From Viability to Resilience: Technical–Economic Insights into Palm Oil Production Using a FP2O Approach

Abstract

This work presents an assessment focused on technical, economic, and resilience-related aspects applied to a crude palm oil production process using the FP2O methodology, considering a capacity of 30 tons of fresh fruit bunches (FFB) per hour and an annual production of 54,056 tons of oil per year. Operating parameters, capital and input costs, as well as the total investment, which amounts to approximately US$43 million, distributed between fixed capital, working capital, and start-up costs, were established. The analysis identified annual operating costs of US$24.7 million, with a majority share of raw materials. Economic and financial indicators showed positive values, higher than previous studies, highlighting a gross profit of over US$23 million, an after-tax profitability of US$13.7 MM, and an internal rate of return of 25.29%, which demonstrates the economic viability of the process. A simple payback period of 1.62 years and a discounted payback period of 4.88 years were determined, in addition to a positive net present value of $58.74 million, confirming the project’s profitability over a 15-year horizon. Using the FP2O methodology, the technical and economic resilience of the process to variations in product price, raw material costs, processing capacity, and normalized operating costs was evaluated. The results showed sensitivity to reductions in the oil sales price, while also demonstrating high resilience to increases in palm bunch costs and decreases in processing capacity. Furthermore, the break-even analysis revealed that the plant can operate 36.59% below its maximum capacity and maintain positive margins, requiring a minimum of 87,825 tons of raw material per year and a sales price of $482.35 per ton to avoid losses. This research highlights the applicability of the FP2O methodology as a strategic tool for scaling up crude palm oil production processes, guiding investment decisions, and supporting policies that promote more resilient and sustainable agro-industrial systems.