2.0 MASTER LOCATION PLAN 2.1 PLANT SITE LOCATION 2.1.

1 Planning of Palm Oil Mill Before constructing palm oil mill, planning and selection of the propose mill site is become very important. It is a very good approach if this planning is made during planting stage to avoid wasting of cost for unnecessary clearing the planted palms tree for the construction of mill. However this always not the case as most of the mills has also been constructed upon decision of site after estate is ready. The criteria for determining the suitability of a site for a mill are As follows a) Must be near to reliable water source/ water supply b) Relatively high and solid ground c) Located centrally within the reach of estates d) Easy accessibility e) Transportation of FFB to Mill Gate f) Transportation of product from the mill g) Soil condition h) Land topography flat or undulating i) General infrastructure Main government road/ Access road/ water treatment cost/ telephone lines etc. j) Regulations from Local Authority/ sensitivity of the nearby area/ restrictions. 2.1.2 Planning and Selection of Site

a) b) c) d) e) f) g) 2.2.2

Propose location of the mill with respect to overall plantations area Area of mills building and mills compound Area of effluent treatment plant, ETP Area of raw water storage pond Water sources and water intake access Area for executives, staffs and workers quarters Roads and accessibility

Feasibility Study

2.2.2.1 The planning which includes feasibility study must be well ahead before decision to construct oil mill is implemented. Feasibility study is normally undertaken by an experience consultant OR engineer who posses extensive experience in palm oil mill design. Feasibility study will normally focus on the followings:

2.2.2.1.1 2.2.2.1.2 2.2.2.1.3 2.2.2.1.4 2.2.2.1.5 2.2.3

Supply of the raw material, i.e. FFB Projection Selection & Location of the site Capacity of Mill and economic of scale Financial Implication i.e. capital investment and payback years Environmental Issues

Crop Projection

2.2.3.1 Sizes of plantations, planted or to be planted 2.2.3.2 The planting time/years 2.2.3.3 The time of yielding 2.2.3.4 The appropriate Yield 2.2.4 Planning of required Mill Capacity

2.2.4.1 Determining of oil mill capacity from FFB Projection. 2.2.4.2 Mill capacity should capable to handle peak months ffb at approximately 12.5% of the annual crop and on 25 days/month @ 20hrs/day 2.2.4.3 Milling capacity is given by the basic mathematic Capacity, T = Q / (D x H) Where; T is in Ton/Hour Q is peak month FFB in Ton D is number of day per month H is the operating hours per day Palm oil mill normally runs on two shifts or three shifts per day. There are some mill which run on two and a half shift per day i.e. two shifts workers employed and during peak crops the mill will run overtime to process all the FFB. For sizing the capacity of palm oil mills, the following operating hours can be used i.e. 8 hrs per shift or 16 hrs for two shift. For overtime processing hours first shift will work extra 4 hours from their normal 8 hours working and second shift will continue to work another 4 hours addition to their normal 8 hours work.

Another factor that should be considered is the No of working day per year or per month. The company used figure is 300 working days per year or 25 days per month. 2.2.5 Location of Site The criteria for determining the suitability of a site for a mills are as follows 2.2.5.1 Strategically located within all the ffb supplying estates. 2.2.5.2 Near the water sources 2.2.5.3 Relatively high and solid ground 2.2.5.4 Easy Access for raw material and final product transportation process 2.2.5.5 To consider and obtaining the followings information a) b) c) d) e) f) Transportation of FFB to Mill Gate Transportation of Product from the mill Water source / Water supply Land Topography Flat or Undulating Soil Condition from soil test report General Infrastructure Main Road/Access road/water treatment cost/Telephone lines etc. g) Regulations from Local Authority/sensitivity of the nearby area / restrictions. 2.2.6 Capital Expenditure Projections

2.2.6.1 This an important aspect of a feasibility study 2.2.6.2 Total capital investment and operation cost over a certain period (ex: 15 years) 2.2.6.3 To shows profit / Internal Rate of Return/ Payback period 2.2.6.4 To established prospect of income from the oil mill project 2.2.6.5 To be prepared during feasibility study is conducted 2.2.6.6 To clearly indicate disbursement of such big capital expenditure and payback period over a certain number of years 2.2.6.7 To determine return on investment and at what year the project will be in the green

2.2.7

Environmental Issues The feasibility study should also seriously look into the environment impact of setting up the mill project. The rationale behind this is the effects of environment issues can last for generations as well as the human welfare as a whole. Such issues like water, air, noise pollution are becoming more and more stringent and recommendations to construct a mill should give more in depth considerations to these environment issues.