mr. krisada_chairman thai palm oil industry club

1

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

ContentsContents

Background information of palm oil plantation and Industry in Thailand

Future Challenging and Trend of Down Steam Opportunity

Current Problems of Palm Oil Industry

Future Overview


CDM projects development in Thailand

Conclusion

2

2

FFB Production(Ton FFB)

Production yield(ton-FFB/rai)

YearMature area

(rai)Plantation area

(rai)

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

Background of Palm Oil Industry in ThailandBackground of Palm Oil Industry in Thailand

2006 6,715,036 2.8282,374,202

2007 6,389,983 2.3992,663,252

2,953,924

3,200,276

2008 9,270,510 3.2142,884,7203,676,096

2009 8,162,379 2.5613,187,0003,888,403

2010 8,223,000 2.3153,553,0004,077,000

2011 1/ 9,119,720 1/ 2.4303,754,740 1/4,285,000

Remark: 1/ is an estimation value of year 2011 source: Ministry of Agriculture and Cooperative (MoAC), June2011

, ,, ,, ,

3 Future of Thai Palm oil Industry, September 8, 2011

*** *** 8080% of plantations in Thailand are small farmer. ***% of plantations in Thailand are small farmer. ***

North-Eastern Area

-Mature Area 45,860 Rai

-FFB 44,900 Tons

North Area


-FFB 5,860 Tons

-Average Yield 0.70 Tons/Rai

Year Year 20112011

Central Area


-FFB 944,470 Tons



** ** From year From year 1997 1997 to to 20112011, , Mature harvests area in Mature harvests area in Thailand increase from Thailand increase from 11..11 11


Southern Area

-Mature Area 3,302,590 Rai

-FFB 8,124,490 Tons


4

M.RaiM.Rai to be to be 33..75 75 M.RaiM.Rai ((~~240240% % ↑↑) ) ****

3

Crude Oil (Ton FFB)

CPO yield(Ton CPO/rai)

YearFFB Produced

(Ton FFB)Mature

area (rai)

Crude Palm Oil Production in Thailand, year 2006 - 2011

Crude Palm Oil Production in ThailandCrude Palm Oil Production in Thailand

2006

(Ton FFB)

1,167,126

(Ton-CPO/rai)

0.49166,518,380

2007 1,051,089 0.39466,150,365

(Ton FFB)

2,374,202

2,663,252

area (rai)

2008 1,543,761 0.53529,165,3032,884,720

2009 1,345,245 0.42218,032,5133,187,000 , ,, ,, ,

2011 1/ 1,546,056 1/ 0.41189,119,720 1/3,754,740 1/

Remark: 1/ is an estimation value of year 2011 source: Department of Internal Trade(DIT), June2011

2010 1,287,510 0.36247,845,8503,553,000


Nongkhai– 1 Crushing Mill

Palm Oil Crushing Mills, Year Palm Oil Crushing Mills, Year 20112011

Southern AreaSouthern Area 70 Crushing Mills,

Total Capacity are 2,573 tons/hr.Central AreaCentral Area 3 Crushing Mills,

Total Capacity are 62 tons/hr.Eastern AreaEastern Area

Prachuapkirikhan – 3 Crushing Mills, 62 Tons/hr.

Chumphon – 21 Crushing Mills, 680 Tons/hr

Chonburi – 2 Crushing Mills, 135 Tons/hr.

Eastern AreaEastern Area 2 Crushing Mills,

Total Capacity are 135 tons/hr.NorthNorth--Eastern AreaEastern Area 1 Crushing Mill

Krabi – 18 Crushing Mills, 740 Tons/hr.

Surathani – 15 Crushing Mills, 805 Tons/hr.

680 Tons/hr.

Satun – 5 Crushing Mills, 62 Tons/hr.

Trang – 4 Crushing Mills, 180 Tons/hr.

Songkha – 3 Crushing Mills, 17 Tons/hr.

Ranong – 1 Crushing Mill, 20 Tons/hr.

NakornSrithamarah – 2 Crushing Mills, 60 Tons/hr. Phang-nga – 1 Crushing Mills, 30 Tons/hr.

6Future of Thai Palm oil Industry, September 8, 2011

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Crushing Mill in Crushing Mill in Thailand, Thailand, 20112011

Year Year 20112011, total , total 76 76 Crushing Mills in Crushing Mills in Thailand,Thailand,Total Production Capacity Total Production Capacity 22,,791 791 Tons/hrTons/hr

2007 2011 %Change

Mill Capacity Mill Capacity Mill Capacity

Southern 54 2,187 70 2,594 30% 19%

Central 3 32 3 62 0% 94%

North-Eastern - - 1 - New Area

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


Eastern 2 62 2 135 0% 118%

Total 59 2,281 76 2,791 29% 22%

Palm Oil Refineries in ThailandPalm Oil Refineries in Thailand

Total Total 15 15 Refineries Plant Operating Refineries Plant Operating in year in year 20112011

Central AreaCentral Area 12 Refineries,

Total Capacity are 6,585 tons-CPO/day.Southern AreaSouthern Area 2 Refineries,

Total Capacity are 900 tons-CPO/day.Eastern AreaEastern Area 1 Crushing,

Total Capacity are 300 tons/day.

Future of Thai Palm oil Industry, September 8, 2011 8

Total Refine Capacity= Total Refine Capacity= 77,,785 785 tonton--CPO/dayCPO/day

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

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Biodiesel Industry in ThailandBiodiesel Industry in Thailand

Total Total 15 15 Biodiesel Plant Operating Biodiesel Plant Operating in year in year 20112011

Central AreaCentral Area 9 Biodiesel Plants,

Total Capacity are 3,754,000 L/day.Southern AreaSouthern Area 2 Biodiesel Plants,

Total Capacity are 420,000 L/day.Eastern AreaEastern Area 3 Biodeisel Plants,

Total Capacity are 1,815,800 L/day.N th AN th A

Future of Thai Palm oil Industry, September 8, 2011 9

North AreaNorth Area 1 Biodeisel Plants,

Total Capacity are 50,000 L/day.

Total Capacity = Total Capacity = 66,,039039,,800 800 L/dayL/day

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

Palm Oil Business ProblemPalm Oil Business Problem

Palm Plantation80% of Plantations in Thailand are small farmers.

“Low FFB production yield”, (~ 2.625 Ton-FFB/rai)

Barrier: in term of “Policy Implementation” with several small farmers holder, it is very difficult to stimulate and implement.

If “Government strategy” not well appropriated planning

p y , ( )

“Poor Quality Seeding”

“Improperly of palm plantation management”, less fertilizer apply and take care.


If Government 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)

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Palm Oil Crushing Mills ProblemsPalm Oil Crushing Mills Problems

Year2007 2011

Over Capacity of Palm Oil factory and Under Demand of FFB

Palm Oil MillsPalm Oil MillsFrom 2007 to 2011,

No. of POM mills 59 76

Total POMs Capacity (t-FFB/hr) 2,281 2,791If operate 24 hr, 300 day/yr

Total demand of FFB for POMs production (t-FFB/yr) 16,423,200 20,095,200

Total FFB production Supply (t-FFB/yr) 6,389,983 9,119,720

% of Over demand of POMs capacity 61% 55%

,the FFB production

supply increased 43%. However the number of POMs

increased very fast 29%. Plantation can supply only 55% of the POMs capacity.


When “Over Demand” Strong competition between mills FFB price increase. FFB quality decrease. it cause of unproductive operation.

Finally, “Operation Cost” higher than other country, can’t compete in world market”

Palm Oil Business ProblemsPalm Oil Business Problems

Oil Refineries & Biodiesel Plants“Over Capacity” of Refineries and Biodiesel plants, it

over demand than available of crude palm oil-raw over demand than available of crude palm oil raw material supply.

Advantage: Each mills have to improves in over all production efficiency, to survive in market

“Low production capacity”, compare with other country

“Higher of Margin cost”, difficult to compete in world market


production efficiency, to survive in market

Disadvantage: Whom can’t competed, will not survive

7

20.0%

30.0%

40.0%

2.500

3.000

3.500

-FFB

/Rai)

% FFB yield Fluctuation

Production yield (Ton‐FFB/Rai)

uctu

atio

n

Ton-

FF

B/R

ai)

L d ti i ld h ith th t

Future Challenging in Palm PlantationFuture Challenging in Palm Plantation

-30 0%

-20.0%

-10.0%

0.0%

10.0%

0 000

0.500

1.000

1.500

2.000Pr

oduc

tion

yie

ld (Ton

% F

FB

yie

ld F

lu

Pro

duct

ion

yiel

d (T • Low production yield when compare with other country

• Production yield fluctuates year by year

-30.0%0.000

2006 2007 2008 2009 2010 2011

YearYear


Yes, it could looks as problems. But vice versa, “It also could be looks as an opportunity for

improving through GAP (Good Agriculture Practice)”

Future Challenging in Palm PlantationsFuture Challenging in Palm Plantations

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

Need Big Plantation to act as a baby-setter.


8

70

80

17 50%

18.00%

ills

Future Challenging in Palm Oil millsFuture Challenging in Palm Oil mills

Low CPO production yield & Fluctuation

20

30

40

50

60

70

15.50%

16.00%

16.50%

17.00%

17.50%

%C

PO

yie

ld p

er t-

FF

B

.of p

alm

oil

crus

hing

mi


0

10

14.50%

15.00%

2006 2007 2008 2009 2010 2011

Year

% CPO yield per t‐FFB

No.of mill POMs

%

No.Other country,

average CPO yield > 19%

3.00

3.50

4.00

4.50

5.00

(Ton

-CPO

/ha)

Palm Oil Mill ProductionPalm Oil Mill ProductionMPOB, average year 2006-2010,

production yield = 3.973 Ton-CPO/ha

0.00

0.50

1.00

1.50

2.00

2.50

2006 2007 2008 2009 2010 2011

CPO P

rodu

ction

yiel

d (

CPO yield (Ton‐CPO/ha.)

Thailand, average 2.727 Ton-CPO/ha

2006 2007 2008 2009 2010 2011

YearYear


** Business is in “Natural Selection” stage, the one whom can improved inperformance and efficiency, would be competitive and survive.

Disadvantage: Some of corporate mils that could not survive, will be bankrupt, insolvent or Stop operation **

9

3 50

4.00

4.50

5.00

CPO

/ha)

Palm Oil Mill ProductionPalm Oil Mill Production

**Thailand have to increase

MPOB, average = 3.973 Ton-CPO/ha

1.00

1.50

2.00

2.50

3.00

3.50

oduc

tion

yie

ld (Ton

-C

If Thailand can step up CPO yield to 3.973 Ton-CPO/ha, it

Thailand, have to increaseproduction yield +45.7%**

Thailand, average = 2.727 Ton-CPO/ha

0.00

0.50

2006 2007 2008 2009 2010 2011

CPO

Pr

Year

CPO yield (Ton‐CPO/ha.)

Year

ywill increase more CPO produce about 748,769.6 Ton-CPO/yr.


Future OverviewFuture Overview

Demand-Supply Equation

?18 Future of Thai Palm oil Industry, September 8, 2011

?

10

Future Component of Palm Oil Industry

Waste Utilization &

Environmental Product

Palm oil production• Normal CPO

• Low Carbon Footprint CPO (RSPO product)

Palm oil mills

Renewable Energy

Oleo chemical Industry

• High Value added product• Bioplastic

• Project developer / Seller

Exploitation ofCarbon Emissions

gy

• Biogas / Biomass Power Plant

• Biodiesel oil

• Shell/alternative fossil fuel replacement


Future Challenging Trend of Down Steam Opportunity

Biogas plantWASTE UTILIZATIONWASTE UTILIZATIONTurn “Waste” to “Renewable Turn “Waste” to “Renewable

Energy Power Producer”Energy Power Producer”

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Biomass power plantBiomass Power plant


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Renewable Potential of POMs residue waste

Based on FFB production ~ 12.0 Million ton per year

POMs residue waste related to CDM potential D.cake

POME Waste water Characteristic

COD

LHV

%CH4

~ 60,000 – 80,000 mg/L

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

55 - 65%

Biomass (EFB) Characteristic

p432,000 ton

Fiber 1,680,000 ton

EFB 2,640,000 tonWaste water

7,200,000 m3

LHV

%moisture

7,240 kJ/kg

58.6%Shell

720,000 ton


Turn “Waste” to “Renewable Energy Potential”

Biogas Potential

MWThermal / yrSource Biogas (m3) GWh Elect/aAmount

(Based on estimation of 12.0 million ton of FFB)

* MW electricity calculated at 38% Efficiency of biogas engine, biogas yield 0.45 m3/kg-CODdegradable @ 60% CH4, op. 24hr and 300 days

POME 1,058,400181,440,000 402.27,200,000 m3

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

Biomass type

EFB

MWThermal / yr

5,309,333

Amount (tons)

2,640,000

GWhElect/a

1,061.9

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


12

VSPP-Biogas plantsBiogas plants from Palm Oil Industry

Trang, 4Prachup, 1 Chonburi,

1

Suratthani, 18

Krabi, 16

Chumporn, 6

Biogas Power Plant No of mill in Status

Source: VSPP_status_June2011, www.EPPO.go.th

Biogas Power Plant No. of mill in Status(under PPA contract) Operating On going

< 1 MW 5 41 -2 MW 12 -≥ 2 - 5 MW 11 13> 5 MW - 1

Total 28 18


Biogas plants in Southern ProvinceBiogas plants in Southern Province

Total Total 28 28 Biogas Plants Biogas Plants have been COD and Operated, (Aug have been COD and Operated, (Aug 20112011))

SuratthaniSuratthani Province Province Total 18 Biogas Plants applied for VSPP Total 18 Biogas Plants applied for VSPP, Operated 12 Plants = 18.7 MW(~ 65 % of POMs in Surat)

KrabiKrabi 16 plants applied for VSPP,

Operated 9 plants = 12.8 MW(~ 50% of POMs in Krabi)

ChompornChomporn 6 plants applied for VSPP,


6 plants applied for VSPP, Operated 3 plants = 9.4 MW(~ 14% of POMs in Chumporn)

TrangTrang 4 plants applied for VSPP,

Operated 4 plants = 5.1 MW

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VSPP Status

Biogas from POMsSuratthani 12Krabi 9

Total Capacity Installed (MW)

Total No. of plantProvince No.Mill

COD and operation 28 58 3

PPA (kW)

46 8

Currently VSPP_Palm Oil Biogas plant Biogas plant -StatusStatus

Trang 4Chumporn 3Suratthani 2Krabi 1Prachuapkhirikhan 1Chumporn 3Krabi 2Chonburi 1

COD and operation

Signed PPA & waiting for COD

28

4

58.3

16.9

23.9Waiting for sign PPA 6

46.8

15.7

15.9C o buKrabi 6Suratthani 2

Total plant 46 110.8 87.4

11.7Applied for register to PEA 8 9.0

Source: VSPP_status_Aug2011, EPPO+PEA’s information

~ 60% of Total POMs in Thailand, are investing in biogas power plant


VSPP-Biomass plantsBiomass plants from Palm Oil Residue

Krabi, 3Prach p 1

Srakaew, 1

Nakornprathom, 1

,

Suratthani, 3

Chumporn, 3

Trang, 1

Prachup, 1

Biogas Power Plant No. of mill in Status

Source: VSPP_status_Aug2011, EPPO+PEA’s information

(under PPA contract) Operating On going≤ 1 MW 1 -≥ 2 - 5 MW 1 2≥ 5 - 10 MW 2 7

Total 4 9


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Currently VSPP Biomass power plant in Palm oil Industry

Krabi Kaopranum 8.5Chumporn Thasae 8Suratthani Prasaeng 2.2Prachuapkhirikhan Bangsaphannoi 1

Total 19.7

Province District area MW sale


VSPP Status

Biomass from POMsKrabi 1

PPA (kW)Province No.MillTotal No. of plant

Total Capacity Installed (MW)

Currently VSPP_Palm Oil Biomass plant Biomass plant -StatusStatus

Krabi 1Suratthani 1Chumporn 1Prachuapkhirikhan 1Chumporn 2Trang 1Suratthani 1Nakornprathom 1S k 1

COD and operation 4 26.0 19.7

6 55 41.5Signed PPA & waiting for COD

Srakaew 1Krabi 2Suratthani 1

Total plant 13 101.5 80.8

Waiting for sign PPA 3 20.5 19.6


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Currently Carbon Cycle in Palm Oil Industry & CDM developmentCurrently Carbon Cycle in Palm Oil Industry & CDM development

CDM CDM developementdevelopement• WW.treatment

• Solid waste handling• Fuel replacement•Grid replacement


Thailand CDM project Developement

Total CDM Project development in Thailand = 251 Projects

Total Biogas project = 75 projects, from POMs = 34 Projects

Total Biomass = 87 projects, from POMs = 5 Projects

Total CDM Project development in Thailand = 251 Projects (TGO’ info. date on May6, 2011)

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


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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

Biomass = 8 projects, from Palm residue = 1 Projects

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


ConclusionConclusionConclusion.Conclusion.

For more information:Contact: Tel. 02 314 - 4101- 4 Ext 612

Email: [email protected]


mr. krisada_chairman thai palm oil industry club

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