Future of The Thai Palm Oil Industry

By Mr.Krisada Chavananand
Chairman of Thai Palm Oil Industry, FTI board member

IMPACT, Bangkok
8 September 2011

Future of Thai Palm oil Industry, September 8, 2011

Contents
Background information of palm oil plantation and
Industry in Thailand
Current Problems of Palm Oil Industry
Future Overview
Future Challenging and Trend of Down Steam Opportunity
CDM projects development in Thailand
Conclusion

Future of Thai Palm oil Industry, September 8, 2011

Background of Palm Oil Industry in Thailand

Palm Oil Plantation and Production in Thailand, year 2006 - 2011

Year

Plantation area
(rai)

Mature area
(rai)

2006

2,953,924

2,374,202

6,715,036

2.828

2007

3,200,276

2,663,252

6,389,983

2.399

2008

3,676,096

2,884,720

9,270,510

3.214

2009

3,888,403

3,187,000

8,162,379

2.561

2010

4,077,000
,
,

3,553,000
,
,

8,223,000
,
,

2.315

2011 1/

4,285,000

3,754,740 1/

9,119,720 1/

2.430

FFB Production Production yield

(Ton FFB)
(ton-FFB/rai)

Remark: 1/ is an estimation value of year 2011

source: Ministry of Agriculture and Cooperative (MoAC), June2011

*** 80%
80% of plantations in Thailand are small farmer. ***
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Future of Thai Palm oil Industry, September 8, 2011

Year 2011

North Area
-Mature Area 8,380 Rai
-FFB

5,860 Tons

-Average Yield 0.70 Tons/Rai

North-Eastern Area
-Mature Area 45,860 Rai
-FFB

44,900 Tons

-Average Yield 0.98 Tons/Rai

Central Area
-Mature Area 396,910 Rai
-FFB

944,470 Tons

-Average Yield 2.38 Tons/Rai

Southern Area

** From year 1997 to 2011

2011,,
Mature harvests area in
Thailand increase from 1.11
M.Rai to be 3.75 M.Rai
(~240%
240% ) **

-Mature Area 3,302,590 Rai

-FFB

8,124,490 Tons

-Average Yield 2.46 Tons/Rai

Future of Thai Palm oil Industry, September 8, 2011

Crude Palm Oil Production in Thailand

Crude Palm Oil Production in Thailand, year 2006 - 2011
Year

Mature
area (rai)

FFB Produced
(Ton FFB)

Crude Oil
(Ton FFB)

CPO yield
(Ton-CPO/rai)
(Ton
CPO/rai)

2006

2,374,202

6,518,380

1,167,126

0.4916

2007

2,663,252

6,150,365

1,051,089

0.3946

2008

2,884,720

9,165,303

1,543,761

0.5352

2009

3,187,000
,
,

8,032,513
,
,

1,345,245
,
,

0.4221

2010

3,553,000

7,845,850

1,287,510

0.3624

2011 1/

3,754,740 1/

9,119,720 1/

1,546,056 1/

0.4118

Remark: 1/ is an estimation value of year 2011

source: Department of Internal Trade(DIT), June2011
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Future of Thai Palm oil Industry, September 8, 2011

Palm Oil Crushing Mills, Year 2011

Southern Area
70 Crushing Mills,
Total Capacity are 2,573 tons/hr.
Central Area
3 Crushing Mills,
Total Capacity are 62 tons/hr.
Eastern Area
2 Crushing Mills,
Total Capacity are 135 tons/hr.
North--Eastern Area
North
1 Crushing Mill

Nongkhai 1 Crushing Mill

Chonburi 2 Crushing Mills,

135 Tons/hr.

Prachuapkirikhan 3 Crushing Mills,

62 Tons/hr.
Chumphon 21 Crushing Mills,
680 Tons/hr.
Tons/hr
Ranong 1 Crushing Mill,
20 Tons/hr.
Surathani 15 Crushing Mills, 805 Tons/hr.
Phang-nga 1 Crushing Mills, 30 Tons/hr.
NakornSrithamarah 2 Crushing Mills, 60 Tons/hr.
Krabi 18 Crushing Mills, 740 Tons/hr.
Trang 4 Crushing Mills, 180 Tons/hr.
Satun 5 Crushing Mills,
62 Tons/hr.

Songkha 3 Crushing Mills,

17 Tons/hr.

Future of Thai Palm oil Industry, September 8, 2011

Crushing Mill in Thailand, 2011

Year 2011
2011,, total 76 Crushing Mills in Thailand,
Total Production Capacity 2,791 Tons/hr
2007

2011

%Change

Mill

Capacity

Mill

Capacity

Mill

Capacity

Southern

54

2,187

70

2,594

30%

19%

Central

32

62

0%

94%

North-Eastern

Eastern

62

135

Total

59

2,281

76

2,791

New Area
0%

118%

29%

22%

** From Year 2007 to 2011, Total palm oil mill increased 29%**

Future of Thai Palm oil Industry, September 8, 2011

Palm Oil Refineries in Thailand

Total 15 Refineries Plant Operating
in year 2011
Central Area
12 Refineries,
Total Capacity are 6,585 tons-CPO/day.
Southern Area
2 Refineries,
Total Capacity are 900 tons-CPO/day.
Eastern Area
1 Crushing,
Total Capacity are 300 tons/day.
Total Refine Capacity= 7,785 ton
ton--CPO/day

** Year 2010, Refine palm oil (RBD) = 624,086 ton**

Future of Thai Palm oil Industry, September 8, 2011

Biodiesel Industry in Thailand

Total 15 Biodiesel Plant Operating
in year 2011
Central Area
9 Biodiesel Plants,
Total Capacity are 3,754,000 L/day.
Southern Area
2 Biodiesel Plants,
Total Capacity are 420,000 L/day.
Eastern Area
3 Biodeisel Plants,
Total Capacity are 1,815,800 L/day.
N th A
North
Area
1 Biodeisel Plants,
Total Capacity are 50,000 L/day.
Total Capacity = 6,039,
039,800 L/day

** Year 2010, Biodiesel Produced = 382,228 L **

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Future of Thai Palm oil Industry, September 8, 2011

Palm Oil Business Problem

Palm Plantation
80% of Plantations in Thailand are small farmers.
Low FFB p
production yield,
y
, (~
( 2.625 Ton-FFB/rai))
Poor Quality Seeding
Improperly of palm plantation management, less
fertilizer apply and take care.
Barrier: in term of Policy Implementation with several
small farmers holder, it is very difficult to stimulate
and implement.
If Government
Government strategy
strategy not well appropriated planning
and having good long term vision, it will difficult to
success.
** Advantage: when having Good Policy launch, it will create large effects and
give benefits down steam to many Grassroots stakeholders. **

(Higher Social Impact)

10

Future of Thai Palm oil Industry, September 8, 2011

Palm Oil Crushing Mills Problems

Over Capacity of Palm Oil factory and Under Demand of FFB
Year

Palm Oil Mills

2007

2011

59

76

2,281

2,791

production (t-FFB/yr)

16,423,200

20,095,200

Total FFB production Supply (t-FFB/yr)

6,389,983

9,119,720

61%

55%

No. of POM mills

Total POMs Capacity (t-FFB/hr)
If operate 24 hr, 300 day/yr
Total demand of FFB for POMs

% of Over demand of POMs capacity

When Over Demand

From 2007 to 2011,,

the FFB production
supply increased
43%. However the
number of POMs
increased very fast
29%. Plantation can
supply only 55% of
the POMs capacity.

Strong competition between mills

FFB price increase.
FFB quality decrease.
it cause of unproductive operation.

Finally, Operation Cost higher than other country, cant compete in world market
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Future of Thai Palm oil Industry, September 8, 2011

Palm Oil Business Problems

Oil Refineries & Biodiesel Plants

Over Capacity of Refineries and Biodiesel plants, it
over demand than available of crude palm oil
oil-raw
raw
material supply.
Low production capacity, compare with other country
Higher of Margin cost, difficult to compete in world
market
Advantage: Each mills have to improves in over all
production efficiency, to survive in market
Disadvantage: Whom cant competed, will not survive

12

Future of Thai Palm oil Industry, September 8, 2011

Future Challenging in Palm Plantation

3.500

40.0%
Productionyield(TonFFB/Rai)

3.000
2.500
2.000

30.0%
20.0%

Low
L
production
d ti yield
i ld when
h compare with
ith other
th country
t
Production yield fluctuates year by year

10.0%

1.500

0.0%

1.000

-10.0%

0.500

-20.0%

0 000
0.000

% FFB yield Flu

uctuation

Production
yield
(T
Ton-FFB/Rai)
Production yield
(Ton
-FFB/Rai)

%FFByieldFluctuation

-30 0%
-30.0%
2006

2007

2008

2009

2010

2011

Year
Year
Yes, it could looks as problems. But vice versa,
It also could be looks as an opportunity for
improving through GAP (Good Agriculture Practice)
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Future of Thai Palm oil Industry, September 8, 2011

Future Challenging in Palm Plantations

N
to Promote
r m
higher
g r cooperation
p r
n between
w n
Need
mills and farmer

Need Big Plantation to act as a baby-setter.

14

Future of Thai Palm oil Industry, September 8, 2011

Future Challenging in Palm Oil mills

18.00%

80

17 50%
17.50%

70
60

17.00%

50

16.50%

40
16.00%

30

15.50%
15.00%

%CPOyieldpertFFB
No.ofmillPOMs

14.50%
2006

2007

20

Other country,
average CPO yield
> 19%
2008

2009

2010

10

No..of palm oil crushing miills

%CPO yield per t-FFB

%

Low CPO production yield & Fluctuation

2011

Year

15

Future of Thai Palm oil Industry, September 8, 2011

Palm Oil Mill Production

CPO Production yield ((Ton-CPO/ha)

5.00

MPOB, average year 2006-2010,

production yield = 3.973 Ton-CPO/ha

4.50
4.00
3.50
3.00
2.50
2.00

Thailand, average
2.727 Ton-CPO/ha

1.50
1.00
0.50

CPOyield(TonCPO/ha.)

0.00
2006

2007

2008

2009

2010

2011

Year
Year

** Business is in Natural Selection stage, the one whom can improved in

performance and efficiency, would be competitive and survive.
Disadvantage: Some of corporate mils that could not survive, will be
bankrupt, insolvent or Stop operation **
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Future of Thai Palm oil Industry, September 8, 2011

Palm Oil Mill Production

CPO Production yield (Ton-C

CPO/ha)

5.00
MPOB, average = 3.973 Ton-CPO/ha

4.50
4.00
3 50
3.50

**Thailand
Thailand, have to increase
production yield +45.7%**

3.00
2.50
2.00

Thailand, average = 2.727 Ton-CPO/ha

1.50

If Thailand can step up CPO

y
yield
to 3.973 Ton-CPO/ha, it
will increase more CPO produce
about 748,769.6 Ton-CPO/yr.

1.00
0.50

CPOyield(TonCPO/ha.)

0.00
2006

2007

2008

2009

2010

2011

Year
Year
17

Future of Thai Palm oil Industry, September 8, 2011

Future Overview

Demand-Supply Equation

?
18

Future of Thai Palm oil Industry, September 8, 2011

Future Component of Palm Oil Industry

Normal CPO

Palm oil production

Waste Utilization &

Low Carbon Footprint

CPO (RSPO product)

Environmental Product
Oleo chemical Industry

Palm oil mills

High Value added product
Bioplastic

Renewable Energy
gy
Biogas / Biomass Power Plant
Biodiesel oil

Exploitation of
Carbon Emissions
Project developer / Seller

Shell/alternative fossil fuel replacement

19

Future of Thai Palm oil Industry, September 8, 2011

Future Challenging Trend of Down Steam Opportunity

WASTE UTILIZATION
Turn Waste to Renewable
Energy Power Producer

Biogas plant

BiomassPower
powerplant
plant
Biomass
20

Future of Thai Palm oil Industry, September 8, 2011

10

Renewable Potential of POMs residue waste

Based on FFB production ~
D.cake
432,000 ton

Waste water
7,200,000 m3

12.0 Million ton per year

potential
POMs residue waste related to CDM p

Fiber
1,680,000 ton

POME Waste water Characteristic

EFB
2,640,000 ton

COD

~ 60,000 80,000 mg/L

%CH4

55 - 65%

LHV

21-23 MJ/m3 (depend on %CH4)

Biomass (EFB) Characteristic

Shell
720,000 ton

21

%moisture

58.6%

LHV

7,240 kJ/kg

Future of Thai Palm oil Industry, September 8, 2011

Turn Waste to
Renewable Energy Potential
Biogas Potential
Source
POME

(Based on estimation of 12.0 million ton of FFB)

Amount

Biogas (m3) MWThermal / yr GWh Elect/a

7,200,000 m3 181,440,000

1,058,400

402.2

* MW electricity calculated at 38% Efficiency of biogas engine,

biogas yield 0.45 m3/kg-CODdegradable @ 60% CH4, op. 24hr and 300 days

Biomass Potential

(Based on ~ 12.0 million ton of FFB per annum)

Biomass type Amount (tons)

EFB

2,640,000

MWThermal / yr

GWhElect/a

5,309,333

1,061.9

* MW electricity calculated at 20% efficiency of power plant, op. 24hr and 300 days

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Future of Thai Palm oil Industry, September 8, 2011

11

VSPP-Biogas plants from Palm Oil Industry

Trang, 4

Prachup, 1

Chonburi,
1

Chumporn,
6
Suratthani,
18
Krabi, 16

Biogas Power Plant

(underPPAcontract)
< 1 MW
1 -2 MW
2 - 5 MW
>5 MW
Total

No of mill in Status
No.
Operating
On going
5
4
12
11
13
1
28
18

Source: VSPP_status_June2011, www.EPPO.go.th

23

Future of Thai Palm oil Industry, September 8, 2011

Biogas plants in Southern Province

Total 28 Biogas Plants
have been COD and Operated, (Aug 2011)
2011)
Suratthani Province
Total 18 Biogas Plants applied for VSPP,
VSPP
Operated 12 Plants = 18.7 MW
(~ 65 % of POMs in Surat)
Krabi
16 plants applied for VSPP,
Operated 9 plants = 12.8 MW
(~ 50% of POMs in Krabi)
Chomporn
6 plants applied for VSPP,
Operated 3 plants = 9.4 MW
(~ 14% of POMs in Chumporn)
Trang
4 plants applied for VSPP,
Operated 4 plants = 5.1 MW

24

Future of Thai Palm oil Industry, September 8, 2011

12

Currently VSPP_Palm Oil Biogas plant -Status

Status
VSPP Status
Biogas from POMs
COD and operation

Province

No.Mill

Suratthani

12

Krabi
Trang
Chumporn
Suratthani

9
4
3
2

Total No.
of plant

Total Capacity
Installed (MW)

PPA (kW)

28

58 3
58.3

46 8
46.8

Signed PPA & waiting for

Krabi
COD
Prachuapkhirikhan
Chumporn
Waiting for sign PPA
Krabi
Chonburi
C
o bu

1
1
3

16.9

15.7

2
1

23.9

15.9

Applied for register to

PEA

6
2

11.7

9.0

46

110.8

87.4

Krabi
Suratthani

Total plant
Source: VSPP_status_Aug2011, EPPO+PEAs information

~ 60% of Total POMs in Thailand,

are investing in biogas power plant
25

Future of Thai Palm oil Industry, September 8, 2011

VSPP-Biomass plants from Palm Oil Residue

Nakornprathom
,1

Srakaew, 1
Krabi,, 3

Prach p 1
Prachup,
Trang, 1
Chumporn,
3

Biogas Power Plant

(underPPAcontract)
1 MW
2 - 5 MW
5- 10 MW
Total

Suratthani,
3

No. of mill in Status

Operating
On going
1
1
2
2
7
4
9

Source: VSPP_status_Aug2011, EPPO+PEAs information

26

Future of Thai Palm oil Industry, September 8, 2011

13

Currently VSPP Biomass power plant in Palm oil Industry

Province
Krabi
Chumporn
Suratthani
Prachuapkhirikhan

District area

MW sale

Kaopranum
Thasae
Prasaeng
Bangsaphannoi

8.5
8
2.2
1
19.7

Total

27

Future of Thai Palm oil Industry, September 8, 2011

Currently VSPP_Palm Oil Biomass plant -Status

Status

VSPP Status
Biomass from POMs
COD and operation

Province

No.Mill

Total No.
of plant

Total Capacity
Installed (MW)

PPA (kW)

Krabi
Suratthani
Chumporn
Prachuapkhirikhan

1
1
1
1

26.0

19.7

2
1
1
1
1

55

41.5

2
1

20.5

19.6

13

101.5

80.8

Chumporn
Trang
Signed PPA & waiting for
Suratthani
COD
Nakornprathom
S k
Srakaew
Waiting for sign PPA

28

Krabi
Suratthani
Total plant

Future of Thai Palm oil Industry, September 8, 2011

14

Currently Carbon Cycle in Palm Oil Industry & CDM development

29

CDM developement
WW.treatment
Solid waste handling
Fuel replacement
Grid replacement
Future of Thai Palm oil Industry, September 8, 2011

Thailand CDM project Developement

Total Biomass = 87 projects,
from POMs = 5 Projects

Total Biogas project = 75

projects, from POMs = 34 Projects

Total CDM Project development in Thailand = 251 Projects

(TGO info. date on May6, 2011)

Source: www.TGO.or.th and www.UNFCCC

30

Future of Thai Palm oil Industry, September 8, 2011

15

Currently CDM project Status

Thailand CDM Project have been registered= 49 Projects
(TGO info. date on May6, 2011)

Biogas = 21 projects,
from POMs = 14 Projects.
CERs issued = 2 Projects

Source: www.TGO.or.th and www.UNFCCC

Biomass = 8 projects,
from Palm residue = 1 Projects

31

Future of Thai Palm oil Industry, September 8, 2011

Conclusion
Conclusion.

For more information:

Contact: Tel. 02 314 - 4101- 4 Ext 612
Email: Krisada@vcbgroup.com
32

Future of Thai Palm oil Industry, September 8, 2011

16