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How to Set Up a Small Palm Oil Mill?

2026-05-08 HUATAI

How to Set Up a Small Palm Oil Mill?

Setting up a small scale palm oil mill involves several sequential steps, each requiring specific equipment and procedures.

 Fruit Reception

Receive and store fresh palm fruit bunches (FFB) from the field or market. The storage site should be close to the palm plantation to ensure fresh supply.

Sufficient space should be reserved at the storage site for truck unloading and manual handling. FFB needs to be processed within 24-48 hours to maintain the quality of palm oil.

 Threshing and Sterilizing

Fresh fruits (FFB) are fed into a palm fruit thresher, which separates the fruits from the bunches.

The fruits then enter a sterilizer where high temperature steam softens and sterilizes them, thereby inhibiting enzyme activity and preventing it from increasing free fatty acids (FFA).

Cooking the Palm Fruits

After sterilization, the palm fruit is steamed in a digester to further soften the pulp in preparation for pressing. This step improves oil yield by breaking down the cellular structure.

Palm Oil Extraction

Cooked palm fruits are pressed in screw palm oil presses to extract palm oil. The pressing process separates the palm oil from the fibers and nuts, of which the fibers are commonly used as biomass fuel.

Oil Filtering and Refining

Crude Palm oil is clarified using vibrating screens and clarification tanks to remove solids and water. Subsequently, the oil is passed through filters to remove fine impurities.

Unrefined palm oil contains free fatty acids, moisture, dirt, phospholipids, fiber mixtures and pigments.

Refining (degumming, decoloration, deacidification and deodorization) can further improve palm oil quality. 

Filtered Crude Palm Oil is stored in tanks and drums, ensuring that the tanks or drums used for storage are covered with a protective coating. Appropriate storage conditions (maintained at 50°C) will extend the shelf life.

Package

Finally, Package oil in bottles or drums, adding branding and labels, for sale and distribution. Efficient packaging ensures product safety and market readiness.

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Setting Up a Palm Oil Processing Plant Cost

The setting up a small scale palm oil processing plant cost varies widely based on capacity and equipment configuration.

A mini palm oil processing plant with a capacity of about 500 kg/hour costs approximately $6,700. This setup typically includes a simple thresher, screw press, and filter.

A small to medium scale plant with 1-5 tons per hour capacity ranges from $100,000 to $260,000, depending on automation level and equipment quality.

Larger plants with capacities above 10 tons per hour can exceed $1.7 million.

Additional costs may include:

Land and Building: Varies by region and size.

Utilities: Power and water supply for processing.

Labor: 2-3 workers for automated plants, more for manual operations.

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