Projects > Brief descriptions > Enhancing the Competitiveness of the Palm Oil Value Chain

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For further information please contact:
Dr James Tomecko
Email: james.tomecko@giz.de

Enhancing the Competitiveness of the Palm Oil Value Chain

Project description

Title: Enhancing the Competitiveness of the Palm Oil Value Chain
Commissioned by: Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ) (Federal Ministry for Economic Cooperation and Development)
Country: Thailand
Lead executing agency: The Department of Industrial Promotion (DIP)
Overall term: October 2005 to September 2007

Context

Palm oil is becoming an increasingly attractive vegetable oil. Not only is it used in a wide range of cosmetics and pharmaceuticals; it is the world's second largest edible oil, following closely behind soya oil. The world market for this oil is growing constantly at about 8 percent per annum. While Thailand is the fourth largest producer of palm oil, Indonesia and Malaysia each produce about ten times more than Thailand. Altogether more than 70,000 households are engaged in this sector in the three southern provinces of Suratthani, Chumpone and Krabi. As diesel prices continue to escalate, opportunities will continue to open in this sector for the conversion of crude palm oil into bio-diesel. The Royal Thai Government is pursuing the policy of expanding the acreage under plantation fivefold over the next 20 years.

Objective

The purpose of the project is to enhance the competitiveness of the palm oil value chain in Thailand by improving the business performance and productivity of plantations and crushing mills and by supporting innovations in eco-efficiency such as biogas production and energy conservation.

Approach

The methodology involves conducting a detailed sector analysis to identify key constraints and opportunities related to improving the sector’s competitiveness and subsequently designing specific measures to address these constraints and opportunities. The project will focus on the “upstream“ part of the value chain from plantation input suppliers (fertilisers and seedlings) to the plantations and then on to the transporters and crushers. The most important competitiveness issues will be increasing the quality and quantity of fresh fruit bunches supplied to the crushing mills and improving the oil extraction rate and eco-efficiency of the crushing mills.