YAP proposal #272: Processing Value-added Coconut Oil (Chris Fidelis, Papua New Guinea)

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My name is Chris Fidelis, 36, and a Papua New Guinean citizen. I am a graduate of the Papua New Guinea (PNG) University of Technology with a Master of Philosophy Degree in Agriculture and currently employed by the PNG Cocoa Coconut Institute as an Agronomist.

I undertake research on cocoa and coconut rehabilitation, on-farm trials, fertilizer trials and cocoa, and coconut-based farming systems. I own a coconut farm and so do my family and the surrounding communities.

I have recently registered my private business: Pacific Agriculture Support Services (PASS) as part of my business plan to process and supply coconut oil.

Processing Value-added Coconut Oil

Coconut, the ‘Tree of Life’ is the most abundant, low-input, sustainable-agriculture resource, and a primary source of income for farmers in the East New Britain Province (ENBP) of PNG.

Due to continuous yearly decline in copra prices, I am focusing on producing coconut oil to supply local and overseas markets.

In my project, I will use the direct micro-expelling or DME technique to produce coconut oil.

The process bypasses the tedious process of making copra, to produce high quality value-added coconut oil or VCO for short.

Basically, the process involves collection of dried matured nuts and de-husking, breaking the nuts, and scraping the flesh.

After scraping, the product will be dried to reduce the moisture content before extracting the oil. The oil obtained will be deodorized by slowly heating it in 50% water to remove unwanted coconut odour and to sterilize the oil.

The oil will be physically refined through settling and filtrating to remove suspended fine particles. The final product will be bottled as VCO for marketing.

I plan to establish my VCO production facility that would reduce production costs for farmers involved in processing and transport of copra.

The project is realistic and eco-sustainable as nuts are continuously falling from existing trees without the need of clearing new land for planting.

Coconut wastes will be left to decay on farms compared to their common use for heat generation in copra processing. Such VCO facilities are also unavailable at my target location in ENBP, PNG.

The Motivation

The desire to own and operate a private business earlier in life has motivated me to produce this submission.

The daily struggles of local coconut farmers associated with producing and selling copra, and the low price offered by major buyers is another motivating factor. I am also motivated because there is high demand locally and internationally for VCO and also coconut oil has been proven to have nutritional and medical values.

My facility will process at a rate of 10 nuts per litre (L) VCO. Based on this, 300 nuts will be processed per day for five days in a week to give 150 L VCO.

I hope to produce up to 600 litres of VCO every month for six months.

The projected gross revenue will be USD 25,200 (priced at USD 7 per litre) and the net profit will be USD 10,200. The current average disposable income of farmers is USD 3.5 per day and the project is expected to increase this by 50%.

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Getting There

First, I have already cleared and prepared the building site and will need to construct a small building that has a corrugated roof to house equipment and workers.

Second, I will purchase a coconut oil hydraulic press, coconut flesh shredder, and purchase materials to fabricate a drying plate and scraper. These are the VCO processing equipment.

Third, my family is already a partner and I have identified other farmers through government extension networks. I will need to make agreements with them for pricing and supply of undried coconut flesh.

I have also researched and identified interest from local and international buyers. I have to confirm their requirements and make agreements.

Finally, I will purchase nuts and/or undried coconut flesh and process VCO.

The measurable success factors for my project will be the volume of undried coconut flesh purchased and/or processed; volume of coconut oil produced and sold or exported every month including the net profits generated against expenses.

My business is just establishing itself and I will meet the costs of all minor labour and some building materials. I already have tools and other equipment required to construct the building. However, I would need the grant to fund:

  • Facility infrastructural work – USD 1,000 to spend between Months 1 and 4
  • Processing equipment (purchase & fabrication) – USD 2,000 to spend between Months 3 and 6
  • Purchase of raw materials – USD 900 to spend between Months 7 and 12
  • Labour (processing VCO) – USD 700 to spend between Months 7 and 12
  • Miscellaneous (travel, packaging & marketing costs) – US$400 to spend between Months 7 and 12

 

Blogpost and picture submitted by Chris Fidelis (Papua New Guinea): pacificagriculture15[at]gmail.com

The content, structure and grammar are at the discretion of the author only.

Illustration courtesy of Donald Sogovare, PNGCCIL

 

This post is published as proposal #272 of “YAP” – our “Youth Agripreneur Project”.

The first selection of the winners will be based on the number of comments, likes and views each proposal gets.

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21 thoughts on “YAP proposal #272: Processing Value-added Coconut Oil (Chris Fidelis, Papua New Guinea)

  1. You mentioned you were working with both coconut and cocoa. Can you tell us a little about what you are doing with the cocoa? Thank you.

    1. Yes, that is the PNG Cocoa Coconut Institute, a government research institution. I am proposing a private operation. But for your information, cocoa is harvested, fermented for 4 to 5 days, then dried using heat from fire and also solar. Most big companies here are doing this, but I would like to start up my own village level operation.

  2. It appears to be a good venture, which will also help local farmers. If the quality is ensured there will be market demand. A perfect and realistic business plan is necessary to avoid any financial problems.

  3. Coconuts are abundant in supply across East and West New Britain, Papua New Guinea. The reason why rural people do not seriously produce copra is because of its low price compared to cocoa and oil palm. However, an alternative local market especially one that cuts out the laborious work of processing dried copra for fresh-fallen nuts, is an excellent investment. The supply will not be a problem provided the producers get a good margin off the cost of transporting their coconuts to the mill. The challenge lies in the quality of output oil, a good overseas market for both crude and refined and Government imposed export fees.

  4. Congratulations for the initiative.
    I feel I need to address some considerations.
    The price of $7/liter is not matching international prices, that are currently around $4.5/liter, so unless you have local sales for the price your are considering, you should review your data.
    You don’t need to scrap the flesh (nut) if the only product you target is VCO. Actually the brown skin have a more concentrated oil than the nut itself.
    If you decide to do so, then you can dry the pared skin and obtain oil from it too.
    You should also consider producing Low Fat desiccated coconut as a by-product of your project.

    1. Thank you Giovani for the very useful comments. I will reconsider my pricing if my project gets YAP support. As for the VCO, I was planning to scrap the flesh and use that to produce VCO. I also have plans to extend activities to dessicated coconut once we are up and running. Other by-product we plan to look at in future is using coir from the husks to produce mats, matress and soil rehabilitation nets. As you suggested using the brown skin, I will consider this as well.

  5. Hi Chris, value-addition is the way to go for commodities that are fetching low price in their raw/crude form. Coconut value chain in PNG needs smart initiatives such as this to drive the industry forward and restore the drive back into farmers who have abandoned their coconut plantations and ventured into other enterprises. I fully support your idea!

  6. Hefung, I have seen this in many parts of the country. Government have not provided incentives for coconut farmers and most are just into copra processing without any plans for downstream processing. I am planning initial work in East New Britain and will expand if starting capital is funded through the YAP.

  7. I like the proposal, it is an excellent means by which rural people can fully participate in economic development and improve their lives. Way To Christ!!!

  8. Great project, you align yourself well with the government policies on downstream processing. Keep the ball rolling.

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