic factors, including the extent of government incentives and the emphasis placed on energy production relative to climate change mitigation (Paterson and Lima 2018 ). Reduced tillage is another possibility for affecting climate change, where reducing tillage with AMF provides the optimal conditions for oil palm. Low tillage combination with AMF assists nutrient uptake, water relations, and protecting against pathogens and toxic stress, hence potentially ameliorating the effect of climate change on oil palm growth. Also, low tillage will decrease the emission of GHG from oil palm plantations (Paterson and Lima 2018 ).

An important tool used by policymakers to assess the impacts of a particular cropping system is life cycle assessment (LCA) (Schmidt 2015 ; Yee et al. 2009 ). This method seeks to estimate the impact of all aspects of the production process from planting seed, growing, harvesting and processing the crop (including fuel and labour costs); application of inputs such as water, fertilizer, herbicides, and pesticides; shipping of the oil overseas and downstream conversion into products such as foods and oleochemicals; transport to wholesalers, retailers, and consumers; and finally, disposal of products at the end of their lifetimes. Unfortunately, very few published studies cover the entire system ‘from cradle to grave’.

The most effective manner of addressing climate change is to adhere to policies devised at the 2019 COP25 climate meeting by reducing GHGs and future temperature rises. Conservation scientists, managers and environmental policymakers need to adapt their guidelines and policies to mitigate the impact of climate change (Brooke 2008 ). The new recommendations from COP meeting in Glasgow, Scotland in 2021 should be implemented as a matter of urgency as the most effective procedures for controlling climate change and consequently the effects of climate change on oil palm. Importantly, palm oil producers should also collaborate more effectively to help shape future policies on climate change and oil palm.

Breeding and biotechnology to improve oil palm as a crop

Recently, there have been several significant advances in breeding and biotechnology use for oil palm improvement. This is despite the challenges posed by the long-lived perennial nature of oil palms, which are large plants typically grown commercially for > 25 years. Hence, such biological strategies are much more complex and lengthier to implement compared to the smaller, faster growing annual crops. Breeding efforts have tended to focus on major economic traits such as oil yield and composition, pest and disease resistance, and plant architecture. Until relatively recently, oil palm breeding was also disadvantaged by the restricted genetic pool of commercial varieties, most of which were derived from small numbers of plants imported from Africa to SE Asia in the nineteenth and twentieth centuries. The available gene pool has now been greatly expanded, largely thanks to a series of germplasm collection expeditions to Africa and South America by pioneering breeders such as Rajanaidu et al. ( 2014 ). This has now allowed for genome-wide association studies (GWAS) of key traits such as oil yield and fatty acid composition (Ithnin et al. 2020 ) in the case of American oil palm and an Elaeis oleifera × Elaeis guineensis hybrid (Osorio-Guarín et al. 2019 ). Recent breeding-related reviews include genomics, genomic selection (Nyouma et al. 2019 ), transgenics (Costa et al. 2012 ), genome editing (Yarra et al. 2020 ), and marker-assisted selection (Ting et al. 2018 ; Babu et al. 2019 ). Following the publication of the oil palm genome sequence in 2013 (Singh et al. 2013 ), several detailed linkage maps have now become available for the use of breeders (Ong et al. 2019 ; Herrero et al. 2020 ).

Genomics-based strategies such as marker-assisted selection are already generating several useful advances for a variety of important traits that include oil yield, fatty acid composition and crop morphology (Xia et al. 2019 ; A quantum leap with genome select 2020 ). One of the most exciting recent developments was the announcement in mid-2020 of new breeding lines that are capable of more than double the current average oil yield (A quantum leap with genome select 2020 ). These plants are part of a genomics-based programme called ‘Genome Select’ carried out by plantation company Sime Darby, with a claimed 9.9 t/ha average yield over 5 years in field trials under optimum conditions. Given that current average palm oil yields are less than 4 t/ha, and that soybean and rapeseed only yield 0.3 and 1.2 t/ha respectively, this could be a game changer for the industry if two important conditions are met. Firstly, the experimental lines will need to be assessed for their oil yield performance under commercial plantation conditions in a range of geographic regions and, if necessary, crossed with locally adapted varieties. Secondly, the new higher yielding varieties need to be part of an ambitious replanting programme that will potentially replace a significant proportion of the estimated 2.5 billion oil palms that are currently under cultivation worldwide.

In terms of molecular genetics approaches to BSR mechanism and control, G. boninense genome and transcriptome data are now available with two G. boninense genome assemblies in the NCBI Depository (Wong et al. 2019 ), which provides a table listing publicly available genome and transcriptome data associated with the G. boninense and G. boninense -oil palm pathosystem. High-throughput next-generation sequencing and improved bioinformatics analyses has greatly facilitated G. boninense pathogenesis and housekeeping candidate gene identification. However, G. boninense remains poorly studied with respect to system-level gene function studies and biotechnology manipulation, with no available gene co-expression network models. Most studies have focused on host transcriptome data, whilst similar studies on the pathogen remain scarce. Ho et al. ( 2016 ) utilised mass RNA sequencing and de novo assembly of RNA-seq and were able to detect a high number of Ganoderma transcripts involved in lignin metabolism, such as manganese peroxidase and laccases. It is encouraging that, very recently, in silico mapping within an oil palm breeding program has revealed several QTL associated with genetic resistance to G. boninense (Daval et al. 2021 ).

Publication of the transcriptome of G. boninense at monokaryon, mating junction and dikaryon stages (Ho et al. 2016 ; Daval et al. 2021 ; Govender et al. 2020 ) will be useful for investigation of the mating process of this fungus. However, annotation and functional studies of these differentially expressed genes at different stages have not yet been done. RNAi as a tool for functional genomics to study developmental or virulent genes is lacking, although the genome has been sequenced, and there is the promise of new approaches to molecular breeding using genome editing technologies such as CRISPR-Cas-9. The role of genes involved in ergosterol biosynthetic pathway in G. boninense utilizing RNAi-mediated gene silencing is currently being investigated (Govender et al. 2020 ). The identification and verification of candidate genes are crucial for the application of these targets in RNAi-based crop protection, such as host-induced gene silencing (HIGS) or spray-induced gene silencing (SIGS). In addition, a study on the potential application of RNA silencing targeting DCL genes of G. boninense to confer protection against basa 581 stem rot is in progress (Govender et al. 2020 ). The availability of G. boninense genome data in public database (NCBI) enables potential candidate genes to be identified for testing and designing of efficient silencing constructs to avoid off-target transcripts, whilst the availability of the oil palm genome data helps to ensure the silencing constructs do not target and negatively affect the host. Because G. boninense on attacks oil palm by degrading lignin (Fig.  1 ), there is the possibility of modifying lignin to make oil palm plants more resistant. Alternatively, making the plant more resistant to initial fungal colonization by inhibiting carbohydrate metabolism first is a more logical approach that possibly overrides the emphasis on lignin per se (Govender et al. 2020 ).

Global supply chains and consumer sentiment

Palm oils are globally traded commodities with lengthy and complex supply chains, which can impede implementation of sustainability criteria, such as no-deforestation (Lyons-White and Knight 2018 ). This complexity is further increased by non-economic factors including sustainability, traceability, disease monitoring and pest management. More recently, however, a more constructive dialogue has emerged as several NGOs and community groups have joined with bodies such as RSPO and some major industry players in exploring initiatives such as certification schemes, that seek to guarantee that palm oils are sourced from sustainable and environmentally friendly sources (RSPO 2009 ).

Palm oil supply chain and traceability

Due to increasing awareness of the wider impacts of oil palm crops, sourcing of palm oil from verified, certified sustainable/responsible sources is of growing interest. Supply chain traceability ensures that information about products can flow easily and enable consumers to have maximum information about product origins. Certification schemes have mostly been established to improve sustainability within the industry, but for these to operate openly and transparently, supply chain traceability is an essential requirement. An overview of a typical palm oil supply chain is displayed in Fig.  4 . The most widely used sustainable certification scheme, which aims to improve traceability, is RSPO (RSPO Supply Chains 2017 ). A graphical overview of each model is also displayed in Fig.  5 :

Identity Preserved (IP): sustainable palm oil is derived from a single source and kept separate from all other sources throughout the entire supply chain

Segregated (SG): sustainable palm oil is derived from multiple sources and mixed; it is then kept separate from conventional palm oil throughout the supply chain

Mass Balance (MB): sustainable palm oil is mixed with palm oil from non-certified sources in a controlled and regulated manner

RSPO credits: the supply chain is not monitored for the presence of sustainable palm oil. But manufacturers and retailers can buy credits from RSPO-certified growers, crushers and independent smallholders

figure 4

A conventional palm oil supply chain with no certified traceability. The palm oil is produced, transported, refined, incorporated into products and then used by the customer

figure 5

The four different RSPO supply chain models including Identity Preserved, Mass Balance, Segregated and Book and Claim (source: www.rspo.org ). The premise of how each supply chain works is described in-text. All palm oils produced under RSPO certification are able to carry RSPO branding, though in the case of Mass Balance and Book and Claim, there is no guarantee that 100% sustainable palms oils are being used

Labelling, health and nutrition

Labelling has been shown to influence consumer purchasing habits and to have positive impacts on food production. RSPO believes that using its certification trademark on products will be central to raising awareness and driving demand. Palm oil is used for cooking and is also added to many ready-to-eat foods. Its taste is considered savoury and earthy, with some people describing its flavour as being similar to carrot or pumpkin. It has been a staple in West African and tropical cuisines for millennia (Corley and Tinker 2015 ). In recent years, the public debate on the health and sustainability of palm oil and its use by food industries has strongly influenced consumer choices. There has been a perception that palm oil, with its relatively high saturated fat content, has adverse nutritional qualities, despite its long history as an important indigenous foodstuff in the tropics. This perception has been strongly challenged by recent meta-analyses and prospective observational studies, mainly conducted in North America and Europe, that failed to demonstrate a correlation between total saturated fat intake and an elevated risk of cardiovascular disease (Chowdhury et al. 2014 ).

Production of sustainable palm oil is recommended so that consumers only buy from companies using palm oil certified under RSPO, or similar certification schemes that have transparent commitments to improved ecosystem services and human wellbeing (Ayompe et al. 2021 ). Certification schemes improve consumer confidence and provide a high level of guarantee that that areas of high conservation value are preserved, local communities are supported, and that palm oil plantation managers are implementing best practices including for sustainability and the fair use of labour (Carlson et al. 2018 ; Schoneveld et al. 2019 ; Furumo et al. 2020 ; Santika et al. 2021 ). Whilst some groups have criticized certification schemes for not moving far or fast enough, researchers and NGOs such as WWF are working with schemes like RSPO, to facilitate greater progress and to include more progressive criteria for best practice, in order to certified. An example of such developments was the announcement in mid-2021 of a multi-stakeholder initiative called Project Lampung (Bootman 2021 ). This was launched with the aim of linking smallholder farmers in the Lampung province of Indonesia with the NGO, Solidaridad, plus multinationals (including BASF, Cargill and Estée Lauder) in order to enable their palm oil to reach global markets via RSPO certification (RSPO 2021 ).

Future prospects

As with many other sectors of commercial agriculture, the global oil palm industry is currently facing significant future challenges as it comes under increased scrutiny in an increasingly interconnected world. Many of these issues, such as the future of palm-based biodiesel, the stagnation in crop yield and related labour problems, and concerns about sustainability and environmental impact are relatively longstanding, but they have been brought into sharper focus as a consequence of the COVID-19 pandemic that started in 2020 and is likely to have long-term effects on the industry as will now be discussed.

An uncertain future for palm-based biofuels

Over the past decade a growing proportion of palm oil has been used as a biofuel, mostly in the transport sector as biodiesel derived from methyl esters of the oil. Most palm biodiesel is consumed locally in Malaysia and Indonesia. This is due to government-supported mandates that enforce the mixing of palm biodiesel with petroleum-derived diesel. However, the use of palm biodiesel as a carbon–neutral fuel in the wider global transport sector has proved to be controversial, especially in the EU (Muzii 2019 ). Until very recently, a substantial and growing amount of palm biodiesel, totalling 4.9 Mt in 2018, was used in the EU. As shown in Fig.  6 , for over a decade the EU has steadily increased its imports of palm oil for fuel use while the amount used for food, feed and oleochemicals has declined from a high of almost 4 Mt to about 2.7 Mt (Chandran 2019 ). These data show that in 2018 the EU imported a total of 7.6 Mt palm oil but only 2.7 Mt (36%) of this was for food and personal care use, while the remaining 4.9 Mt (64%) was for use as transport biodiesel or fuel oil (e.g. for electricity generation).

figure 6

Source: Ref. Muzii ( 2019 )

EU palm oil consumption by end use. A steady decline in food use is mirrored by an increase in biodiesel use for palm oil imported into the EU from 2008 to 2018.

As described above, concerns about the environmental impact of oil palm cultivation and the use of food crops for biofuel, coupled with recent advances in electric vehicle (EV) technologies, mean that the EU is now moving away decisively from both crop-based biofuels and fossil fuels, with many countries seeking to replace all carbon-based fuels by 2050. In the medium term, as fossil oil use continues to decline and its price remains low, there are few prospects that palm biodiesel will compete effectively on price in international markets. This is likely to reduce the global market for palm biodiesel, although the additional palm oil that this would release should still be in high demand for edible uses. For example, Corley and Tinker 2015 ) estimated that, by 2050, a further 6 Mha of land could be required to meet total oil palm production requirements, which is a formidable challenge in view of the scarcity of environmentally suitable land. However, if most of the current palm that is diverted to biodiesel is switched to food use, about 3–4 Mha of this additional land would not be required.

Production issues

On the production or supply side, the oil palm sector faces several significant challenges that include new scientific advances, changing patterns of global trade and consumer sentiment, and the related issues of labour and mechanization. The efficiency and effectiveness of plantation management varies greatly across the sector, both among large commercial enterprises and individual smallholders. One of the most remarkable features of the oil palm is the stagnation in yields at values around or under 4 t/ha over the past two decades (Chandran 2019 ). As shown in Fig.  7 , this is in marked contrast to other major crops, including oilseeds, which have shown consistent yield increases in response to factors such as biological improvements, improved management and more efficient transport and supply chain infrastructure. In some cases, modelling analysis can provide new insights into plantation management that suggest possible improvements. A recent example is the application of model optimization and heuristic techniques that indicated significant potential for yield improvements by reducing the harvest cycle length from 19.6 to 8.3 days in a plantation in Columbia (Escallón-Barrios et al. 2020 ). Innovative new ideas for ‘smart’ oil palm mills have also been advanced (Isaac 2019 ) as well as the use of digital technologies, such as blockchain, to enhance the performance and transparency of supply chains (Keong 2019 ).

figure 7

Source: Ref. Chandran ( 2019 )

Stagnation of average oil yield (in tonnes per hectare) in Malaysian OP crops (right-hand axis) compared to two major competitor oilseeds, rapeseed and soybean (left-hand axis).

The oil palm cropping system is unusual in its continued reliance on large amounts of relatively unskilled manual labour that must operate in a humid and hot tropical climate on a year-round basis (Crowley 2020 ). During recent decades many plantations have increasingly relied on temporary migrant labour, but low wages and increasing incomes from alternative forms of employment have created staff shortages, which were greatly exacerbated by the COVID-19 pandemic (Crowley 2020 ; Raghu 2021 ). These problems have been compounded by allegations of poor labour practices in some plantations that led to the blacklisting of some of the largest commercial companies and import bans by the US Customs and Border Protection in 2020–21 (Jamal 2021 ).

In the long term, the most realistic solution to the current labour problems that plague the sector is to introduce more mechanization and shorter plants, as has been done for several other staple monocot and tree crops (Murphy 2011 ). One way of facilitating mechanization and increasing yield is to use modern molecular breeding approaches to modify crop architecture, for example to reduce trunk height as has been done with apples and major cereals such as wheat and rice (Murphy 2011 ; Nagai et al. 2020 ). Interestingly, a very recent study has identified three major QTLs associated with oil palm height on chromosome 11, which could facilitate the breeding of shorter and more compact palms for enhanced yield and ease of harvesting (Teh et al. 2020 ). Replanting of ageing and/or poorly performing palms is a vitally important strategy for improving the yield, and hence the overall sustainability and environmental footprint of oil palm crops. This applies to both large commercial growers and smallholders, many of whom use inferior seeds bought from middlemen with no record of their provenance. While there have been government initiatives in Malaysia and Indonesia, these efforts need to be redoubled and made more effective (Shehu et al. 2020 ; Yahya et al. 2020 ; Oosterveer 2020 ).

Sustainability and environmental challenges

The use of oil palm as a food ingredient in the large EU market has been in steady decline over the past decade (Fig.  6 ). There is little doubt that part of this decline has been due to adverse consumer sentiment about the oil palm industry in general and there are now discussions in the EU to require verifiable ‘point of origin’ declarations for all food-grade palm oil (Southey 2020 ). This could mean that any oil that cannot be reliably identified as from a sustainably certified source, such as RSPO, might not be imported into the EU. Clearly the industry needs to address these certification and authenticity issues in its supply chains to ensure that it becomes fully compliant with the requirements of its second largest customer, namely the EU.

The global oil palm industry is a major component of contemporary agriculture, supplying food to billions of people, plus a host of non-food products that include strategically vital cleaning products used in critical health care settings. However, there are well founded concerns about the expansion of oil palm plantations into sensitive habitats, such as highly biodiverse tropical forests and peatlands (Meijaard and Sheil 2019 ; Meijaard et al. 2018 ). There are no viable alternatives to oil palm in terms of its yield and delivery of a range of specific oils for human use (Parsons et al. 2020 ). It is therefore important to implement transparent and effective certification schemes right across the industry to guarantee that oil palm products can be labelled as being derived from environmentally sustainable and socially responsible sources. It is also important to recall that deforestation and habitat loss are also associated with the second most important global oil crop, soybean. Policymakers may therefore need to consider ways to reduce the demand for oils more specifically and for unhealthy ultra-processed foods more broadly. The industry also needs to redouble its efforts to engage with global consumers in a constructive dialogue aimed at addressing its image problem and explaining the many benefits of its products (Reardon et al. 2019 ; Borrello et al. 2020 ). Oil palm crops face many other challenges, including emerging threats from climate change and the likelihood of new pests and diseases, that require more effective international collaboration. The influential players in the industry need to interact with the key organizations and countries now fully committed to reducing climate change. Nevertheless, new breeding technologies are providing the promise of improvements in some areas, such as much higher yielding varieties, improved oil profiles, enhanced disease resistance and modified crop architecture to enable mechanization of fruit harvesting.

Availability of data and materials

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Abbreviations

  • Basal stem rot

Fresh fruit bunches

Greenhouse gas

Genetic manipulation (via transgenesis)

Genome-wide association studies

Identity preserved

Life cycle assessment (or analysis)

Million tonnes

Quantitative trait locus

Roundtable on sustainable palm oil

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Applying mobility business intelligence concept in analyzing oil palm plantation productivity

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Andreas Wahyu Krisdiarto , Irya Wisnubhadra , Anzaludin Samsinga Perbangsa , Teddy Suparyanto , Bens Pardamean; Applying mobility business intelligence concept in analyzing oil palm plantation productivity. AIP Conf. Proc. 18 March 2024; 3026 (1): 050011. https://doi.org/10.1063/5.0199801

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The palm oil business employs almost 20 million people, generates USD 21 billion in revenue, and plays a vital role in Indonesia’s social economy. The Fresh Fruit Bunches (FFB) to Palm Oil Mills (POM) distribution system is one important aspect of fruit quality. Three steps are involved in getting Oil Palm FFB from the plantation to the POM. The first part of the procedure involves cutting FFB from the tree, the second stage involves gathering the fruit at a fruit collection point (FCP), and the third stage involves transporting the fruit to the palm oil mill (POM). As of now, the cost of the FFB transportation is still considerable, accounting for roughly 15% to 20% of the FFB pricing. The use of the Business Intelligence (BI) idea in the oil palm harvesting system is presented in this study as a foundation for creating web-based applications.

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How Much Does It Cost to Start a Profitable Palm Oil Plantation?

By alex ryzhkov, resources on palm oil plantation.

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Startup Costs

Introduction.

Palm oil is an essential ingredient in many food and personal care products. Its versatility has made it the most widely used vegetable oil globally, with its demand expected to rise in the coming years. According to a report by Grand View Research, the palm oil market size was valued at $38.6 billion in 2020 and is projected to reach $75.1 billion by 2028, growing at a CAGR of 8.1%.

As a result, entrepreneurs seeking to invest in the palm oil industry may be wondering how much it costs to open, start, or launch a plantation. Investing in a vertically integrated approach can lead to higher profits and better control over the supply chain, from planting to oil extraction and packaging. Incorporating sustainable and ethical practices into the business model can also positively impact the company's reputation and attract consumers and investors who are concerned about these issues.

However, before embarking on this journey, it is essential to consider the one-time costs associated with starting a palm oil plantation. The costs include items such as land acquisition, equipment, construction, transportation, hiring and training of workers, and legal and regulatory compliance expenses.

  • Land acquisition and preparation: Finding and purchasing suitable land for planting and preparing it for planting can be one of the most significant expenses associated with opening a plantation. The cost varies widely depending on location, size, and terrain.
  • Purchasing and installation of equipment for planting and harvesting: Investing in reliable equipment for planting and harvesting is critical to ensuring efficient operations and maximizing yields.
  • Construction of processing and packaging facilities: After harvesting, the palm fruit must be processed into oil and packaged. Building processing and packaging facilities is an essential expense to consider.
  • Purchase of vehicles for transportation of palm fruit: Depending on the location of the plantation, transportation of palm fruit from the field to the processing facility can be a significant expense. Investing in reliable vehicles can help optimize this process.
  • Implementation of sustainable and ethical practices, including certification: Incorporating sustainable and ethical practices into the business model may come with expenses such as certification fees and costs associated with adopting environmentally friendly practices.
  • Research and development for improving production and efficiency: To stay competitive, investing in research and development to improve production and efficiency may be necessary.
  • Hiring and training of workers: The success of any business relies on the quality of its employees. Investing in hiring and training may be necessary for the smooth running of the plantation.
  • Marketing and promotion expenses: A well-crafted marketing strategy is essential for gaining customers and ensuring that the products stand out in the crowded market.
  • Legal and regulatory compliance costs: Palm oil production is subject to a range of regulations for ensuring the safety of workers and the environment. Budgeting for legal and regulatory compliance costs is crucial.

Opening a palm oil plantation involves a considerable financial investment. Careful planning and budgeting for one-time costs are essential to ensure the success of the business. Keep in mind that the costs mentioned in this article could vary depending on location, the size of the plantation, and other relevant factors.

Be sure to consult with professionals, gather market data, and conduct thorough research before launching a palm oil plantation.

Starting a palm oil plantation is a substantial investment, requiring a large amount of capital. The cost to start a palm oil plantation depends on several factors such as the size and location of the plantation and the adoption of sustainable and ethical practices. Here are the average startup costs associated with opening a palm oil plantation:

It is essential to note that these costs are rough estimates and may vary depending on individual factors such as location, size, and market demand. Starting a palm oil plantation with a vertically integrated approach can be a lucrative business if sustainable and ethical practices are adopted. Investing in factors such as research and development for improving production and efficiency can lead to long-term benefits and profits.

1. Land acquisition and preparation

Land acquisition is the most important aspect when starting a palm oil plantation. The cost of land is a significant investment that will determine the success of the plantation. According to industry experts, the cost of acquiring land for a palm oil plantation can range from $5,000 to $40,000 per hectare depending on location, soil quality, terrain, and accessibility.

The preparation of the land involves clearing the land of any vegetation, roots, or debris. This process can be done manually or by using heavy machinery. The cost of land preparation ranges from $500 to $2,500 per hectare. In certain cases, land preparation can incur additional costs, such as drainage systems, fencing, and irrigation systems, that can cost between $1,000 to $5,000 per hectare.

Furthermore, the cost of obtaining the necessary licenses and permits for the plantation can vary depending on the country or state. In the US, the cost of obtaining the necessary permits and licenses for land acquisition and preparation can range from $200 to $2,000 .

In summary, the cost of acquiring land and preparing it for the palm oil plantation can range from $6,700 to $47,500 per hectare, depending on location, soil quality, terrain, and accessibility. Additionally, obtaining permits and licenses can incur additional costs.

  • The cost of acquiring land: $5,000 to $40,000 per hectare
  • The cost of land preparation: $500 to $2,500 per hectare
  • The cost of additional infrastructure: $1,000 to $5,000 per hectare
  • The cost of permits and licenses: $200 to $2,000

2. Purchasing and Installation of Equipment for Planting and Harvesting

The cost of purchasing and installing equipment for planting and harvesting is a significant expense when starting a palm oil plantation. On average, the cost of purchasing and installing a complete set of equipment for one hectare of land can range from $5,000 to $10,000 . This includes the necessary machinery such as bulldozers, tractors, plows, and seed planters.

In addition to the initial investment in equipment, ongoing maintenance and repairs should also be considered. The cost of maintaining machinery can range from $500 to $1,000 per hectare per year. This includes regular servicing, oil changes, and replacing worn or broken parts.

It is important to note that the cost of purchasing and installing equipment can vary based on the size of the plantation. Larger plantations may require more machinery, resulting in higher costs. On the other hand, smaller plantations may have the option to rent or lease equipment instead of purchasing it outright. Renting can be a cost-effective option for those not wanting to invest a large sum of money upfront.

  • For example, a small plantation may choose to rent a bulldozer for a few days when clearing land at a cost of $500 per day instead of purchasing a bulldozer for $50,000 .

When purchasing or renting equipment, it is important to consider the quality of the machinery. Investing in high-quality equipment may come with a higher price tag, but it can result in long-term cost savings due to lower maintenance and replacement costs.

In conclusion, purchasing and installing equipment for planting and harvesting is a significant expense when starting a palm oil plantation. The cost can range from $5,000 to $10,000 per hectare of land, with ongoing maintenance costs of $500 to $1,000 per hectare per year. However, renting or leasing equipment can be a cost-effective option for smaller plantations, and investing in high-quality machinery can lead to long-term cost savings.

3. Construction of processing and packaging facilities

One of the critical aspects of a vertically integrated palm oil plantation is the construction of processing and packaging facilities. These facilities are essential for extracting the oil from the fresh fruit bunches and converting it into a viable product for distribution.

The construction of a processing plant is a significant investment for any palm oil plantation. Depending on the size of the operation and the level of automation required, the construction costs can range from $10 million to $50 million or more. This cost is influenced by various factors, such as location, labor costs, and machinery costs.

In addition to processing facilities, packaging facilities are essential for ensuring the product's quality and safety during transportation and storage. The cost of building a packaging facility can range from $2 million to $10 million or more, depending on the level of automation, capacity, and material handling systems required.

When constructing processing and packaging facilities, it is essential to consider various factors that can affect the business's profitability. For example, the utilization rate of the facilities should be maximized through efficient scheduling and management to minimize costs and reduce waste.

In conclusion, the construction of processing and packaging facilities is a significant investment for any vertically integrated palm oil plantation. However, this investment can lead to increased profits through cost savings, increased control over quality, and compliance with ethical and sustainable practices. It is essential to consider the various factors that influence the construction cost and operations to ensure a successful and profitable business model.

  • Examples of factors that can affect the construction cost of processing and packaging facilities are:
  • Labor costs
  • Machinery costs
  • Level of automation required
  • Capacity of the facilities

4. Purchase of vehicles for transportation of palm fruit

According to the latest statistical information, the cost of purchasing vehicles for transportation of palm fruit can range from $50,000 to $150,000 per vehicle. This cost can vary depending on the size, type, and quality of the vehicle, as well as any additional features or modifications needed to ensure the safe and efficient transport of the palm fruit.

It is important to invest in reliable and high-quality vehicles that can withstand the demands of transporting large volumes of palm fruit from the plantation to the extraction site. This includes trucks with sturdy and durable designs, as well as sufficient capacity to carry the weight of the palm fruit.

In addition to the cost of the vehicles themselves, it is important to factor in ongoing maintenance and repair expenses, as well as insurance and licensing fees. These costs can add up over time and should be accounted for in the overall budget for the palm oil plantation.

One strategy to reduce costs associated with purchasing vehicles for transporting palm fruit is to consider buying used vehicles instead of new ones. However, caution must be taken to ensure that the used vehicles are in good condition and can be trusted to function reliably over time.

Another option is to lease vehicles instead of purchasing them outright. This can provide flexibility in terms of swapping out vehicles as needed and can reduce the financial burden associated with purchasing and maintaining an entire fleet of vehicles.

  • Important point: The cost of purchasing vehicles for transportation of palm fruit can range from $50,000 to $150,000 per vehicle.
  • Important point: Ongoing maintenance and repair expenses, insurance, and licensing fees should be factored into the budget for the palm oil plantation.
  • Example: A palm oil plantation may choose to purchase five trucks at a cost of $100,000 each, for a total cost of $500,000, plus ongoing maintenance and insurance expenses.
  • Example: Another option might be to lease a fleet of vehicles for a monthly fee, which could help to reduce upfront costs and provide greater flexibility in terms of swapping out vehicles as needed.

5. Implementation of sustainable and ethical practices, including certification

As mentioned earlier, the adoption of sustainable and ethical practices in palm oil production is becoming increasingly important to consumers and investors. Implementing these practices not only helps to protect the environment and the local communities, but also plays a crucial role in meeting the increasing demand for sustainable products.

One of the major costs involved in implementing sustainable and ethical practices is obtaining certification. The Roundtable on Sustainable Palm Oil (RSPO) is the largest certification scheme for sustainable palm oil, and the cost of certification varies depending on the size of the plantation and the scope of the certification.

According to latest statistics, the cost of RSPO certification for a small palm oil plantation (less than 500 hectares) ranges from $3,000 to $5,000, while a medium-sized plantation (500-5,000 hectares) can cost between $10,000 and $20,000. For a large plantation (over 5,000 hectares), the cost can exceed $50,000.

Another cost associated with implementing sustainable and ethical practices is the cost of implementing these practices themselves. This can include measures such as using environmentally friendly fertilizers and pesticides, reducing greenhouse gas emissions, and protecting the rights of workers and local communities.

However, it is important to note that implementing sustainable and ethical practices can also provide long-term benefits, such as increased efficiencies, improved reputation and brand value, and access to new markets.

One example of a company that has successfully implemented sustainable and ethical practices in its palm oil production is Unilever. The company has committed to sourcing only sustainable palm oil by 2020, and has also established partnerships with local farmers to promote sustainable practices and protect the rights of workers and local communities.

  • Small plantation (less than 500 hectares): $3,000 - $5,000
  • Medium-sized plantation (500-5,000 hectares): $10,000 - $20,000
  • Large plantation (over 5,000 hectares): $50,000+

6. Research and development for improving production and efficiency

Research and development (R&D) is an essential aspect of any industry, and the palm oil plantation business is no exception. Investing in R&D can lead to the development of new technologies, tools, and techniques that can improve productivity, efficiency, and sustainability. The cost of R&D for a palm oil plantation business can vary depending on the scope and nature of the projects involved.

According to recent statistics, the average cost of R&D in the agriculture and forestry industry is around $300,000 per year. However, this figure can be much higher for large-scale palm oil plantation businesses that undertake significant R&D projects. For example, a study published by the International Journal of Business and Management estimated that the cost of R&D for a vertically integrated palm oil company in Indonesia could reach up to $20 million per year.

Despite the high costs involved, investing in R&D can bring long-term benefits to the business. For instance, new research could lead to the development of more efficient equipment and machinery for the plantation, resulting in increased productivity and reduced labor costs. Additionally, R&D can help to identify more sustainable and eco-friendly production methods to meet the growing demand for ethically produced palm oil.

One example of successful R&D in the palm oil industry is the development of the 'Zero Waste to Landfill' program by a leading palm oil producer in Malaysia. The program aimed to reduce the amount of waste generated by the plantation and increase the recycling and reuse of materials. As a result, the company was able to achieve a 96% reduction in waste sent to the landfill, resulting in significant cost savings.

Another area of R&D that is increasingly important in the palm oil industry is the development of precision agriculture techniques. These techniques involve the use of sensors, drones, and other technologies to monitor crop growth and health, enabling farmers to make data-driven decisions about irrigation, fertilization, and pest control. By adopting precision agriculture techniques, palm oil plantation businesses can improve crop yields, reduce water usage, and minimize the use of harmful chemicals, resulting in cost savings and improved sustainability.

  • Investing in R&D is essential for improving productivity, efficiency, and sustainability in palm oil plantation businesses.
  • The cost of R&D can vary depending on the size and scope of the projects involved, with some large-scale companies spending millions of dollars per year.
  • Examples of successful R&D projects in the palm oil industry include the 'Zero Waste to Landfill' program and the development of precision agriculture techniques.

7. Hiring and Training of Workers

When starting a palm oil plantation, one of the most significant costs will be hiring and training workers to maintain and operate the plantation.

According to the latest statistical information, the average cost of hiring and training a worker in the agricultural industry in the US is approximately $15,000 per worker per year . This cost includes not only the recruitment and hiring process but also the cost of training, salaries, benefits, and employee turnover.

It is important to find workers who have experience in the agricultural industry and can handle the physical demands of working on a plantation. To attract and retain the best workers, it is essential to offer competitive wages and benefits, such as health insurance, retirement plans, and paid time off.

In addition to hiring experienced workers, it may also be necessary to provide additional training to ensure that all employees understand the proper methods of planting, harvesting, and maintaining the palm trees. This training may include classroom instruction as well as hands-on experience in the field. The cost of providing this training can vary widely, depending on the length and content of the program.

It is also important to invest in the safety of workers by providing proper protective gear and ensuring that all equipment is well-maintained and in good working order. This investment not only protects employees from injury but also reduces the risk of costly lawsuits and fines for non-compliance with safety regulations.

Finally, it is crucial to have a strong management team that can effectively lead and motivate workers to ensure that the plantation runs smoothly and efficiently. The cost of hiring and training these managers can be significant, but it is essential for the long-term success of the plantation.

  • Offering competitive wages and benefits is essential to attracting and retaining the best workers
  • Additional training may be necessary to ensure that all employees understand the proper methods of planting, harvesting, and maintaining palm trees
  • Investing in the safety of workers reduces the risk of injury and costly lawsuits or fines
  • A strong management team is essential for the long-term success of the plantation

8. Marketing and promotion expenses

Marketing and promotion expenses are an essential aspect of any successful business. It involves all the money which a company spends to create awareness of its products or services to the consumers. It includes various activities such as advertising, public relations, sales promotions, and personal selling, etc. According to the latest statistical information, the cost of marketing and promotion expenses for a palm oil plantation can range from $20,000 to $100,000 annually, depending on the scale and reach of the business.

One of the significant expenses of marketing and promotion in a palm oil plantation is advertising. It involves various channels such as television, radio, billboards, and digital media to reach out to the target market. The cost of advertising can be high initially, but it is a long-term investment that can yield profitable results. A palm oil plantation can invest in creating a brand identity by using a unique logo, website, and social media presence.

Another expense in marketing and promotion is public relations. It is about building a positive image for the business to generate goodwill and attract potential investors. A palm oil plantation can participate in community events, charity drives to establish and maintain a good reputation in the market. These initiatives can increase customer loyalty and differentiate the business from its competitors.

Sales promotions, such as discounts, coupons, and contests, are also an effective tool for increasing sales and attracting customers. These promotions can be especially useful for palm oil plantations looking to market their products to retail stores or distributors. By offering promotions, businesses can encourage consumers to buy more products and generate word-of-mouth advertising.

  • Examples of marketing and promotion expenses for a palm oil plantation:
  • Advertising: $20,000
  • Public relations: $10,000
  • Sales Promotions: $15,000
  • Website and Social Media: $5,000
  • Trade Shows and Exhibitions: $20,000
  • Total: $70,000

In conclusion, marketing and promotion expenses are a necessary aspect of any successful palm oil plantation business. By investing in marketing, businesses can increase brand awareness, generate leads, and ultimately increase sales. It is important to allocate a budget for marketing and promotion expenses and track the results to determine the return on investment.

9. Legal and regulatory compliance costs

Opening a palm oil plantation requires compliance with various legal and regulatory requirements, which can result in significant costs. For instance, obtaining permits and licenses from the relevant authorities, such as the USDA and EPA, to start operations may involve several fees, which can range from $2,000 to $10,000 . It is important to budget for these costs to ensure smooth operations and avoid penalties and legal issues.

Another regulatory cost is related to environmental assessments that are required to evaluate the impact of the plantation on the surrounding area, ecosystems and wildlife. These assessments can be costly, and their scope may vary depending on the size and location of the plantation. According to recent statistics, conducting such assessments could range from $10,000 to $100,000 depending on the size and complexity of the project.

Furthermore, compliance with labor laws and regulations is critical to avoid penalties and lawsuits that can harm the business's reputation and finances. The Fair Labor Standards Act (FLSA) sets minimum wage and overtime requirements for employees, which can be costly for the business. For instance, the current federal minimum wage is $7.25 per hour , and employers must pay overtime to non-exempt employees who work for more than 40 hours per week at a rate of one and a half times their regular pay. Failure to comply with these regulations could result in fines, back pay, and legal fees.

Lastly, it is essential to mention the costs associated with complying with sustainability and ethical standards in palm oil production. Consumers and investors are becoming increasingly aware of the environmental and social impacts of palm oil production. Therefore, certification by organizations such as the Roundtable on Sustainable Palm Oil (RSPO) is becoming essential to demonstrate a commitment to ethical and sustainable practices. According to recent data, the cost of RSPO certification ranges from $3,000 to $10,000 annually .

  • Obtaining permits and licenses: $2,000 to $10,000
  • Environmental assessments: $10,000 to $100,000
  • Labor laws and regulations compliance: $7.25 per hour plus overtime pay
  • Sustainability and ethical standards compliance: $3,000 to $10,000 annually for RSPO certification

In conclusion, legal and regulatory compliance costs are an unavoidable aspect of starting a palm oil plantation. Business owners need to budget for these costs to avoid penalties and legal issues in the long run.

Opening a palm oil plantation requires a significant financial investment, but a well-planned and executed business model can lead to high profits and market success. The total cost of opening a plantation can vary depending on location, plantation size, and other relevant factors.

The cost of land acquisition and preparation, equipment purchasing and installation, processing and packaging facilities construction, vehicles for transportation, sustainable and ethical practices implementation, research and development, worker hiring and training, marketing and promotion expenses, and legal and regulatory compliance expenses, are some major one-time costs that need to be considered before venturing into the palm oil industry.

According to a report by Grand View Research, the global palm oil market size was valued at $38.6 billion in 2020 and is expected to reach $75.1 billion by 2028. This shows the potential for entrepreneurs to invest in the palm oil industry, but they need to take careful steps to ensure a profitable future.

One way to ensure success is to adopt a vertically integrated approach to the business model, owning and operating all aspects of the supply chain. This leads to increased control over quality, production, and distribution and may lead to cost savings and higher profits. Additionally, incorporating sustainable and ethical practices into the business model is becoming increasingly important, attracting customers and investors who are concerned about environmental responsibilities.

Careful planning and budgeting for one-time costs are crucial for the success of a palm oil plantation. Consult with experts, gather market data, and conduct thorough research before launching your plantation. Remember, the initial costs may be high, but investing in quality operations and sustainability practices will pay off in the long run.

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Several glass jars with dark blue lids are connected by a tangle of blue, red and white tubes atop a steel colored platform.

They Want to Make Palm Oil in a Lab. Without Palm Trees.

Palm oil. It’s in your snacks, your soap, pretty much everything. But palm oil plantations have caused vast deforestation. Can these three tech executives help fix things?

At a lab in the New York City neighborhood known as Hell’s Kitchen, a palm oil substitute is concocted. Credit... Sara Naomi Lewkowicz for The New York Times

Supported by

Dionne Searcey

By Dionne Searcey

  • Published March 9, 2024 Updated March 14, 2024

A handful of startups are trying to reinvent one of the most ubiquitous, but also environmentally destructive , ingredients in our diets: palm oil.

Palm oil is in bread, instant noodles, Girl Scout cookies, lipstick, Nutella and ice cream, to name a few. People around the world use it to cook daily. But to make all of that oil, endless miles of rainforests worldwide — regions along the Equator vital to biodiversity and the fight against climate change — have been flattened and burned and turned into palm oil plantations. That’s had deadly consequences for species like orangutans in Indonesia .

The new companies are taking their tech out of the lab and into real products. The material is made by fermentation (think breweries producing oils rather than beer) and isn’t approved for food yet. But it’s starting to show up in things like cosmetics.

A row of packaged consumer products including Starburst candies, Snack Pack puddings, Ritz cracker snacks, Natural Jif  peanut butter, and chocolates.

These startups face an uphill fight. The world is so awash in palm oil made the usual way, by growing palm trees, that it’s relatively inexpensive to buy.

Food companies that use palm oil say they are trying to do better and have pledged to create more sustainable supply chains. However, while making a substitute in a lab may be less labor-intensive than razing forests and nurturing millions of trees, to compete on price and volume the startups will need access to huge manufacturing facilities. For now, the startups said, the products they’re selling are still more expensive.

I spoke to leaders of three companies: Thomas Kelleher, chief executive of Xylome , maker of Yoil; Shara Ticku, chief executive and co-founder of C16 Biosciences , which makes Palmless (and counts Bill Gates as an investor); and Chris Chuck, co-founder of U.K.-based Clean Food Group .

Here are their lightly edited answers.

How is your product made?

SHARA TICKU We make an oil that looks and functions just like a palm oil, but we make it from yeast, not from trees. We think of it as bio-designed. It is natural. It’s grown in a lab, only the way beer or wine is grown in a lab.

CHRIS CHUCK We can take food waste, a carbohydrate source, and process it very simply and then feed that to the yeast.

TOM KELLEHER These yeast, if you overfeed them with a lot of sugar, they put on fat. We overfeed them and they swell into a round ball that is almost entirely oil.

What motivated you to start your company?

TICKU I saw what was happening when I was in Singapore about 10 years ago. Smoke from Sumatran forest fires came to Singapore and made the air toxic. To make more palm oil requires totally changing what the planet looks like.

CHUCK Besides deforestation, the population is growing, and we’re not just getting more and more people on the planet, but also we have growing middle-class populations in India and China, which are demanding more wide-ranging, nutritious products.

Will people go for it?

TICKU Component parts of our oil all exist in the human diet today. We have to go through stages of approval with the Food and Drug Administration. And regulatory approval means it’s safe for large-scale consumption.

Besides regulatory approval, what are the other hurdles to selling this?

KELLEHER We need to make at least 100,000 gallons per fermenter, and dozens and dozens of them. There’s a limited number of companies in the world that have that capability. We are actively seeking a strategic partnership with at least one company that is capable of the manufacturing scale and who is already familiar with the palm oil business.

CHUCK We’re talking about very large factories. For us, we can retrofit existing equipment like the kind you find in a brewery. Then, you can scale up quickly.

What other uses do you envision for the technology?

KELLEHER I’d like to see us have an alternative for fish oils, for shea butters, and we have a way to do that using the yeast platform we’re working with. We’re already developing a fish oil replacement.

TICKU We’re working with food manufacturers to find out how our oil can make their products better. We can, for example, make alternative cheese better. Our oil can help it melt better.

CHUCK We’re trying to develop a new technology to try to curb the growth of the edible oil sector generally. There are differences between us and the other companies, but it’s not winner takes all. This is bigger than one company. We have to solve a major, major challenge of the 21st century.

Dionne Searcey is a Times reporter who writes about how the choices made by people and corporations affect the future of the planet. More about Dionne Searcey

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Johari: Palm oil industry players need to increase FFB yields

  • Commodities

Thursday, 14 Mar 2024

Related News

Beijing’s robust commodity imports confound weak economy

Beijing’s robust commodity imports confound weak economy

Cimb islamic and petronas sign inaugural tahawwut master agreement for islamic commodity derivatives, commodity demand echoes in bhp results.

Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani.

KUALA LUMPUR: Industry players and smallholders need to increase the production of fresh fruit bunches (FFB) and crude palm oil (CPO) to maintain the relevance of the Malaysian palm industry, said Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani.

He said the government would not open new plantation areas but instead would focus on efforts to increase the yields.

"If we can achieve an FFB yield of 18 tonnes per hectare, this industry can produce 20.5 million metric tonnes of CPO, an increase of two million metric tonnes from 18.5 million metric tonnes last year,” he said in winding up the debate on the Motion of Thanks on the Royal Address for his ministry in the Dewan Rakyat today.

Johari said among the driving factors towards this achievement were the right replanting schedule at the recommended rate of four to five per cent, sufficient manpower and optimal farm management.

In addition to the use of proven quality palm seeds, scheduled fertilisation as well as disciplined, continuous replanting, he said optimal farm management also involves the appropriate specialisation.

The ministry also encourages mechanisation for tasks such as arranging fronds and FFB, collecting loose fruits and moving FFB to the roadside.

"For every 100 plantation workers, 50 are harvesters. Therefore, we must ensure that every oil palm plantation has sufficient harvesters to operate at optimum capacity," he added. - Bernama

Tags / Keywords: Palm oil , FFB , CPO , Johari Abdul Ghani , plantation

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Moscow's High Rise Bohemia: The International Business District With No Business

oil palm plantation business plan

  • Written by Dario Goodwin
  • Published on March 17, 2015

The Moscow International Business Center (Also known as Moskva-City ) was meant to be Russia ’s ticket into the Western world. First conceived in 1992, the district at the edge of Moscow’s city center is intended to contain up to 300,000 inhabitants, employees and visitors at any given moment and, when completed, will house over 4 million square meters of prime retail, hotel and office space to create what the Russian government desired most from this project: an enormous financial district that could dwarf London’s Canary Wharf and challenge Manhattan . Twenty three years later though, Moscow-based real estate company Blackwood estimates that as much as 45% of this new space is entirely vacant and rents have plummeted far below the average for the rest of Moscow. The only press Moskva-City is attracting is for tenants like the High Level Hostel , a hostel catering to backpackers and other asset-poor tourists on the 43rd floor of the Imperia Tower , with prices starting at $25.50 for a bed in a six-person room. This is not the glittering world of western high finance that was envisioned back in the post-Soviet 90s; but what has it become instead?

oil palm plantation business plan

As one might expect from a project of this sheer ambition, Moskva-City has a troubled past. The economic crash in 2008 hit Russia hard enough to evict the previous Mayor of Moscow , Yuri Luzhkov, who had been a cheerleader for the district, and replace him with the considerably more austere Sergei Sobyanin, who famously declared that the whole idea was an “urban planning mistake.” But as recently as 2013, the Wall Street Journal was triumphantly claiming that Moskva-City had risen from the dead, citing 80% occupancy rates and glowing quotes from industry insiders claiming that Moskva-City was the "place to be." Driven by record highs in oil prices, Moscow looked poised to become the next Dubai .

Instead, Moscow is now in the grip of an economic winter prompted by western sanctions and drops in the price of oil. The large financial groupings that Moskva-City was meant to shelter have been warned off by their inability to issue credit to international markets, for example - but Moskva-City isn’t just an Empire State Building left empty by the Great Depression.

A fundamental problem that is holding Moskva back compared to the rest of Moscow is the simple fact that currently, getting to Moskva-City is nigh-on impossible at peak hours. Moscow has long been plagued with transport problems, ever since the government failed to match the dramatic expansion of the city with a dramatic expansion of the transport system after the Second World War. Despite being only 2.5 miles from the Kremlin , Moskva-City is only just inside the ring road that bounds the city center and which acts as the only real transport link to it (and as a result, is clogged by construction vehicles.) A railway and metro hub has been finished, but so far only runs a one-stop shuttle service to the closest Metro station that is actually integrated with the rest of Moscow Metro. The isolation of the outer districts is a large, negative part of the Moscow psyche, and it’s not surprising that this is driving away the globetrotting financial elite this project was meant to attract.

oil palm plantation business plan

The project is managed by architectural practice No.6, which is a constituent part of the large Moscow based practice Mosproject-2 , which is itself a public corporation headed up by Mikhail Vasilyevich Posokhin, who is apparently the “People’s Architect of Russia.” Despite all this state involvement, the project has still managed to become bogged down in bureaucratic infighting - each lot is managed and developed individually, which has led to developers competing for occupants by slashing rates.

Much has been written about the way modern financial districts and towers that inhabit them can be unwelcoming, forbidding or even hostile by design, but the skyscrapers of Moskva-City seem even less friendly than usual. The site - a former stone quarry, chosen out of necessity as the only place in the city center where a new district could be plausibly constructed - is isolated both physically and visually, leaving the cluster a stark anomaly on the city skyline. Even the names seem more imposing than optimistic now: Imperia, City of Capitals , Steel Peak.

oil palm plantation business plan

The Mercury City Tower , so far the tallest completed building on the site, is officially “a strong reference to Russian constructivism, [which] gives the tower a strong vertical thrust similar to the one found in New York's Chrysler building .” It would be easy to criticize the Mercury City Tower for picking ‘inspirations’ that are so totally opposed to each other - The Chrysler building the defining emblem of American pre-crash confidence and Constructivism created with the express purpose (especially architecturally) of extending the Bolshevik revolution into a social revolution - but the way they smash those two inspirations together is almost beautifully ironic.

oil palm plantation business plan

Even though the High Level Hostel is less an asset to a financial district than it is a PR problem, it’s been a huge success since opening in September, already ranked 27th out of 766 hostels in Moscow by TripAdvisor. According to the management agency for Moskva-City , 58% of the new occupant signings this year have been non-financial, including a number of small to medium size businesses. Other areas of office space have been occupied by a restaurant and a culinary school, while another space has been redeveloped into a 6,000 seat theater.

While Moskva-City is failing to be a financial district that could take on the world, it’s inadvertently becoming a humanized space catering to the very groups that the Russian economic miracle left behind. Taking advantage of rents lower than the rest of Moscow , the world class facilities and the sheer desperation of the developers, the humanization of Moskva-City could well create the world’s first high-rise bohemia.

oil palm plantation business plan

Of course, these are not spaces designed for a community, or even for people: these are spaces designed for money, and there’s little scope for changing something that seems so baked into the design of Moskva-City . The High Level Hostel is trading off of the irony of being a hostel in a banking tower, but it’s perfectly possible that at some point people will no longer find this joke funny (especially in a building that seems hostile to the very idea of humor). The isolation of Moskva, even though it allowed this community to spring up in the first place, is just as detrimental to a humanized district as it is to a financial one: even bohemians need to move around the city, or the district risks becoming a black-spot instead of a hot-spot.

Moskva-City’s isolation won’t last forever. The end of construction will open the roads up to traffic, and plans to properly integrate the spur lines of the Metro in this area into the wider system are well under way. The integration of the district will inevitably push up rents, and the Russian economy will eventually boom once again. When that happens, Moskva-City is prime territory to be reconquered by the giants of international finance, and it seems unlikely that the municipal or national governments would want to step in to protect this accidental district. For now, though, the towers capture perfectly this moment of Russia ’s schizophrenic understanding of its place in the world.

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Moscow-City – The Moscow International Business Center

  • 3 years ago

The Moscow Intenational Business Center

Moscow-City is an iconic location for life and work in Russia’s capital. Enormous skyscrapers, business centers, the best restaurants and retail spaces – all this is concentrated in one place. The ultramodern Moscow-City towers are truly striking in their outward appearance, and the layout of the apartments inside and the fantastic views that can be seen from the higher floors are nothing short of impressive.

This skyscraper compound, often referred to as Moskva-City, is the Russian take on Manhattan, where businessmen strike multi-million dollar deals daily while ordinary life goes on next door. Its state of the art spaces offer the ultimate convenience. The infrastructure of this business district is so well-developed that anyone can find something interesting for themselves here: from residential apartments to boutiques, clubs, exhibitions and more.

When the foundations for the Moscow-City skyscrapers were laid, a special kind of concrete was used, the properties of which are amplified by many times compared to standard concrete. Even in the event of a plane crashing into one of the buildings, the structural integrity of the towers will be preserved.

The architects of the Moscow-City Business Center have created a unique locality that has integrated into itself the hub of the capital’s business life and a whole ensemble of historical monuments. Anyone can admire the beauty of these skyscrapers from within or without the compound. There are also a number of apartments for sale or rent available in the MIBC itself. But first, let’s have a look at some more interesting facts about the financial core of Russia’s capital.

  • 1 How It All Began
  • 2.1 Moscow-City Central Core
  • 2.2 Tower 2000
  • 2.3 Evolution Tower
  • 2.4 Imperia Tower
  • 2.5 Moscow Tower and St. Petersburg Tower
  • 2.6 Steel Peak Tower
  • 2.7 Federation Tower
  • 2.8 Mercury City Tower
  • 2.9 OKO Tower Complex
  • 3.1 Afimall City Shopping Center
  • 3.2 Bagration Bridge
  • 3.3 Expocentre Fairgrounds
  • 4 Renting and Buying Real Estate in Moscow-City

How It All Began

The history of Moscow-City goes all the way back to 1992. The government of Moscow at the time wanted to bring into existence its own skyscrapers like the ones in London or New York. And the idea caught on. In 1992 the project for the construction of the huge “Moscow-City” MIBC compound was enthusiastically approved, kick-starting the painstaking preparatory works. The original intention was that the skyscrapers would only house office space. However, as time went on, the towers began to welcome in ordinary residents who wanted to live on the territory of this business and finance hub.

Moscow-City is undoubtedly a city within a city. Its grandeur is mind-boggling. It is perfect in every way: from location to infrastructure. And today, anyone can get a feel of the atmosphere of the “capital city” of Russia’s business world – many of the apartments in Moscow-City are available for rent. Any citizen of Russia and even nationals of other countries can make use of these offers.

What It’s Like in 2021

Today Moscow-City is not just a magnificent and fascinating sight, but also a real hub for the work, life and leisure of thousands. Its infrastructure is organized in such a way that there is no need to leave the territory of the “city within a city” at all. This business district contains everything one may need for work and recreation. And if one does decide to venture out into the larger metropolis, the MIBC’s three subway stations make this remarkably simple to do.

Moscow-City stands on the Presnenskaya Embankment . Each of the buildings in the district has a name, which simplifies its identification. Some of the buildings form complexes that are united under one name, such as the Neva Towers and the Naberezhnaya Tower complex of two skyscrapers and one high rise. There are a total of 16 towers in the MIBC, of which the most popular are:

  • Moscow-City Central Core;
  • Tower 2000;
  • Evolution Tower;
  • Imperia Tower;
  • City of Capitals (Moscow Tower and St. Petersburg Tower);
  • Steel Peak Tower;
  • Federation Tower;
  • Mercury City Tower;
  • OKO Tower Complex.

Moscow-City Central Core

This is the most complex building within the MIBC compound. Its total floor area is a whopping 1 476 378 sqft (450 000 m²). It consists of two massive parts, each of which boasts a truly impressive infrastructure. The underground part includes 3 Moscow Metro stations, a parking lot for automobiles and a shopping mall. The aboveground part houses a concert hall and a hotel.

Tower 2000 is a skyscraper having 34 stories. Its total floor area is 200 318 sqft (61 057 m²), most of which is office space. The key feature of this skyscraper is its direct connection to the Bagration Bridge, which has its own shopping arcade. The tower has everything one may need while working here, including a large parking lot and several restaurants.

Evolution Tower

This elegant structure is 836 feet (255 m) high – that’s a whole 54 stories! The total floor area here is 554 462 sqft (169 000 m²). The Evolution Tower’s key feature is that it has its own Wedding Hall. This skyscraper houses large office spaces, a parking lot and several restaurants.

Imperia Tower

MIBC’s Imperia Tower is the undeniable focal point of the MIBC’s business life. Its height is 784 feet (239 m), which means one can hold conferences and resolve key business matters on the 59 th floor! And that really is amazing! The tower has everything: offices, hotels, restaurants and parking lots. But if you want a truly unforgettable experience, visit the viewing platform! It is situated on the 58 th floor and a simply astounding view of Moscow can be seen from it.

Moscow Tower and St. Petersburg Tower

The Moscow and St. Petersburg Towers are the chief representatives of the MIBC. The Moscow Tower has 76 stories and is 990 feet (302 m) high, while the St. Petersburg Tower has 65 stories and stands 843 feet (257 m) tall. Both towers offer fantastic views of the capital city.

Most of the floors of these two skyscrapers are taken up by luxurious sky apartments. There are also several recreational and entertainment centers, office spaces, restaurants, etc.

Steel Peak Tower

Also known as the Eurasia Tower of Moscow-City, this supertall skyscraper has a total of 680 912 sqft (207 542 m²) of floor space. Most of this is taken up by offices, and the rest – by residential quarters (around 65 616 sqft or 20 000 m²). The tower also houses a number of the greatest restaurants, studios and shopping centers.

Federation Tower

The Federation Tower is a complex of two skyscrapers, known as Tower East and Tower West. Tower East is the second highest building in Europe (the first is a skyscraper recently erected in the city of St. Petersburg). Its height is a colossal 1 223 feet (373 m) and that makes 95 stories! Tower West, on the other hand, is noticeably shorter at 794 feet (242 m).

The Federation Tower is a multifunctional complex.

Mercury City Tower

The Mercury City Tower skyscraper is widely known as one of the tallest buildings in Europe. Its height is 1 112 feet (339 m) and it has 75 stories. It is multifunctional by concept, holding within its walls shopping centers, offices and all kinds of other spaces. It is also possible to rent apartments here.

OKO Tower Complex

The OKO Tower Complex consists of two towers – the North Tower (49 stories and 803 ft or 245 m in height) and the South Tower (85 stories and 1 155 ft or 352 m in height).

Each of the MIBC’s tower complexes has its own recreational and entertainment areas, restaurants and parking lots. The top floors of most of these buildings contain luxurious fully-furnished apartments. At night, the towers shine with bright lights, while inside them the panoramic windows reveal astounding views of Moscow. This breathtaking view of the capital of Russia is why visiting Moscow-City is a must!

What Not to Miss

There are many interesting landmarks within the Moscow-City compound, but three of them are truly deserving of special attention:

  • The Afimall City Shopping Center;
  • The Bagration Bridge with two galleries and a shopping arcade;
  • The Expocentre Fairgrounds.

Afimall City Shopping Center

The Afimall City Shopping and Entertainment Center is located in Moscow-City’s Central Core. It is divided into 4 zones, each with its own theme – one for every season of the year. The shopping center houses the biggest indoor fountain found worldwide. The height of this watery wonder is 118 feet or 36 meters.

The shopping and entertainment center contains everything one might expect from one of the largest centers of its kind:

  • Retail brand stores;
  • Exhibitions;
  • Game rooms;
  • and Restaurants.

The main recreational space is roofed with a giant transparent dome, which is an impressive sight to behold.

Bagration Bridge

Bagration Bridge with its upper and lower galleries has a shopping center all of its own and was the first structure to be built as part of the Moscow-City business district. Its lower gallery is a shopping arcade and its upper gallery is an open-air viewing platform with a spectacular view of the MIBC and the Moskva River. The hall of the bridge houses the 23 foot tall sculpture called “Tree of Life”. Having gone through the bridge via either one of its two galleries, a pedestrian would find themselves standing right on the Kutuzovsky Prospekt.

Expocentre Fairgrounds

The Expocentre Fairgrounds exhibition venue is located at the very heart of the capital. The first exhibition held at the Expocentre happened all the way back in 1959, much earlier than the MIBC was erected. Today it is the venue of many interesting events.

Exhibitions with very diverse themes are regularly held at this complex. An up-to-date schedule can be found on the official webpage of the Expocentre. The events can be free or fixed-price entry, depending on their type.

Renting and Buying Real Estate in Moscow-City

Moscow-City is not only a work and business hub, but also a residential neighborhood. Any citizen of Russia can rent or buy apartments or elite sky lounges here. The variety of residential real estate available inside the skyscrapers is impressive, including options for any pocket. The following buildings in the MIBC contain residential blocks:

This skyscraper has a mirror glass façade which reflects the passing clouds. Just imagine how beautiful that looks! Anyone can buy an apartment in the Federation Tower. Such properties are not only a good investment, but also a mark of prestige. The average price of residential real estate here is 45 million rubles for an apartment with a total floor area of 334 sqft (102 m²). The average price of a square meter (3.28 square feet) is in the range of 650 to 700 thousand rubles. There are two- and three-room apartments available in the Federation Tower, each with its own loggia. As for rent, the minimum price of one month’s stay in a three-room apartment in this skyscraper is 300 000 rubles per month.

The Mercury City Tower skyscraper welcomes citizens from all parts of Russia. This building is no less tall than the world-famous Dubai skyscrapers. Living in its apartments is a delight. The minimum cost of an apartment in the Mercury City Tower is 75 million rubles. The average price of a square meter (3.28 square feet) is 800 thousand rubles. And for those looking for a lower price point, some of the properties are also available for rent – in this case you will pay a minimum of 250 thousand rubles per month.

The Imperia Tower is a key cluster of interesting offers. The best options for buying and renting apartments within the MIBC can all be found in this skyscraper. The lowest price of a residential apartment here is 40 million rubles. A square meter (3.28 square feet) in a luxurious apartment in the Imperia Tower currently costs 600 thousand rubles, while the price range of the listings available for rent in this skyscraper is from 350 thousand all the way up to 1 million rubles per month.

This complex, standing on a faceted or “crystal” base, is an architectural engineering project boasting spectacular design. Behind its impressive façades is an abundance of penthouses and apartments having floor areas in the range of 262 sqft (80 m²) to 984 sqft (300 m²). The minimum price of an apartment in the OKO Tower Complex is 40 million rubles (the price of a square meter (3.28 square feet) is 500 thousand rubles). You can rent an apartment here starting from 400 thousand rubles per month.

City of Capitals

The City of Capitals is an exemplary architectural complex. Its sum appearance gives the impression of a huge city. Inside its walls are spacious apartments available for purchase and rent. This complex is considered to be especially prestigious. The prices of apartments here start from 50 million rubles, while the minimum cost of renting is 400 thousand rubles per month.

Please note! The price of real estate available for purchase or rent depends on: the tower, the floor, the total floor area, the furnishings and/or interior design, and other factors.

The key advantages of buying/purchasing real estate in Moscow-City are:

  • Favorable location;
  • Convenient transportation links;
  • Well-developed infrastructure;
  • High safety level;
  • Efficient architecture;
  • Panoramic windows.

Buying real estate in Moscow-City is very much a rational decision, most appealing to those who value the ultimate level of comfort. The residential apartments here boast impressive interior design solutions executed in the contemporary style.

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