Our oil extraction rate (“OER”) and kernel extraction rate (“KER”), which indicate the amount of CPO and palm kernel extracted from a given amount of FFB respectively, have been increasing over the years. Since we generate revenue mainly from CPO and palm kernel, and incur costs as we purchase FFB, we believe that measuring both OER and KER better reflects our profitability. The following table sets out the OER and KER during the three years ended July 31, 2022:
The following chart illustrates the principal production process involved in the manufacture of our Palm Oil Products. All of our Palm Oil Products are produced during the same production process and there is no separate production process for each product. It takes approximately 2.5 hours from sterilization and softening of FFB to the last stage of the production process.
Production process starts with the procurement of FFB. Farmers and FFB sellers deliver FFB to FCCs and palm oil mill throughout the years. There are 19 FCCs located across Perak, Kedah and Penang.
The staff conduct quality checks on FFB on the spot FFB delivered to FCCs and palm oil mill. Unripe FFB is rejected and returned to the sellers.
Again, quality check is conducted at mill accordance with the standards set by MPOB. FFB, which does not satisfy the quality requirement, will not be used at production.
Use accepted FFB for steam sterilizing. This process softens FFB for further processing.
FFB comprises fruit bunches and fruits. Sterilized FFB are moved to a rotating drum known as a thresher to separate fruits from fruit bunches. The output of this process are sterilized fruits and EFB. Both sterilized fruits and EFB can be used for the extraction of CPO.
(a) Digester
Sterilized fruits are shredded in a digester.
(b) Sterilized Fruit Press
Extract CPO from shredded and sterilized fruits with a sterilized fruit press. The resultant of this process is known as a press cake. Press cakes are send to a depericarper.
(c) EFB Press
Extract CPO from EFB with an EFB press for CPO extraction. The remainder is pressed and shredded to become fiber, one of side products.
Fiber and nuts in press cakes are separated in a revolving machine known as a depericarper. Fiber is used as fuel for boiler to generate steam. This steam propels the turbine which generates electricity for palm oil mill.
The nuts from Depericarper are dried in the Nut Silo and cracked in Nut Crackers to release Palm Kernel from shell. The mixture is thereupon separated in the kernel-and-shell separator. The shell is also conveyed to the boiler for steam generation. Palm Kernel is dried in the kernel Silo.
The crude oil at this stage consists of a mixture of oil, water and other fine solids. This mixture is passed to a continuous clarification tank, from which the top oily layer is skimmed to a centrifugal purifier to separate the oil from the denser impurities.
Deliver CPO and palm kernel to the refineries of customers. The customers may also collect the palm oil products from palm oil mill. There is a fleet of four CPO tanker trucks.