Small-scale Community Oil Palm Mill Project in Telupid, Sabah, Malaysia

 

By:PACOS Trust & Alter Oil Palm Trade S/B

18 November 2011

Mission

• To promote sustainable/alternative livelihoods among the indigenous peoples of the project area in Telupid, Sabah, Malaysia using oil palm as a secure and viable commodity crop which is a means of ensuring security of native lands to the local communities.

Concept• The proposed small-scale community palm oil mill of 5 tph 

will be owned and managed by Alter Oil Palm Trade Sdn. Bhd. (ATOP), which is the business wing of a well-known grassroots organization in Sabah called PACOS (Partners of Community Organisations).

•  The basic concept of the SCOP project is to support current oil palm smallholders in securing sustainable/alternative livelihood with a small-scale community oil palm mill as its central focus. 

• This will enable oil palm smallholders from amongst the indigenous communities to produce their own organic oil palm FFB and sell it directly to the community oil palm mill thereby avoiding the middlemen. 

Concept• This social-oriented project is envisaged to benefit the local communities immensely as it is designed for community-management and not monopoly by any single entity. 

• The local communities will be organized into a local cooperative which will be managed by the local communities themselves and the profit generated from the SCOP project will be disbursed to members of the cooperative comprising local community oil palm smallholders. In its essence, the SCOP project is a joint endeavour between the local communities for the sole benefit of the local communities. 

Goal

• To provide the local communities in the project area the opportunity to participate in a sustainable/alternative livelihood venture which is not only geared at increasing their livelihood opportunities and income, but also as a means of empowering the communities involved to venture into long-term sustainable business as a community. 

Vision

• To empower the local communities on their basic right to self-determination of their economic, cultural and spiritual growth and well-being. With such an initiative, it is hoped that local communities will organise themselves as a community, earn a sustainable long-term income, continue to utilise their native land and effectively mitigate the large exodus out of their traditional territories in search of employment opportunities.

Target Consumers

• There is a readily available market in Japan (chain of consumer cooperatives) who place heavy emphasis on the traceability of consumed products to environmentally and people friendly initiatives. 

• These are a specific group of highly civic-minded consumers who will only purchase products which come from sources which respect human rights, i.e. they are interested in supporting small-scale producers and not large cooperation's that are often connected to environmentally unsustainable practices.

The chronology of events in the SCOP project since its inception in early 2011 

Activity Objective Date Venue By Notes/ OutcomesInitial agreement between PACOS and ATJ.

To conduct in-depth study of SCOP Project.

October 2010

- Representatives of Alter Trade Japan Ltd. and its counterpart, ATOP.

ATOP was established.

Official commissioning of SCOP Project.

To conduct in-depth study of SCOP Project with payment of RM50,000.

February 2011

- ATOP and ATJ. Commencement of SCOP project.

Participatory Needs Analysis

To conduct a baseline study on the socio-economy of the local communities;including production trends, market linkages of the existing farmers, needs, constraints, capacity and aspirations and land status of the local communities involved in oil palm production in the study.

7-11 March 2011

Five villages in the study area, namely Kampung Kopuron/Kampung Bestaria, Kampung Lumou, Kampung Malapi, Kampung Rumantai and Kampung Mangkadait.

ATOP, led by consultant environmental sociologist Dr. Savinder Kaur Gill

1. The local communities keen on organic oil palm and has no objections to the proposed mill at Kampung Kopuron;

2. The communities lack the finances and technical knowledge in managing a plantation;

3. Local communities already practicing basic organic farming;

4. Local communities need request assistance in organic farming and to increase their FFB yields;

5. More than 1100 hectares of oil palm planted in the five villages surveyed, which is sufficient for a 10 tonne/day mill.

Meeting with Malaysian Oil Palm Board (MPOB)

To review MPOB rules and regulations on Oil Palm Mills in Malaysia and to gauge/lobby for support for SCOP project

25 March 2011

MPOB Headquarters, Bangi, Selangor

ATOP representative, consultant environmental sociologist Dr. Savinder Kaur Gill

1. Land (FFB source) must be owned by the local community (community ownership can be considered);

2. MPOB regulations: minimum throughput for a mill in Malaysia should be 10 tonnes/hour, i.e.140 tonnes/day;

3. MPOB may fund the SCOP project, e.g. in the design and construction of a dedicated mill, refinery and store for organic palm oil production;

4. MPOB wants a business plan from ATOP;

5. MPOB recommended Modipalm Engineering to assist in designing a low throughput mill.

Needs Analysis Presentation and Meeting

To present the findings from the Participatory Needs Analysis2. To discuss the project viability and the next phase of the project.

29 March 2011

ATOP Office, Kota Kinabalu, Sabah.

Representatives of Alter Trade Japan Ltd. and its counterpart, ATOP, led by consultant environmental sociologist Dr. Savinder Kaur Gill

1. Feasibility study needed to gauge overall project viability;

2. Dr.Savinder to meet with Modipalm to have preliminary discussion on small-scale oil palm mill viability.

Meeting with Mr. Tan Yu Hwa, executive director of operations at Modipalm Engineering Sdn. Bhd.

To discuss the viability of designing and constructing a small-scale village palm oil mill in Telupid for a 10 tonne/day throughput of Fresh Fruit Bunch (FFB).

25 April 2011

Modipalm’s premises in Telok Datuk Panglima Garang, Selangor Malaysia.

ATOP representative, consultant environmental sociologist Dr. Savinder Kaur Gill

1. FFB throughput of at least 5 tph, (40 tonnes/day) needed;

2. Estimated cost for mill is RM 5 million, (additional 5% for organic oil palm);

3. Modipalm is able to integrate organic and non-organic FFB into the same mill;

4. Organic factor stems from planting process and not the milling;

5. Local communities must improve FFB throughput to at least 15 tonnes/hectare/year;

6. Modipalm expressed interest to assist ATOP in designing and constructing the small-scale village oil palm mill

Meeting with Modipalm Engineering Sdn. Bhd.

To further discuss the viability of designing and constructing a small-scale village palm oil mill in Telupid.

June 2011 Modipalm’s premises in Telok Datuk Panglima Garang, Selangor Malaysia.

Representatives of Alter Trade Japan Ltd. and its counterpart, ATOP, with consultant environmental sociologist Dr. Savinder Kaur.

Modipalm recommended an independent Auditor (Green Capital) to conduct feasibility study for the SCOP Project.

Feasibility study (site visit and review of laws and regulations for licences/permits to operate the mill)

To examine the feasibility of building a small-scale oil palm mill in the area, including the practical aspects and challenges of operating the mill.

20-23 June 2011

Kota Kinabalu and Telupid (Sabah)

ATOP, led by Green Capital Sdn. Bhd. (by Ir. Ong See Boon)

1. The proposed mill with 5-10tph is technically feasible;

2. Mill not optimum size, therefore, there may be inefficiencies;

3. Lower profit margin for community.

1. Internal meeting

2. Meeting with Nagarajah (Ministry of Plantation & Commodity

3. Meeting with Datuk Dr. Choo Yuen May, Director-General (MPOB)

1. Presentations of feasibility stidy findings.

2. To seek permission and support from the Ministry of Plantation and Commodities to proceed with small-scale community palm oil mill.

3. To form partnership with MPOB.

9-12 July 2011

1. Kuala Lumpur

2. Ministry of Plantation and Commodities in Putrayaja

3. KotaKinabalu,

Sabah

Representatives of Alter Trade Japan Ltd. and its counterpart, ATOP and Green Capital director, Ir. Ong See Boon

1. Mill is technically feasible.

2. Ministry requests for community consensus (statement of support, list of names, planted area) and to organise community into cooperatives and then proceed to apply to Sabah State Government for permission to contruct small-scale mill.

3. MPOB willing to provide technical and possibly material support.

Community Meeting

To give update and discuss follow-up action; collecting signatures and acquire 30 acres of land.

July-August 2011

Lumou village, Telupid, Sabah

ATOP directors with local communities (oil palm smallholders)

Signature campaign completed (473 signatories from 6 villages involving 2500 hectares of oil palm smallholdings).

Meetings pertaining to land for mill1.Lawyer2. Land owner3. Beluran Land Office

1. To seek advice on land purchase/transfer

2. To discuss land price with land owners.

3. Land search

July-August 2011

Kota Kinabalu and the project area

ATOP Directors • Land negotiations ongoing.• Land tranfer• Follow Land survey

Department

Commissioning of development plan

To detail out the SCOP development to facilitate application for mill-operating license.

20 August 2011

- ATOP, Green Capital Sdn. Bhd., headed by Ir. Ong See Boon.

Development will commence once the land deal for the mill is finalised.

KotohuadanThank you