Clonal oil palm planting material production: an economic analysis

Zamzuri I., . and Mohd Arif S., . and Rajanaidu S., . and Rohani O., . Clonal oil palm planting material production: an economic analysis. pp. 597-619. ISSN 0126-575X

The demand for oils and fats is expected to increase due to population growth and income. Whilst there is a stagnation of animal fat production most of annual demand for oil is met by vegetable oil in particular the palm oil. On world production palm oil increased the most when compared with other vegetable oils. Being the most productive oil bearing crop it has attracted substantial amount of investments. Each oil palm tree is worth nearly RM1200 this makes an initial investment of RM10 - RM40 per clonal plantlet a worthwhile capital expenditure. Based on demand for oil palm seeds it is estimated that there is a ready market for more than 100 million tissue culture plantlets in the world. In view of this an atempt is made in this paper to outline a design of a tissue culture commercial production plant to serve as a financial guide to potential investors. Capital requirement for building rooms for media preparation washing sterilisation culture transfer etc are described. A comparative study between two production levels managed under single and double shift opertaions is made. With this four models of production systems are generated namely; Model A1 with annual production of ca. 90 000 plantlets in a single shift Model A2 of ca 180 000 plantlets in double shifts Model B1 of ca. 360 000 plantlets in single shift and Model B2 of ca. 700 000 plantlets in double shifts. In conducting the financial feasibility analysis the costs of establishment operating and maintenance of the four production models were estimated. The unit cost of production for Model A1 was RM8.03 Model A2 was RM6.85 Model B1 was RM6.47 and Model B2 was RM5.86. It was found that the venture is financially viable as long as the plantlets are sold at a price of RM20.00 or more per plantlet. If the investor intends to sell at RM15.00 he needs to operate at 700 000 plantlets annually on double shift basis. The analysis also shows that there is no significant difference between Models A2 and B1. The former may be attractive due to its lower budget and the latter if there is an intention for scaling up the operation in future.

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Abstract

The demand for oils and fats is expected to increase due to population growth and income. Whilst there is a stagnation of animal fat production most of annual demand for oil is met by vegetable oil in particular the palm oil. On world production palm oil increased the most when compared with other vegetable oils. Being the most productive oil bearing crop it has attracted substantial amount of investments. Each oil palm tree is worth nearly RM1200 this makes an initial investment of RM10 - RM40 per clonal plantlet a worthwhile capital expenditure. Based on demand for oil palm seeds it is estimated that there is a ready market for more than 100 million tissue culture plantlets in the world. In view of this an atempt is made in this paper to outline a design of a tissue culture commercial production plant to serve as a financial guide to potential investors. Capital requirement for building rooms for media preparation washing sterilisation culture transfer etc are described. A comparative study between two production levels managed under single and double shift opertaions is made. With this four models of production systems are generated namely; Model A1 with annual production of ca. 90 000 plantlets in a single shift Model A2 of ca 180 000 plantlets in double shifts Model B1 of ca. 360 000 plantlets in single shift and Model B2 of ca. 700 000 plantlets in double shifts. In conducting the financial feasibility analysis the costs of establishment operating and maintenance of the four production models were estimated. The unit cost of production for Model A1 was RM8.03 Model A2 was RM6.85 Model B1 was RM6.47 and Model B2 was RM5.86. It was found that the venture is financially viable as long as the plantlets are sold at a price of RM20.00 or more per plantlet. If the investor intends to sell at RM15.00 he needs to operate at 700 000 plantlets annually on double shift basis. The analysis also shows that there is no significant difference between Models A2 and B1. The former may be attractive due to its lower budget and the latter if there is an intention for scaling up the operation in future.

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Item Type:	Article
Additional Information:	Summary (En)
AGROVOC Term:	OIL PALMS
AGROVOC Term:	PLANT PROPAGATION
AGROVOC Term:	PROPAGATION MATERIALS
AGROVOC Term:	PLANTING STOCK
AGROVOC Term:	SEEDS
AGROVOC Term:	TISSUE CULTURE
AGROVOC Term:	PRODUCTION
AGROVOC Term:	FEASIBILITY STUDIES
AGROVOC Term:	PRODUCTION COSTS
AGROVOC Term:	ECONOMIC ANALYSIS PALMAS OLEAGINOSAS
Depositing User:	Ms. Norfaezah Khomsan
Last Modified:	24 Apr 2025 05:52
URI:	http://webagris.upm.edu.my/id/eprint/17712

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