A BUSINESS CONCEPT PROPOSAL!FOR THE ESTABLISHMENT OF

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Osborne Welch
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increased business opportunities for producers and exporters of palm products in developing countries in general, and for several ECOWAS member countries in

1 A BUSINESS CONCEPT PROPOSAL!FOR THE ESTABLISHMENT OF BACKGROUND The continuous growth of the international demand for, and trade in oil seeds, oils, fats and oil meals has exceedingly increased business opportunities for producers and exporters of palm products in developing countries in general, and for several ECOWAS member countries in particular. However, these opportunities remain only partly exploited due to investment and trade development constraints, the insufficient knowledge of palm products and the inadequate information made available to palm sector stakeholders on markets, products and business opportunities.

ENHANCEMENTS This concept proposes to carry out an updated feasibility to enhance export supply and market linkages for palm seeds and fruit juice products through establishment of mill plants and

passion fruits, pine-apples, oranges, mango, and cashew.

Mali, Nigeria, Senegal, Sierra Leone and Togo) by providing producers, and local farmers with the economic (investment funding, technical and market) advantage for improving their farm yields,

2 ENHANCEMENTS This concept proposes to carry out an updated feasibility to enhance export supply and market linkages for palm seeds and fruit juice products through establishment of mill plants and fruit juice industries in Sierra Leone with special focus on small and medium size and farmers and farm communities The commodities selected for the initial phase of the programme are palm products, passion fruits, pine-apples, oranges, mango, and cashew. OBJECTIVE The programme aims to contribute to the development of palm industries in ECOWAS (Members: Benin, Burkina Faso, Cape Verde, Côte d Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Nigeria, Senegal, Sierra Leone and Togo) by providing producers, and local farmers with the economic (investment funding, technical and market) advantage for improving their farm yields, processing and trade of palm products. The project could contribute to bestowing the improvement of profitability and competitiveness of West African exports of palm products and the increase of trade operations performance, thereby boosting local farm yields and value adding to attract international market preferences, increasing national foreign exchange earnings and ultimately contributing to regional food security and capacity building in the oil palm and fruit juice agri-

business industries. The programme is conceived as a basic tool for training events on palm products and markets for the benefit of palm business communities.

3 business industries. The programme is conceived as a basic tool for training events on palm products and markets for the benefit of palm business communities. By providing the basic understanding of factors palm sector development strategies, the proposers intends to facilitate the process and thereby contribute to the sustainable development of palm production and processing. PILOT INVESTMENT AGRI-BUINESS (Edible & by-palm product) Oil palms are at the base of the complex palm oil industry. The multiple outputs of their processing are summarised in Figure 1.Fig. 1 (An Example of a palm oil industry with multiple processing outputs)

5 Three main products and numerous derived ones are obtained by extraction and processing palm fruit bunches. From the fleshy portion of the oil palm fruit is extracted the crude palm oil, together with its primary derivatives- neutralised, bleached, deodorised, and refined/bleached/deodorised RBD palm oils; crude palm stearin and olein. From the seed, kernel of the palm fruit is extracted the palm kernel oil, further primary processed to refined palm kernel oil and palm fatty acids, alcohols, esters and glycerine derivatives. The two oils have very different fatty acid compositions. Palm kernel oil meal is the by-product of palm kernels crushing, used as animal feed ingredient. Empty bunches remaining after the removal of oil palm fruits, as well as palm kernel shells and fibre remaining after the crude palm kernel oil extraction, are used as fertilizers and as fuel. A sap tapped from the palm flower is processed into palm wine and is also a source of yeast. The tree itself can be split and used as supporting

6 frames in buildings. Leaf fibres and empty fruit bunches are used to produce chipboard and plywood. After clearing out plantations, trunks of old palms provide furniture wood. The bark of the palm frond is peeled and woven into baskets. The leaves of oil palm are used for making brooms, roofing and thatching, baskets and mats, while the thicker leaf stalks are reinforcing the walls of village huts. Palm oils have a multitude of food utilizations, often in competition with other vegetable oil substitutes. The crude palm oil is one of the main and richest sources of carotene (which confer the bright red color to the oil). Its other valuable constituents are vitamin E fractions which act as antioxidants and can reduce cell damage caused by toxic substances and environmental pollution. In addition, the oil is an excellent source of powerful anti-carcinogenic and anti-thrombosis substances groundnut, maize or coconut oils in the manufacture of shortenings, confectionery products, ice creams, and milk and cocoa butter substitutes. Palm and palm kernel oils are also feed stocks for the manufacture of oleo chemicals including fatty acids, fatty esters and fatty alcohols. Derived non-edible uses of palm oil include the manufacture of soaps and detergents, candles, cosmetics, lubricants, greases, drilling mud for the petroleum industry, plasticizers, glues, printing inks, etc. Palm oil- based environmentally friendly biodiesel fuel is increasingly used and economically more advantageous than other oilseed-based biofuels. Palm kernel oil and coconut oils are the two lauric oils of commercial importance. They are interchangeable in many applications because of their similarities in properties. However, palm kernel oil contains a higher amount of oleic acid than coconut oil, making it more suitable oil for hydrogenation (hardening) and the production of edible speciality fats with different melting points, hardness and end-uses. These fats are used in the production of coffee and cocoa butter substitutes, toffees, coffee whiteners, whipped toppings, filler creams and other non-dairy products. The relatively high content of myristic and lauric fatty acids of the palm kernel oil makes it very suitable for the manufacture of soaps, washing powders and personal care products. Other non-edible applications of the oil include candles manufacture, as well as the pharmaceutical and perfume industries. Crude and primary processed palm and palm kernel oils have already a multitude of applications when utilised as such; the range of applications can be however extended by modifying their properties by secondary processing (refining). Although the palm oil markets are facing major challenges, palm industry is a highly profitable and evolved into a global agro-industry. The dominant position of palm oil in the global supplies of vegetable oils is due to its competitive position in comparison with the other of oils: the oil palm yield per hectare is 5 to 10 times higher than other oil bearing crops and its cultivation has the lowest requirements of fuel, fertilisers and pesticides. The specificity of oil palm is that through processing its fruits yields three very distinct primary palm products: palm oil, palm kernel oil and palm kernel meal.

7 The supply of palm products is determined by the demand for palm oil for edible and biodiesel uses, and influenced only to a limited extent by the demand for lauric oils (palm kernel) or for animal feed (palm cake). In addition, oil palm is an investment crop. The stability of supply of this perennial tree crop is higher than that of annual oilseed crops such as soybean or rapeseed. However, oil palm production can hardly be adjusted to short term variations in world demand and prices of vegetable oils, unlike the annual oilseed crops. Palm oil is of particular importance to West Africa. According to FAO, the oil is currently providing 8 per cent on the average of the daily energy intake of the population. West African development potential of oil palm plantations and processing industries attracts the keen interest of investors, multinationals, commodity traders and business developers. Some examples of the growing interest and considerable financial involvement of foreign groups and corporations in the palm sectors in Nigeria, Liberia and Côte d Ivoire are summarised Annex II. The ECOWAS region is a net importer of palm oil, although many of the member countries cultivate oil palms and have the potential to increase their production of palm oil in order to meet both the domestic and the regional demand, in particular the needs of ECOWAS member countries with vulnerable economies and high rates of hunger. The ECOWAS deficit for edible oils which has to be covered by imports is estimated to reach nowadays to tons per year and is foreseen to increase to some 1.5 million tons by The cost of imports of palm oil or its substitutes, such as soybean or sunflower oils - generally supplied by countries where production and exports are subsidised, exert a very strong pressure on foreign exchange balances of ECOWAS member countries. Meanwhile, the availability of relatively low-cost imported oils diminishes the competitiveness and development prospects of domestic oils and fats industries. However, recent development strategies and substantial investments into oil palm cultivation in the region should result in a large increase of palm oil supply in the medium term. The major characteristics of the vegetable oils markets, palm oil included, are the overwhelming weight of governmental policies on the sector development; the volatility of prices and the impact of speculation; and the correlations between the consumption and prices of several oils due to their substitutability for major uses. POLITICAL WILL Governmental policies and interventions in production, marketing and international trade in palm products are elaborated and continuously reappraised and adjusted under the influence of specific domestic and international market developments, with a view to achieving stability and balanced growth of the sector, as well as the satisfaction of consumers needs. Various policy instruments are available and applied, although their intended purposes most often induce unintended side effects and create strong distortions within the domestic and international vegetable oils markets in general, and in palm oil markets in particular. Market distortions are induced not only by policies addressing straightforwardly oil palm cultivation, processing, consumption, trade and prices, but also by policies affecting the economy of palm oil substitutes, i.e. soybean, rapeseed and

8 sunflower oils. Commonly, policies of palm exporting countries tend to support domestic producers and exporters, while importing countries tend to apply measures leading to border protection, in an effort to shield domestic industries from international competition and high consumer prices. WASTE MANAGEMENT IN PALM OIL REFINING The characteristics of palm oil refinery effluents vary according to the type of refinery operations (chemical or physical refining and fractionation processes), as well as with the process monitoring and control systems used. The choice of treatments depends very much on the characteristics and flowing conditions of the raw effluents. Although the palm oil markets are facing major challenges, palm industry is a highly profitable and evolved into a global agro-industry. The dominant position of palm oil in the global supplies of vegetable oils is due to its competitive position in comparison with the other of oils: the oil palm yield per hectare is 5 to 10 times higher than other oil bearing crops and its cultivation has the lowest requirements of fuel, fertilisers and pesticides. The specificity of oil palm is that through processing its fruits yields three very distinct primary palm products: palm oil, palm kernel oil and palm kernel meal. The supply of palm products is determined by the demand for palm oil for edible and biodiesel uses, and influenced only to a limited extent by the demand for lauric oils (palm kernel) or for animal feed (palm cake). A BUSINESS CONCEPT PROPOSAL!FOR THE ESTABLISHMENT OF PALM OIL MILL INDUSTRY We need to:. 1) carry out detailed feasibility studies of short listed sub-projects, including review of market research, develop business plans, environmental and social safeguards requirements for the production, processing and value chain marketing of palm products for edible and biodiesel local and international markets,. 2) analyze the market opportunity; and develop concept process alternatives for meeting the opportunity;identify challenges; develop order of magnitude capital cost estimates (CCE); and select process alternatives for further development.. 3) initiate discussions with potential suppliers, customers, financiers, regulating bodies, environmental groups and other stakeholders; select plants location; develop plant layouts in sketch form; develop capital cost taking local requirement considerations.. 4) carrying out detailed feasibility studies of short listed sub-projects, including review of market research,

9 business plans, environmental and social safeguards requirements, and designation of selected Subprojects for further investment support under the project. DELIVERABLES Market opportunity A palm products for edible and biodiesel market opportunity in Sierra Leone, Liberia & Guinea is identified and rough costs and possible profits established. The market opportunity is analyzed; concept process alternatives developed for meeting the opportunity; challenges identified; order of magnitude capital cost estimates (CCE) developed; and one or two process alternatives selected for further development. Discussions with Stakeholders Budget Development Discussions are initiated with potential suppliers, customers, and local farmers and farm associations, regulating bodies, environmental groups and other stakeholders; palm products processing plants and manufacturing location selected; plant layouts developed in sketch form; Capital Cost Estimation developed for the selected alternatives; a final alternative selected for development; and a bankable business plan for project execution is established. On-going discussions with potential suppliers, customers, financiers, regulating bodies, and other stakeholders, the intent being to establish memorandums of understanding (MOU s) with each party; sufficient engineering done to support the development of a Budget CCE; and preliminary discussions with potential contractors. Detail Design MOU s in place with suppliers and customers; financing is in place; permitting well under way; detail engineering completed for all disciplines. PRE COMMITMENT BUDGET TIMELINE 1) Rural In-land Travels (Vehicle Operation Fuel & Maintenance) to & from potential project areas in rural locations $$2,500 2) Office Overhead, (Internet Connectivity, Stationery and ICT Equipment) $2,000 Total $4,500

Palm Oil Policy. Policy Name: Palm Oil Issue Number 008 Date of Issue: Dec 2016 Date of Approval Dec 2016 Policy Originator: Clare Hazel Page 1 of 5

Palm Oil Policy. Policy Name: Palm Oil Issue Number 008 Date of Issue: Dec 2016 Date of Approval Dec 2016 Policy Originator: Clare Hazel Page 1 of 5 Palm Oil Policy EXTERNAL STATEMENT Summary Premier Foods is a member of the Roundtable on Sustainable Palm Oil. Our membership commits us to actively support the continuation of the Roundtable process