World Bank Document · industry from raw materials and milling to refining and marketing aspects....

THE WORLD BANK FAU 2S

FA U-02

II

SECTORAL LIBRARYINTERNATnONAL HANK

FORRECONSTRUCllON AND DFVELOPMENT

FEB I z 1986

Agro-Industry ProfilesOIL SEEDS

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PROFILES IN THIS SERIES:

OILCROPS - OVERVIEW ........... FAU-01

OIL SEEDS .................. .. FAU-02

OIL PALM........... ...........FAU-03

COCONUT......,., ... . . . . . . . . .. oFAU-04

SUGAR .e.. .. .. . ....... .. .. . FAU-05

ETHANOL ........ .. 9.. *e..o....o. . FAU-06

WHEAT..o. ................ .. .FAU-07

RICE oo.o..oo..oe..**............FAU-08

CORN. . .. ..... . ... ... . . . . ..FAU-09

CASSAVA..*.o. o ... ..... .. . . . . . . . .FAU-10

ANIMAL FEEDS ................. FAU-11

FRUITS AND VEGETABLES...... .o. .FAU-12

RUBBER . . ooo. . . .. . . . . . . . .FAU-13

COFFEE ...... .... . . .. .FAU-14

TEA .oo .. *.**** o.*.*............ FAU-15

COCOA ......................... FAU-16

COTTON o....................... FAU-17

MEAT ....... ........ .......... FAU-18

SPICES AND ESSENTIAL OILSo.o.o..............FAU-19

ABSTRACT

The objective of this Profile is to provide a technical review ofthe oilseed processing industry. It explores the oilseedindustry from raw materials and milling to refining and marketingaspects. It contains specifications of seed composition and oilyields, a glossary of key words, and indicates useful references.It traces milling and refining processes, touching upontraditional systems as well as modern mechanical and solventprocesses. Storage, cleaning and decortication, pre-treatmentand pressing (continuous and batch) are addressed. Bleaching,hydrogenation, winterization, deodourization and end uses arediscussed. Marketing aspects, such as product and by-productuses are covered, as are plant site and space requirements, sizeconsiderations and environmental concerns. It concludes withspecific comments on cottonseed, groundnut, maize (corn),rapeseed, safflower, sesame, soybean, and sunflower oils.Examples of investment and operating costs are presented in anAnnex.

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FOREWORD

The nature of project and sector work in the World Bank is suchthat staff are often called upon to work outside their majorfields of specialization, if only to make an initial judgement onthe utility of further, often costly, investigation. Under thesecircumstances, up-to-date and authoritative reference material isessential.

The profiles in this series are designed for use by operationalstaff with experience in the agricultural sector but who do not

* have a technical knowledge of the particular commodity underdiscussion. Their purpose is not to substitute for technicalexpertise but to provide a reliable inhouse reference which willhelp Bank staff to determine when and what expertise is needed inthe detailed evaluation of investment proposals in agro-processing.

The conditions for any particular proposal are bound to be uniquein a number of respects, and the use of norms and general data inproject analyses could give rise to significant errors. On theother hand, by providing responsible staff with a guide to theissues on which appropriate expertise should be sought, theseprofiles can contribute to the overall quality of agro processinginvestment. Used with care, they should also facilitate broad0 pre-screening such as may occur during sector work andreconnaissance.

Questions, comments and further inquiries should be addressed to:

Agro-Industries AdviserFinance and Agro Industry UnitAgriculture and Rural Development Department

The contribution of the Food Protein Research & DevelopmentCenter, Texas A & M University, in the review of this profile isgratefully acknowledged.

September 1985

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0 Oilseeds

CONTENTS

^ ~~~DATA SHEET ......... ................. ................. a

GLOSSARY ...................... * 1

MILLING .................... . . . .. . . . . . . 4

REFINING .................................... .. o........13

MARKETING ASPECTS ................................ l9

OTHER FACTORS ............................... ........... . 21

COTTONSEED ..............................o............ .....24

GROUNDNUT ....................... o........................ 25

MAIZE .................................................. 25

I ~~~~RAPESEED ..... .oo .................... ......... 26

i * ~~~SAFFLOWER ..................... .................. 27

SESAME SEED .............................. ............ ....27

SOYBEAN .................................................. 28

SUNFLOWERSEED ................. .... .. ................ . . 28

BIBLIOGRAPHY ....................................... .30

ANNEX I OPERATING AND INVESTMENT COSTS

ANNEX II CONVERSION TABLES (METRIC/US)

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Oilseeds

DATA SHEET

Typical Seed Composition (%)

crude meal proteinoil in meal

Castor 45 55 @Cottonseed 15-25 44 38Groundnut* 45 55 45-55Linseed 34 63 33Rapeseed 40-46 54-60 30-40Rice Bran 15-20 5-8Safflower** 30-35 65-70 22Sesame 47 52 40Soybean 13-20 79 42-48Sunflower 30-45 37 37

* shelled.** with hulls.@ meal is toxic.

--------------------------------------------------

Average Yield per Metric Ton of Clean Seed

crude mealoil

Cottonseed 160kg 440kgGroundnut* 450kg 510kgRapeseed 350kg 570kgSafflower 300kg 650kgSesame 450kg 530kg

' Soybean 170kg 810kgSunflower 350kg 380kg

* shelled.

Note : No allowance is made for moisture changes or losses.

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GLOSSARY

Fats and oils have a similar chemical composition comprising onemolecule of glycerol combined with one or more of a variety offatty acids. The difference between a fat and an oil is largelydetermined by the melting point of the fat. Fats with lowermelting points tend to be liquid at room temperature and aretermed oils. Fats with higher melting points are generally solidat room temperature and are termed fats (Room temperatures varybetween locations and an 'oil' in Africa may become a 'fat' inEurope). The melting point of a fat is determined by the chemicalmakeup of its fatty acids, in particular the amount of hydrogenpresent. Fatty acids with less hydrogen present are 'unsaturated'and possess lower melting points. Fats which are fully'saturated' with hydrogen have higher melting points. The degreeof saturation can be manipulated by addition or removal ofhydrogen - hydrogenation.

Bleaching Removal of colour-producing substances fromrefined oils.

Cake Residue after mechanical extraction of oil.

Decorticating Removal of husk or hull from seed, cake ormeal.

Degumming Removal of non-oily constituents from crudeoil; first stage of refining.

Dehulling Decorticating.

Delinting Lint removal from cottonseed after ginning.

Deodourizing Removing undesirable odours from refinedoils.

Expeller Mechanical screw-press for oil extraction.

FFA Free Fatty Acids.

Fines Fine meal particles found in the miscella.

Fractionation Separation of crude or refined oil intosolid and liquid fractions, usually appliedto palm oil.

* ~~~~~~~~~~~~~1

Free Fatty Acids The acidity of an oil is measured by itspercentage of FFA; lower percentages aredesirable

Glycerides Lipids which are attached to various fattyacids.

Hull The husk or fibrous outer part of anoilseed.

Hydrogenation Process which converts liquid unsaturatedoil to solid fats.

Lecithin Derived from phosphatides removed atdegumming. Used as wetting or emulsifyingagents in food products and in non-foodapplications as stabilizers, antioxidantsand emulsifiers, and as dispersants intextiles, rubber, paint and lubricants.

Meal Widely used to describe residue aftersolvent extraction.

Milling Primary processing, the main object of whichis the extraction of crude oil.

Miscella Mixture of oil and solvent formed duringsolvent extraction.

Neutralizing Removal of free fatty acids from crude oil;second stage of refining.

Olein Liquid fraction from fractionation.

Phosphatides Fatty acid compounds (including lecithins)released from vegetable oils duringdegumming by hydrolysis and centrifuging.

Rancidity Spoilage of the taste and smell of oils andfats by oxidation, microbiological attackor enzyme action.

Refining Secondary processing or purification ofcrude oil to remove free fatty acids,phosphatides, and other impurities.

2

Saturation Fats differ in their chemical composition,specifically their hydrogen content. Fatswith more hydrogen are 'saturated' and tendto be solid at room temperature. Oils withless hydrogen are 'unsaturated' and tend tobe liquid at room temperature.

Soapstock Fatty acids which are broken from theirglycerol molecule become 'saponified' orconverted into water-soluble soap which isremoved during neutralization.

Stearine Solid fraction from fractionation.

Tocopherol Natural substances occurring in vegetableoils which inhibit oxidation.

Winterizing Treating oil so that it remains clear andliquid under cold conditions.

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* 3

MILLING

Introduction

The objective of the milling process is the maximum economicextraction of crude oil and the production of residual meal andcake.

Most mills concentrate on one species of oilseed, but rawmaterial availability and market conditions often make itattractive for the mill to process several species. With somecare at the design stage the same basic processing equipment canbe used for most oilseeds with minor adjustments. Some stagessuch as delinting or decorticating are essential to only specificspecies and their installation and use in a particular milldepend on the most likely species mix of raw materials.

Traditional Methods

Traditional systems rely on animal or manual power to crush theseed. In most cases, grinding is performed by some combination ofsimulated pestle and mortar. The resulting paste is heated andthe oil extracted by pressing. Extraction rates between 28 and60% of oil content can be obtained depending on the original oilcontent of the seed being crushed. The residual cake usuallycontains about 10% oil.

Current Milling Systems

Oilseed milling processes in common use today are based on one oftwo principles. The first is the mechanical expelling of oil fromprepared seed under pressure. The second is solvent extraction inwhich the seed is immersed in liquid, usually hexane, in whichthe oil dissolves. The solvent is later boiled off and condensedfor re-use, and the extracted oil recovered.

Based on these principles of mechanical and solvent extraction,three milling systems or configurations are used. (See Flowchart1.) The mechanical system, which relies solely on mechanicalpressing, uses one pressing to obtain as much oil as possible. Inthe more modern direct solvent process oil is extracted withoutpressing. Finally, the pre-press solvent process uses acombination of mechanical pre-pressing followed by solventextraction.

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SeedStorage

Cleaning

Delinting(Cottonseed)

I *L _ _ __ _ … _ _____1

Decortication

Pre-treatment

mechanical pre-press solvent direct solventprocess process process

expelling partial-expelling

cake

solventextraction

miscella meal

desolventizing

cake crude crud mealoil oil

Flowchart 1: Oilseed Milling illustrating alternate systems(broken lines indicate optional stage)

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In terms of output, the three systems perform differently. Thosesystems using solvent extraction techniques obtain more oil fromthe seed. Mechanical presses usually produce a cake containingabout 5% oil, while solvent extraction produces a meal with lessthan 1% oil.

The high-pressure continuous screw press has some advantages oversolvent extraction. These include lower capital costs, greaterflexibility among crops, shorter construction period, simplerprocess control, lower operating skill requirement and less firerisk. Disadvantages, in addition to lower oil recovery rates,include high power consumption, high mechanical wear, and theneed for skilled maintenance to ensure efficient operation.Generally the single screw press is used for capacities of up to200 tons of raw material per day and is best suited to specieswith high oil content.

The higher oil extraction rates of the solvent processes have tobe balanced against their larger' capital investment, theirrelative complexity, their need for flammable solvents, theunsuitability of the process for certain oilseeds and therelative market values of residual cake and meal.

Advantages of pre-press solvent extraction over other processesinclude having about one sixth of the maintenance costs anddouble the capacity of "hard press" screw presses and about halfthe solvent requirements of a direct solvent plant. Thiscombined system is generally used for species with oil contentover 25%, such as castor bean, sunflower, groundnut, rapeseed andsafflower.

Storage

When storing seed, adequate ventilation is essential, as is thecontrol of moisture and temperature. Seed deteriorates inprolonged storage and oil quality is impaired. Among otherchanges, the free fatty acid (FFA) content of the seed risesleading to higher refining losses. In addition, high moisturecontent will reduce processing efficiency, while too much heatcan damage both oil and seed. Certain species are particularlysubject to storage losses (ie. fungal infestation of groundnutwhich produces afflatoxin). These are discussed in the sectionson respective seed types.

As domestic supply will be seasonal and may be supplemented bybulk imports, raw material storage facilities are required to

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ensure adequate mill capacity utilization.

Cleaning

Unless there is reason to suspect the presence of foreign matterthat may affect storage of the seed, the usual practice is toclean seed just before processing. Rotary or table sieves,combined with fans or cyclones, remove sand, stalks, leaves, andother plant debris. Passing the seed over magnets removes metalfragments. One important effect of cleaning is reduced wear andtear on milling equipment.

Decortication

Separation of the hull or husk from the seed before the oil isremoved normally results in increased extractor capacity andhigher oil yields, (for example, sunflower crushing capacity canbe increased by 15-19% using decorticated seed) Loss of oilthrough absorption by the husks is also avoided. Decorticationinvolves breaking the seeds and then separating the husks fromthe 'meats' by air aspiration. Decortication may not bejustified for some of the smaller seeds, or may not be desirableas in the case of flaxseed where much of the oil is in the husk.If the meal is to have a low-fibre content, then hulls will beremoved from some oilseeds which are not normally decorticated(such as soybean). Alternatively, the meal can be decorticatedafter extraction through a sieving process called 'mealdefibration'.

Pre-treatment

Before oil extraction, preparation of the seed to ensure maximumoil recovery usually involves three stages:

- The seeds are broken and reduced in size in serrated rollermills.

- The broken seeds are flaked, or thinly pressed, the objectbeing to fracture the seed coat and rupture the oil cells.Thin flakes are critical to the subsequent processing whichdepends on a high surface/volume ratio.

- To extract the maximum amount of oil the dehulled seeds orflakes are 'cooked' or 'conditioned'. Heating in cookers

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coagulates the proteins in the seed, plasticizes the seedfor easier flaking, and frees the oil for efficientpressing. In cottonseed, it also binds gossypol, which istoxic to certain animals such as swine and poultry. Theprecise duration and temperature of this cooking depends onthe seed variety and its moisture content. Followingcooking, the flakes are dried before extraction. Care isneeded to avoid over- or under-cooking since these willaffect the quality of the refined oil, its colour, and thenutritive qualities of the cake or meal.

Pressing

Mechanical expelling using presses can be either continuous orbatch.

Continuous presses

Screw presses may be used for two different tasks. One is toobtain maximum oil yield from a suitably prepared seed in themechanical process. This is achieved by a single pressingthrough the screw press at high pressure. There is no further oilextraction. The other task is to pre-press seed, generally ofhigh oil content in the combined press/solvent process. Theresulting cake of more moderate oil content is then furtherextracted with solvent to recover most of the remaining oil.

To fulfill these two main tasks, there are two types of screwpresses: the high pressure press, which achieves a relativelyhigh oil recovery, and the pre-press which often is of similardesign, but lighter weight in construction.

A continuous press consists basically of a screw assembly, ashaft fitted with spirally-flighted worm sections. The shaftturns in a cylindrical steel cage into which the oil-richmaterial is forced. High pressure is developed against acone-shaped plate and the oil is expelled through narrow slotsaround the press barrel. The compressed cake is extruded throughthe discharge outlet. Many hand presses have a two-stage action,consisting of two sequential screws and cages, or a single cageand a split screw operating at two speeds. The size and capacityof the presses vary.

Single pressing with a high pressure screw press can produce cakewith a low oil content ranging from 3 to 5% depending on the typeof seeds used and the skill of operation. Single pressing is hard

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on the gears and motors, and special attention to performanceguarantees and spare parts availability is needed if this type ofmill is to be installed.Batch presses

Batch ("box" and "cage") presses have traditionally been used forthe recovery of oil from oilseeds. Until recently, these presseswere hydraulically operated, and were used either alone or inconjunction with a solvent extraction plant. Today, they have allbut disappeared. Without adequate seed preconditioning, the oilrecovery is low (about 8-10% of oil is left in the cake); and ifused for pre-pressing followed by solvent extraction, they cannotcompete with continuous screw presses because of difficulties inbreaking up the large press cakes for further processing.Unskilled labor requirements are higher than with other equipmentas are skilled maintenance requirements.

Pre-expelling

This is the process in which the oilseeds are prepared forsolvent extraction by pressing to remove a portion of the oil.About 70-80% of the oil is removed in the pre-pressing, requiringless pressure than in the comple-te single pressing whererecoveries of over 9.0% are desired. The result is much less heatdamage to the meal, and increased throughput. The product is an"expeller-cake" with 15-20% oil, which is broken or re-rolled,and extracted with commercial hexane.

Screw presses for pre-expelling are often the same design asthose used for single pressing. The pre-expeller has about doublethe capacity of the single press, and half to one third of thepower requirements.

General considerations

It is common for large screw presses to process 150 tons of seedper 24 hours when used as pre-presses, and there are severalpresses for which much larger capacities are claimed. Forsingle, high pressure pressing the capacity is reduced by about50%.

Expellers are designed to facilitate maintenance, which is acritical aspect of their operation given the heavy wear and tearon the moving parts from the heavy pressures, the friction andthe heat generated. A rough indication of the replacement rate of

* 9

wear parts is between 2 and 5 times a year when crushingdecorticated seeds, and almost twice as often for undecorticatedseeds.

It is important when selecting equipment to obtain independentadvice. When comparing equipment for a specific project, thefollowing factors must be considered.

Types of seed to be processed;Capacity of seed input;Oil recovery rate, and oil left in cake;Supply of spare parts;Maintenance facilities;Workshop facilities for repairs in factory;Guarantees of capacity, performance and maintenance cycle;References on past performance.

Solvent Extraction

Oil extraction from cake by the solvent process involvestransferring the oil from the cake into a solvent (usuallyhexane), and then separating the oil from the solvent throughdistillation.

Less than 1% of the oil remains in the meal after extraction ifthe seed has been suitably pressed and pre-treated. The qualityof the oil thus extracted is equal to that of expelled oil and itis suitable for subsequent refining operations. In fact, sinceminimum heat is used the risk of discolouration in the oil isgreatly reduced as is the risk of cooking damage to the proteinin the meal.

The object in solvent extraction is to remove as much as possibleof the oil from the cake, with a minimum of solvent. This isachieved most efficiently by continuous counter-currentextraction.

In the extractor, the solid oil-bearing material is conveyed inthe direction opposite to the solvent. The extracted meal leavesat one end, and the miscella (solvent-oil mixture) leaves at theother. Of the two methods, percolation and immersion, the formeris most widespread. Usually the conveyer, which may be a chainpulling product along a longitudinal screen, or a series ofbuckets with perforated bottoms, moves through sprayed solventwhich percolates through the cake, absorbing, and washing the oilthrough the perforations or sieves. As an alternative, the

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extractor may be of deep bed design consisting of a verticalcylinder divided into pie-shaped sections. Each of thesesections, (with a bed 2 to 2.5 meters high) is sequentiallycharged with flakes, washed in a counter-current fashion by adownward percolating miscella, drained, and unloaded. In arotary basket extractor, the loading, unloading, and miscella/solvent spray mechanisms are stationary while the basket caroselrotates. In a stationary basket extractor, the loading, sprayand unloading mechanisms rotate while the basket is still. Theimmersion system differs in that the cake moves counter-currentthrough a trough of solvent. Depending on the seed species, theprocess may vary and use a combination of the two methods.

The determining factor for the capacity of solvent plants is thesize of the extractor. The minimum capacity for viable operationshould not normally be lower than 100 tons of prepared seed per24 hours.

Solvent extraction plants need special facilites for storage ofthe solvent. Since it is flammable, the safety features of thesolvent's storage and use need careful attention. Specificguidelines for layout, construction, electrical equipment andwiring, and operation of solvent extraction plants are given inNFPA Handbook 36 published by the National Fire ProtectionAssociation (USA). Based on continuous efficient operation,losses of solvent are in the region of 2-3 kg per ton of cake orseed. In practice, losses of solvent are higher for small plantsand lower for very large plants.

Continuous solvent extraction plants require skilled operation bya small staff of one or two operators per shift. The plantconsists largely of the extractor and the desolventizing unitsthat resemble a small chemical plant. The mechanical part of theplant causes relatively few problems, but the instrumentation andelectrical control systems tend to be sophisticated and theyrequire skilled maintenance.

The solvent extraction plant proper requires a relatively smallarea. It is common to erect the plant in an open building with aroof and minimum cladding on the sides to allow free airventilation. Around the building there should be a safety zone,and a wall or fence. Motors, switches, instruments, or toolswithin this area should be appropriate to the inflammable natureof the solvent. Adequate cooling water must be available for thecondensation of all solvent vapours in case of power failure.

* ~~~~~~~~~~11

Desolventizing

Both the meal and the oil produced from the solvent process needto be desolventized. The oil is freed from the miscella in aseries of stills and stripping columns, and the solvent condensedfor re-use. The oil is cooled and filtered before leaving theplant for storage or further treatment.

The extracted meal is drained in the extractor for a short time,but after discharge, it is still wet with solvent. The wet meal("Marc", typically 30-35% solvent) is freed of solvent usingsteam-jacketed 'desolventizer-toasters', into which steam isinjected. The solvent is evaporated from the meal, and condensedfor re-use.

Filtration

After extraction, the crude oil is allowed to settle so that fineparticles of the original raw material can be removed byfiltration.

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REFINING

Introduction

The crude oil produced by a mill is the 'end product' in someoperations. However, in most new investments, a refining processmay also be considered. Its object is to produce an oil that isbland, light-coloured, and without odour or flavour.

World trade occurs extensively in both crude and refined oils.The value added potential of new refinery investments may beadversely affected by surplus capacity in established refineries,a situation which prevails at the time of this writing.

It is important to reduce to a minimum any losses of oil duringthe refining process. Each process involving the removal ofimpurities inevitably causes a loss of oil. The other majorsource of oil loss is poor storage and handling during millingwhich increases the free fatty acid composition of the crude oil.Vegetable oil loses some of its natural anti-oxidants durincrefining, and care is needed especially during storage, packinaand when processing in batches to prevent oxidation.

* Refining Systems

Crude oil contains free fatty acids (FFA) and may also becontaminated with water, resins, gums, or other decompositionproducts. The crude oil in this state is cloudy, dark-colored,strong-flavored, and deteriorates rapidly.

The refining process outlined in Flowchart 2 consists of fourbasic steps, degumming, neutralization, bleaching, and de-odourizing.

In addition to purification processes to remove the contaminants,color and odor, refining includes other optional processes suchas hydrogenation and winterization, which enhance the appeal ofthe refined oil for particular markets.

In general, refining processes can be either batch or continuous.Investment costs are lower for batch systems, but they tend to

* - have high labor and operating costs. Continuous systems, althoughmore efficient and less labour intensive, require a higher levelof skills for their operation. The minimum daily oil productionjustifying continuous production is about 15-20 tons of crude

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CrudeOil

Degumming

INeutralizing

- . - ~~~~~I

Centrifugation

Bleaching Soapstock

…-_ _ _ _ _ _ _ _ _ _-I

Hydrogenation

Winterization

Deodourizing

Refined Oil

Flowchart 2: Stages in the Refining Process(broken lines indicate optional steps)

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oil. For smaller quantities, especially if different types of rawmaterials are to be processed, batch plants are preferable.

Degumming

Crude oil contains a number of finely dispersed or dissolvedconstituents that can be hydrated or coagulated to form gums. Theneed for this procedure is dependent on the type of oil beingprocessed and desired end product, and it may be combined withthe neutralization process.

When performed, hot water is added to the oil. The phosphatidesare hydrated by the water, and the acid sludge is separated bysettling or centrifuging. The gums are vacuum dried, cooled andstored for additional processing of commercial lecithin (see page19).

Neutralizing

Degummed oil usually contains between 0.5 and 5% free fatty acidsand the purpose of neutralization is to reduce the FFA to below0.05%. The most common system, alkali neutralization, achievesthis reduction by heating the oil with an alkali solution,0 usually caustic soda, and removing the resultant soapstock.Either batch or continuous neutralization procedures can be used.The mixture of oil and caustic soda is heated, converting the FFAto water-soluble soaps, which are separated by gravity orcentrifuge. Where gravity settling is used considerableexpertise is required to minimize losses. In addition to FFAremoval, neutralization also reduces some of the colouringcompounds, and will remove any gums or phosphatides not removedby the degumming process.

There are two other refining systems currently in use. Miscellarefining consists of neutralizing the oil-solvent mixtureobtained from the extraction plant with caustic soda, andseparating the soapstockVby centrifuging. It is used primarily inthe processing of cottonseed, the oil of which must be refinedvery soon after extraction to avoid permanent setting of darkcolors. Soapstock from miscella refining is spread over the marcin the desolventizer-toaster to recover the hexane, and to

1. While more costly to install, continuous flow equipment hasgreater capacity and lower operating costs per unit ofthroughput.

* 15

increase the caloric value of the dried meal.

Steam refining relies on the distillation of the fatty acidsunder vacuum with steam. In theory it is an attractive methodsince the FFA are removed from the oil without the addition ofchemicals, thus avoiding the problems of effluent or residuedisposal associated with alkali neutralization. Specialprecautions are needed at all stages of production, storage andtransportation to safeguard edible oil quality. Steam is notappropriate for certain oils like cottonseed and soybean.

Within the same plant, different systems are often applied todifferent types of oil.

Bleaching

Market requirements demand that most oils be light-colored. Thecolour is improved (ie. lightened) by treating the neutralizedoil with bleaching earth, or a mixture of bleaching earth andactivated carbon which absorbs the colouring substances dissolvedin the oil. The bleaching earth containing the colourings isfiltered out of the oil, along with some neutral oil.

Oil losses, labour requirements and steam consumption are higherin a batch system than in a continuous system. Capital costs arehigher for continuous systems.

Hydrogenation

Hydrogenation is the method used to change liquid edible oilsinto semi-solid form which allows their use for shortenings andmargarines, increases the oil stability and reduces rancidity. Itenables vegetable oils to be substituted for traditional solidcooking and baking fats like butter or lard. The process raisesthe melting point of the oil by transforming unsaturated fattyacids into saturated forms through the addition of hydrogen.

During hydrogenation, agitated oil is heated - in the presence ofa catalyst (usually nickel) - in a vessel pressurized withhydrogen gas. The gaseous hydrogen reacts with the unsaturatedfatty acids, saturates them to form stable oils and 'hardened'fats. The process can be controlled and stopped when the desireddegree of saturation (measured as Iodine Value) is achieved.Hydrogenation can produce fats which are soft (but solid-appearing) or fats that are hard and brittle at room temperature.

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Most oils and fats produced for edible purposes are partiallyhydrogenated.A necessary adjunct to a hydrogenation plant is a supply ofhydrogen gas. This can either be purchased from outside sourcesor produced within the refinery by electrolysis.

Winterization

When oils are cooled they can become cloudy because of crystalformation. Winterization consists of cooling the oils to a lowtemperature and filtering out the large crystals (mostly waxes)which form. Another method, effective but more complicated andcostly, is solvent fractionation in which the oil is dissolved inhexane or other solvent like alcohols for better crystallization.Liquid oil losses are fractionally smaller with this method andsavings are offset by extra steam requirements and solventlosses. The solvent method is more attractive for oils whichcontain large amounts of solids when cooled.

Deodourizing

After neutralization, bleaching, and winterizing, the oil usuallystill contains impurities giving it odour and flavour. Unless a0 unique flavour is desirable (as in olive oil), these componentsare removed by steam stripping under vacuum.

For effective deodourization, the oil must be heated to a hightemperature (160 to 275 degrees centigrade). At lowertemperatures, the oil requires longer steaming periods, and ahigher ratio of steam to oil. Methods using the highertemperatures are not suitable for all oils, and are generallyused in continuous systems that hold the oil for a short time.

Consumption of steam and cooling water is high with both batchand continuous systems, although continuous systems use one thirdor less steam than batch systems. Steam consumption will vary forcontinuous systems, but as a rough guide, a medium sized plantwill need 150-250 kg of steam per ton of oil, and 70-100 timesthat of cooling water. Where cooling water is scarce, it issometimes recovered by evaporation towers. The distillate issometimes recovered as a source of Vitamin E (alpha tocopherol)and other chemicals.

Oil losses in a continuous deodourization system should be about0.2%, and in a good batch plant, perhaps 0.3%.

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Deodourized oils are often stored under blankets of nitrogen toexclude oxygen and prevent darkening and deterioration offlavors.

End Uses

After bleaching, refined oil is ready for packaging anddistribution. The most important consideration when storing orpackaging the oil is to provide protection against contaminationfrom atmospheric adulterants, internal contamination by water,soaps or heavy metals, over-heating and exposure to oxygen.Usually oils are stored in completely closed iron tanks, althoughstainless steel or food-grade epoxy coating lined tanks are usedwhen highest stability of the finished oil is required.

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MARKETING ASPECTS

Product, By-Product Uses

Although a number of different products and by-products of oilmilling and refining can be identified, the two basic productsare the crude, refined or hydrogenated oils, and the oil-cake ormeal. Oil is usually the most valuable product on a unit weightbasis. However, typically more total weight of meal is producedthan of oil. In the case of soybeans, the monetary return fromthe meal is greater than from the oil because of the relativelylow oil and high protein content of that species.

Products from milling include crude oil, cake (oil-rich) and meal(mostly protein and fibre). Crude oil is refined further. Cakeis ground into meal or goes directly to animal feed and mealbecomes a constituent of compound animal feeds. In addition,husks (or hulls), and linters in the case of cottonseed, areproduced.

The principle food uses of refined or hydrogenated oils are forcooking and salad oils, margarine and shortenings. The mainnon-food consumers of refined oils are the paint, varnish, resin,and plastics industries. In-addition, there are numerousspecialized uses in other industries.

By-products of refining include soapstock and lecithins. Thevalue of soapstock to the soap manufacturer is its fatty acidcontent which can vary with the refining process used.

Lecithins, derived from phosphatides removed at degumming, havenumerous food and nonfood uses. Their principal food uses are aswetting or emulsifying agents in products like peanut butter,chocolate, baked goods, shortenings and instant-type products.The main non-food applications include stabilizers, antioxidantsand emulsifiers, and dispersants in textiles, rubber, paint andlubricants.

Market Substitution

As discussed in the Oil Crops Overview Profile, the issue ofsubstitution between oils, fats and meals is critical.

19

Other Factors

Toxins limit the use of certain oilseeds. Cottonseed mealcontains gossypol, and cottonseed and groundnuts are susceptibleto the development of aflatoxin, both of which are toxic toanimals. If the meal or cake is to be used for animal feed, theprocessing operation must reduce these toxins to acceptablelevels. Castor beans contain substances toxic to man and animalsboth in the oil, and in the meal. For these reasons the oil isused for industrial purposes only; the meal, historically, hasbeen used as a fertilizer, although research projects are inprogress to detoxify it for use as animal feed.

20

OTHER FACTORS

Site Requirements

The site chosen for the proposed plant must balance between thenumerous factors which characterize the processing operation, theraw materials situation, and the market structure.

The orientation of the plant, in terms of exports or rawmaterials supply, influences the transport and handlingrequirements.

Oilseed processing utilizes large quantities of steam, water (forcooling), and electrical power.

Availability of road, rail, or water communication links isvital, both for rapid distribution, and for raw materialprocurement. For rapid access to regional and world marketinformation, phone, or other telecommunication facilites areneeded.

Space Requirements

Local needs for space vary with the scale of the plant. Adequatespace is needed for:

- Storage of raw materials (may be substantial, depending onthe growing period and rainfall patterns).

- Pre-treatment and pressing.- Extraction (special safety requirements for solvent).- Meal treatment (bagging, pelletizing).- Storage of end products.- Refining plant.

- hydrogenation plant (optional).- soap-splitting plant (optional)- bottling facilities

- Administrative offices.- workshops- storage for spare parts (very important)- quality control laboratory- solvent tank farm (if applicable)- storage of containers and miscellaneous supplies.

A typical layout for an oilseeds processing plant is shown on thefollowing page.

21

____________________ __ Q = Main road Q

Lorry park Future e.pans.on

Crude Pelletedolg Meal storage meal Seed storagestorae storage

Refiner Refined Pre-treatment

= _ | ta nk 5 | ;;;;tank

BottI,ng and

Refined' plant r u g

product f n 01r

Cooling tower

teen~~~~~~~~~~~~| scaand Offices and

| centr l -t-rl | ~~~~General stores Workshop| |fomrStaff entrance L I_eea t,s-1,1.

Road for passenger cars

Metres o t0 20 30 40 50

(Adapted from UNIDO, 1977)

22

Environment

Oilseed milling, on the whole, is a clean industry. Dust may beraised in storage elevator operations and cottonseed delintingand linter baling rooms, but this can be contained with propershrouds and dust control systems. Since almost 100% of the rawmaterial is utilized as husks, oil, or meal, there is very littlesolid waste for disposal. Husks, when burned for fuel, producesmoke which may affect air quality. Handling of dry meal cangenerate significant amounts of dust. Hexane, used in solventextraction, is highly inflammable and needs special precautionsespecially in tropical areas. These problems relate more to thesafety of the worker in the mill than to the plant's environment.

Large quantities of water are used for cooling, but most can berecycled and what little is discharged is relatively 'clean'.

Refining processes use more chemicals and the hazards areproportionally greater. In particular, water may becomecontaminated by contact with the chemicals. Most of theby-products are further processed and utilized, posing fewproblems.

* 23

COTTONSEED

Depending on location and growing conditions, yields ofcottonseed range from 300 to 2000 kg/ha.

Availability of cottonseed for processing is tied to the cottonfibre industry. Markets for cotton fibre determine growingpatterns, and the industry's ginning capacity and proceduresinfluence the quantity and quality of cottonseed reaching themill. Returns to the producer from cotton fibre are approximately6 to 10 times greater than from cottonseed.

Although a by-product of the cotton fibre industry, the value andimportance of efficient cottonseed processing may be critical tothe cotton industry as a whole.

Cottonseed kernels contain gossypol which is toxic to monogastricanimals (poultry, swine, man). Whole cottonseed can be fed, inamounts not exceeding 10% of the ration, to ruminants such ascattle, sheep and goats. Good milling techniques during 'cooking'and pre-treatment, in conjunction with varieties with reducedgossypol levels, can result in meals useable in limited amountsin feeds for monogastric animals and in food-grade flours forhumans.

Products

The main products of cottonseed are oil, mostly for edible use,and meal for animal feed. Undecorticated seed usually contains15-25% oil. A typical protein content of the meal is 38%, but acommon practice is to separate part of the hulls duringdecortication with the result that the cottonseed meal usuallycontains about 41% protein.

FFA content and quality of the oil depend largely on the weatherprevailing when the cotton matured. Quality tends to be higherafter dry seasons and lowest when the seed is exposed to wetweather in the field or handled and stored with a high moisturecontent. Under ideal conditions, FFA content in crude oil variesfrom 0.5-1.0%, and in oil from wet or damaged seeds it may be 5%or higher (1.5-3.0% content is common). The refined oil containsapproximately 75% unsaturated fatty acids.

24

Processing

Prior to decortication it is necessary to delint, or remove thecoating of short fibres or linters from the seed. The linters area valuable by-product. Oils to be used for salad dressings, orfor other liquid purposes in cool environments, are typicallywinterized.

GROUNDNUT

Depending on location and growing conditions, yields of groundnutrange from 300 to 2250 kg/ha.

Various growing conditions can result in the development ofaflatoxin by the fungus Aspergillus flavus. Aflatoxin is highlytoxic to man and animals, and is resistant to heat treatment.Hexane extraction removes very little aflatoxin from the meal andthat which is extracted is readily removed from the oil duringalkali refining.

Products

In the United States the main processed uses are as peanut butterand cooking oil. Outside the USA, approximately 60% ofgroundnuts, mainly lower grades, are crushed for oil. Shellednuts contain around 45% oil and 55% meal. The protein content ofthe meal is approximately 45-55%, and it is used for animal feed.

The refined oil usually contains approximately 80% unsaturatedfatty acids. Groundnut oil solidifies rapidly in an amorphousform when refrigerated and does not require winterization.

MAIZE

Corn oil is derived from the germ of the maize kernel and is aby-product of wet or dry milling of corn. (See maize profile fordescription of these processes.) Production of corn oil isdirectly related to the market demand for corn sweeteners, cornstarch, corn starch products, and degerminated dry-milled cornproducts and therefore the avaliability of corn germ forcrushing. Only a small fraction of the total corn crop isprocessed for oil production. The oil content of the germ is

25

usually about 50%.

Products

Corn oil is used primarily in unhydrogenated forms, the highlinoleic acid content of the oil makes it attractive for dietaryuses. The majority of corn meal is used for animal feed.

FFA content of the crude oil is usually 1.5% and above. The oilcontains approximately 90% unsaturated fatty acids, and for usein cool environments winterization is necessary.

RAPESEED

Depending on location and growing conditions, yields of rapeseedrange from 370 to 2800 kg/ha.

Two main problems are associated with rapeseed. The plantcontains high levels of glucosinolates and erucic acid. Theformer limits use of the meal for animal feed, and erucic acidhas caused atherosclerotic problems in laboratory animals and isconsidered to be a human health hazard. Recent developments,especially in Canada, have produced 'double-zero' varieties withlow levels of erucic acid and glucosinolates.

Products

Rape oil has been used for human consumption for many centuries.Currently, except when fully hydrogenated, the erucic acidcontent (20-45%) has relegated traditional varieties toindustrial uses in developed countries. The new 'double-zero'varieties (Canola) are now used to produce edible oils. Dependingon the variety, the oil content of rapeseed varies between 40 and46%, the balance being meal.

Low glucosinolate varieties have similarly re-opened the marketsfor rape meal in animal feeds. The meal contains 30-40% protein.

In addition to erucic acid content, the linolenic acid is also aproblem in rape oil, as it creates problems with keepingqualities and flavour reversion. The newer oils with zero erucicacid show a small increase in saturated fatty acids, and agreater increase in unsaturated oleic and linoleic fatty acids.

26

SAFFLOWER

Safflower oil is unusual in having a very high percentage ofunsaturated fatty acids, but virtually no linolenic acid. Thecrude oil is golden yellow in colour, but this is removed duringnormal refining and bleaching.

Products

The linoleic acid content has made safflower oil popular on theedible oil market owing to demands for oils containing highproportions of polyunsaturated acids. For use in compoundedproducts such as margarine or shortenings, safflower oil is equalor superior to other vegetable oils.

Industrially, safflower oil is used in the manufacture ofalkylide resins and protective coatings.

SESAME SEED

Yields of sesame seed range from 250 to 1250 kg/ha, depending onlocation and growing conditions.

The main fatty acids of sesame oil are oleic and linoleic acids.However, it is not the fatty acids which impart specialcharacteristics to sesame oil. The presence of sesamin,sesamolin, and sesamol in the oil help make the oil highlyresistant to oxidation.

Products

The relatively high price and uncertainty of supply restricts useof sesame oil to food rather than non-food uses. Its main edibleuse is as a substitute for olive oil, as an extender for oliveoil, or in high quality salad and cooking oils. Sesame oil can beused in margarine and shortenings, but for these products it isnot competitive with other, cheaper vegetable oils.

* 27

SOYBEAN

Depending on location and growing conditions, yields of soybeanrange from 300 to 2700 kg/ha.

Soybean differ from most oilseeds in that it is processedprimarily for meal. Approximately four pounds of meal areproduced for each pound of oil, and soybean meal dominates worldtrade in meal. This has the important consequence that the priceof soybean oil can be more readily adjusted to maintain itscompetative position without jeopardizing the processingenterprise as a whole.

Products

There are numerous food and industrial uses for the oil, and itsproducts. The meal, containing 42-48% protein, constitutes almost80% of the bean. Other products include 'soybean flour', andlecithins from the phosphatides removed during refining. The oilcontent of soybeans is relatively low (13-20%), and solventextraction is the favoured extraction process.

Extra care is needed for the harvesting and handling of soybeans,as immature or damaged beans will cause discolouration of theoil.

Soybean oil contains approximately 90% unsaturated fatty acids.It has a tendency to develop an off-flavour during storage orwhen heated to a high temperature due mainly to the presence oflinolenic acid in the oil. This can be overcome by partialhydrogenation to reduce the linolenic acid content to about 10%.

SUNFLOWERSEED

Average yields for sunflower range from 500 to 1500 kg/ha,depending on variety and growing conditions. In general the'oilseed' varieties (black, thin-hulled) have higher yields thanthe 'non-oil' varieties (striped). Yields in temperate regionstend to be about 5% higher than in tropical and sub-tropicalareas.

28

Products

Sunflower oils are used almost exclusively for edible purposes asa cooking and salad oil, and in the manufacture of margarines andshortenings. The oil content of the seed varies betweenvarieties; the 'oilseed' varieties contain about 45% oil, and the'non-oil' varieties around 30% Much of the 'non-oil' productionis consumed whole, or in the confectionery industry.

The meal produced is high in protein (around 40%), but poorcolour and high fibre content can be disadvantages.

FFA content in sunflower oils is usually 0.5% and above andunsaturated fatty acid content is approximately 86-91%. Thelinoleic acid content may vary substantially with climatic andgrowing factors and the higher levels are preferred for fooduses. Low levels of linolenic acid give sunflower oil goodkeeping qualities.

Oil produced from seed grown in cooler climates does not needwinterization. If the seed is not decorticated prior to crushing,the oil must be dewaxed during refining.

* Processing

The main problem with the 'oilseed' varieties is their smallhusks which make decortication difficult.

* 29

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BIBLIOGRAPHY

1. Appelqvist, L A. & Ohlson, R. (1972) Rapeseed:Cultivation, Composition, Processing, and Utilization.Amsterdam : Elsevier.

2. Asian Development Bank. (1979) Appraisal of CottonProcessing Prolect in the Democratic Republic ofAfghanistan. Report No. AFG: Ap-9.Manila : Asian Development Bank.

3. Atkins, W S. & Partners. (1964) The Development ofOilseeds Industries in Ethiopia.Epsom, England : W. S. Atkins & Partners.

4. Braae, B. (1972) The Vegetable Oil Refining Process andits Industrial Economy. UNIDO Expert Group Meeting onPre-investment Considerations and Technical and EconomicProduction Criteria in the Oilseed Processing Industry.Vienna, Austria, 16-20 October. Report No. ID/WG.120/2

5. Campbell, E J. (1984) A Primer on the Processing ofSunflower.The Sunflower, 10(1) : 28-32.

6. Commonwealth Secretariat, Industrial Development Unit(1981) Expansion of Vegetable Oil Processing Facilities inthe CARICOM Region.London : Commonwealth Secretariat.

7. Cornelius, J A. et al. (1976) The Millina of Cottonseedand the Refining of Cottonseed Oil in Afghanistan : AStrategy for the Development of the Processing Industry.London : Tropical Products Institute. Report No. P542.

8. Crawford, James. (1984) Crushing Margin : The SunflowerProcessor's Economic Life.The Sunflower, 10(1) : 16-17.

9. DeRafols, W. et al. (1969) Development of the EthiopianOilseeds Industry.Menlo Park, CA : Stanford Research Institute.

* 10. Erickson, David R. et al. (1980) Handbook of Soy OilProcessing and Utilization.St. Louis, MO : American Soybean Association.

30

11. Experience Incorporated (1976) A Feasibility RePort onCottonseed Production, Marketing, Storage, and Processingand Processing and Marketing of Cottonseed Products :Phase III Report Technical, Financial, and EconomicAnalysis.Minneapolis, MN : Experience Incorporated.

12. Experience Incorporated (1976) Pakistan CottonseedIndustry Study : Phase IV : Recommendations andImplementation Requirements for Modernizing the PakistanCottonseed Industry.Minneapolis, MN : Experience Incorporated.

13. FAO Investment Centre. (1977) Report of the TanzaniaOilseed Projects Identification.Rome : FAO/Bankers Programme. Report No. 31/77-DDC TAN.

14. Gandy, Dalton. et al (1970) Proceedings of the FourthInternational Sunflower Conference.Memphis, Tennessee, 23-25 June.Memphis, TN : National Cottonseed Products Association.

15. Genser, M V. & Eskin, N A M. (1979) Canola Oil:Properties. Processes and Food Ouality.Winnipeg : Rapeseed Association of Canada.

16. Helgeson, Delmer L. (1977) The Economic Feasibility ofEstablishing Sunflower Processing Plants in North Dakota.North Dakota Agric. Expt. Station, Bulletin, (503).

17. Lamm, R McFall. (1979) Economies of Scale in CottonseedProcessing.Agricultural Economics Research, 31(1) 26-33.

18. Lusas, E W. (1983) Comparative processing practices of theworld's major oilseed crops.Economic Botany, 37(4) : 444-458.

19. Mixon, Bobby Joe & Morrison, W R. (1979) Economies of Sizein Soybean Processing Plants, 1978.Arkansas Agric. Expt. Station, Bulletin, (840).

20. Pakistan, Ministry of Food & Agrarian Management. (1977)Report on Oil Seeds Production Strategy for Pakistan.Islamabad : Government of Pakistan.

31

21. Pryde, E H. (1983) Utilization of commercial oilseedcrops.Economic Botany, 37(4) : 459-477.

22. Ramachar, D. et al. (1972) Experimental SunflowerProcessing in India.Oil Mill Gazetteer, 77(5) : 22-26.

23. Reid, LLoyd M. (1980) The Potential for the Production,Processing and Utilization of Soybeans and SoybeanProducts in Turkey.Industrial Development Bank of Turkey.

24. Report of a Mission to Appraise and Advise on AcceleratedOilseed Production and Utilization in Kenya. (1977).

25. Salmon, R E. & Biely, J. (1978) Canadian Rapeseed Meal:Poultry and Animal Feedinq.Winnipeg : Rapeseed Association of Canada.

26. Serrato, Alfredo G. (1975) Operating a Multi-Purpose OilMill.Oil Mill Gazetteer, 80(5) : 19-22.

0 27. UNIDO (1977) Draft World-wide Study on the Vegetable Oilsand Fats Industry : 1975-2000.New York : UN. Report No. UNIDO/ICIS.46

28. UNIDO (1977) Guidelines for the Establishment andOperation of Vegetable Oil Factories.New York : UN. Report No. ID/196.

29. Wamble, A C. (1969) Pilot Plant Processing of SunflowerSeed With Conventional Cottonseed Processing Equipment.Oil Mill Gazetteer, 73(7) : 10-14.

30. Weiss, E A. (1983) Oilseed Crops.London : Longman.

31. Woodroof, J G. (1983) Peanuts, 3rd ed.Westport, CT : Avi.

32. World Bank, Commodity Studies & Projections Division.(1984) Groundnut Handbook.Washington, DC : World Bank.

* 32

33. World Bank (1978) Staff Appraisal Report of the OilseedProcessing Project, Syrian Arab Republic.Washington, DC World Bank. Report No. 2139-SYR.

33

0

ANNEX I:

EXAMPLES OF INVESTMENT AND OPERATING COSTS

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OIL SEEDSEXAMPLE 1

Page 1 of 6

Indicative Investment and Operating Costs-----------------------------------------

EDIBLE OILS AND BY-PRODUCTS

Establishment of a factory to produce refined edible oil fromrice bran, and to produce rice bran meal, wax, and soapstockfrom milling by-products. This is a follow-up investment to aproject where a crude-oil factory was built. The two facilitiesare operated by the same company and are located on the same site.

COUNTRY: Thailand (Kaset Suwan Vegetable Oil Industry Co.)

NOTE: The data shown in this analysis pertain uniquely to thetime circumstances, and country of the identified invest-ment, and are intended as an indicative example only.Their applicability to other situations may varyconsiderably.

| * Annual Production at Full Development (in tons):

refined edible oil 4610.00rice bran meal 17520.00wax 360.00soapstock 1650.00

Capacity Utilization at Full Development: 100.00%

US $ '000Total Cost

mid-1981 pricesInvestment Costs: Crude Oil Factory-----------------------------------

Buildings and Civil Worksfactory building 520 m2 56.40storage/treatment building 3,640 m2 312.36weigh-bridge & foundation 48 m2 12.54water works (well, pipes, tank) 37.31boiler house 100 m2 13.02work shop 256 m2 17.35roads, fencing, yard area 124.25other 38.61

Sub-Total Buildings & Civil Works 611.84

OIL SEEDSEXAMPLE 2

Page 2 of 6

Indicative Investment and Operating Costs


US $ '000Total Cost

mid-1981 prices

Investment Costs (cont'd)_________________________

Machinery & Equipmentimported

conveyor 21.34pump 4.45evaporator 6.05boiler 44.47roll machine 90.89condenser 21.34motors 19.57other 33.62

sub-total imported 241.73Machinery & Equipment

local procurementhoppers 11.74extractor 181.43filter 2.13tanks 20.46solvent equipment 19.57elevator 7.11raw bran dryer 22.68skim bran dryer 18.14storage tanks 35.57transformer 15.18electrical cables/equipment 41.98vapor equipment 7.90other 18.68

sub-total local procurement 402.57

OIL SEEDSEXAMPLE 1

Page 3 of 6



US $ '000Total Cost

mid-1981 prices

transport & installation 44.95Sub-Total Machinery & Equipment 689.25

Total Investment Costs: Crude Oil Factory 1301.09

@ I. Investment Costs: Oil Refinery---------------------------------

Land and Land Improvement 23.43Buildings & Civil Works

refinery building 4,000 m2 112.80packaging building 3,000 m2 171.80waste water treatment plant 47.72

Sub-Total Buildings & Civil Works 332.32Machinery & Equipment

importedrefrigeration equipment 20.82filter press 39.05vacuum pumps 49.46centrifuse separator 249.20filter press 45.47laboratory equipment 13.41boiler 121.48other 338.61

sub-total imported 877.48

OIL SEEDSEXAMPLE 1

Page 4 of 6



US $ '000Total Cost

mid-1981 pricesInvestment Costs (cont'd)_________________________

Machinery & Equipment (cont'd)local procurement

oil cooker 43.38steel silo 86.77degasified tank 3.04distillation plant 86.77storage tanks 45.99fuel oil tank 2.60washing tanks 26.03packaging/bottle capping machine 9.98piping and pumps 130.15motor 43.38electrical wiring and transformer 30.37other 21.69

sub-total local procurement 530.15transport & installation 34.71

Sub-Total Machinery & Equipment 1442.34Start-Up Costs 91.28

Total Investment Costs 1889.37

OIL SEEDSEXAMPLE 1

Page 5 of 6



US $ 1000Total Cost

mid-1981 prices

II. Annual Operating Costs at Full Development:(excluding raw materials)

-----------------------------------------------

Oil Refinery:Variable Costs

raw materials (crude oil) 4251.63chemicals 422.04utilities and fuel 493.28production labor 115.62packaging 659.61

Sub-Total Variable Costs 5942.18

Fixed Costsmanagement & overheads 43.73repairs & maintenance

civil works 8.33machinery & equipment 44.86

insurance 9.20depreciation

civil works 51.97machinery & equipment 224.30

other 61.95Sub-Total Fixed Costs 444.34

Total Operating Costs 6386.52

OIL SEEDSEXAMPLE 1

Page 6 of 6


NOTE: The data shown in this analysis pertain uniquely to thetime circumstances, and country of the identifiedinvestment, and are intended as an indicative example.Their applicability to other situations may varyconsiderably.

NOTES:Exchange rate - Thai Baht 23.05 = US$ 1.00This exchange rate has been used for both 1981 and 1982Baht to Dollar conversions. According to the IMF'sInternational Financial Statistics, May, 1985, edition thisrate was in effect for this time period.Detailed breakdowns on foreign/local costs not available.file.Operating costs are for oil refinery only. Crude oilpurchase represents equivalent market price for crude oilsupplied to the crude oil factory operating in conjunctionwith the oil refinery.Full development production is reached in the second yearof the project.Data are net of contingencies.

OIL SEEDSEXAMPLE 2

Page 1 of 4


EDIBLE OIL AND SEED CAKE - SOLVENT EXTRACTION---------------------------------------------

Establishment of a factory to process crude vegetable oil fromrice bran, cotton seed, and kapok seed. In addition, millingby-products will be used to produce vegetable meal.

COUNTRY: Thailand (Golden Farm Industry Co.)

NOTE: The data shown in this analysis pertain uniquely to thetime, circumstances, and country of the identifiedinvestment. Their applicability to other situations mayvary considerably.

Annual Production at Full Development (in tons):

crude vegetable oil 2640.00vegetable meal 11664.00

Capacity Utilization at Full Development: not available

US $ '000mid-1980 prices

Total CostI. Investment Costs___________________

Land and Land Improvement 144.39Buildings

factory 520 m2 64.84main building (storage, work 301.85area, treatment areas) 3640 m2weigh bridge 5.37wells and water pipes 15.12roads and fences 31.71other 10.73

Sub-Total Buildings 429.62

OIL SEEDSEXAMPLE 2

Page 2 of 4




Total CostInvestment Costs (cont'd)

Machinery & Equipment - Importedconveyor 24.00evaporater 6.80boiler 50.00motors 22.00roll machine 102.20condenser 24.00rotating machine 11.00other 34.80

Sub-Total Imported Machinery 274.80Machinery & Equipment - Local Procurement

hoppers/extractors 217.20filters/tanks 28.60solvent equipment 22.00vapor/brine equipment 8.80elevator 8.00bran dryers 52.90oil storage tanks 29.27other 19.08transformer/electrical equipment 64.18

Sub-Total Machinery - Local Procurement 450.03Machinery & Equipment 724.83Import Duties 40.78Start-Up Expenses 112.20

Total Investment Costs 1451.81

OIL SEEDSEXAMPLE 2

Page 3 of 4




Total Cost

II. Annual Full Development Operating Costs(excluding raw materials)

Variable Costschemicals 159.56production labor 40.39electricity 80.49fuel 191.61packaging 6.59other 31.41


Fixed Costsmanagement & overhead 37.56maintenance

civil works 7.56equipment 26.88

insurance 6.05depreciation

civil works 31.46machinery 89.51

Sub-Total Fixed Costs 199.02


0

OIL SEEDSEXAMPLE 2

Page 4 of 4


NOTE: The data shown in this analysis pertain uniquely tothe time, circumstances, and country of the identifiedinvestment. Their applicability to other situationsmay vary considerably.

Notes:Exchange rate - Baht 20.5 = US$ 1.00Detailed breakdowns between foreign and local costsnot available from the project file.Depreciation calculated as 5% of civil works and 10% ofequipment and machinery.Full development production is reached in third year ofthe project.Data are net of contingencies.

OIL SEEDSEXAMPLE 3

Page 1 of 2


EDIBLE OIL AND SEED CAKE PRODUCTION-----------------------------------

Establishment of a factory to produce edible oil and seed cakefrom cotton seed, simsim seed, and groundnuts.

COUNTRY: Uganda

NOTE: The data shown in this analysis pertain uniquelyto the time, circumstances, and country of theidentified investment. Their applicability to othersituations may vary considerably.

Annual Production at Full Development:

500 tons

* Capacity Utilization at Full Development: not available

-------- US$ 000-------end-1983 prices

Local Foreign TotalI. Investment Costs

Civil Works (land, 320 m2 factory, 25.00 25.00storage godowns, etc.)

Machinery & Equipment (imported)decorticator with motor/separator 13.23 13.23oil expellers 43.13 43.13filter presses 9.20 9.20elevators with motors 6.90 6.90conveyors with motors 3.45 3.45boiler 14.95 14.95other 10.48 10.48spare parts (2 yr supply)/installation/commissioning 15.10 15.10

freight & insurance 26.45 26.45Sub-Total Machinery & Equipment 142.89 142.89

Total Investment Costs 25.00 142.89 167.89

.~~~~~~~~~~~~-----------

----------------------- ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

OIL SEEDSEXAMPLE 3

Page 2 of 2


NOTE: The data shown in this analysis pertain uniquelyto the time, circumstances, and country of theidentified investment. Their applicability to othersituations may vary considerably.

…--- US$ 000----end-1983 prices

Local Foreign Total

II. Annual Operating Costsat Full Development(excluding raw materials)

_____________________________

Variable Costsraw materials 204.00 204.00utilities 10.80 10.80production personnel 5.40 5.40other 1.00 1.00

Sub-Total Variable Costs 221.20 221.20

Fixed Costsadministration & overheads 3.60 3.60depreciation 2.50 15.80 18.30

Sub-Total Fixed Costs 6.10 15.80 21.90

Total Operating Costs 227.30 15.80 243.10

Notes:Exchange rate - Ugandan Shillings 300 = US $ 1.00Full development is expected to be achieved in the second yearof the project.Data are net of contigencies.

OIL SEEDSEXAMPLE 4

Page 1 of 2


VEGETABLE OIL PROCESSING

* Establishment of a factory to process vegetable oil.

COUNTRY: Kenya (Gada Oil Mills Ltd.)

NOTE: The data shown in this analysis pertain uniquely to thetime, circumstances, and country of the identifiedinvestment. Their applicability to other situationsmay vary considerably.

Annual Production at Full Development:--------------------------------------

2625 tons

O Capacity Utilization at Full Development: 87.50%

-------- US$ '000 00 …----

mid-1979 pricesLocal Foreign Total

I. Investment Costs:

Land 20.19 20.19Buildings 149.39 99.60 248.99Machinery & Equipment 146.30 460.97 607.27Installation Costs 20.19 13.46 33.65Pre-Operating Expenses 33.65 26.92 60.57


-~~~~~~~~~~~------------

- ------------------------ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

OIL SEEDSEXAMPLE 4

Page 2 of 2


NOTE: The data shown in this analysis pertain uniquely to thetime, circumstances, and country of the identifiedinvestment. Their applicability to other situationsmay vary considerably.


Total Cost

II. Full Development Annual Operating Costs:(excluding raw materials)

--------------------------------------------

Variable + Fixed Costsraw materials 2648.05wages/salaries 16.15depreciation 90.44other 187.08


NOTES:

Exchange Rate:Kenya Shillings 7.43 = US$ 1.00

Detailed breakdowns between foreign/local operatingcosts are not available.

File does not contain detailed breakdown between variableand fixed operating costs.

Data are net of contingencies.

Full development is achieved in year 3 after projectstart-up.

OIL SEEDSEXAMPLE 5

Page 1 of 3

Representative Investment and Operating Costs

COTTON SEED OIL EXTRACTION

Construction of a cotton oil seed extraction plant.

COUNTRY: India

NOTE: These data are representative only and are unique to thetime, country, and circumstance of the identified invest-ment. Their applicability to other situations may varyconsiderably.

ANNUAL PRODUCTION AT FULL DEVELOPMENT:3,050 tons of cottonseed oil8,200 tons of cottonseed cake1,160 tons of linter240 tons of soapstock4,750 tons of cotton seed hulls

Per Cent of Full Capacity Utilization: not available

…------- US$ '000 --Local Foreign Total

May, 1984 PricesI. Investment Costs____________________

Land Acquisition 104.54 104.54Land Development 534.41 43.00 577.41Buildings and Civil Works

raw materials godown 266.44 48.00 314.44climate controlled seed storage 1538.67 278.00 1816.67oil mill, oil cake godown,

and prep center 106.09 19.00 125.09finishing station 52.94 9.00 61.94cake, hull, lint godown 183.11 33.00 216.11packing/storage area 40.96 7.00 47.96solvent extraction plant 24.80 4.00 28.80

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--------US$ '000-Local Foreign Total

May, 1984 PricesInvestment Costs (cont'd)_________________________

Buildings and Civil Works (cont'd)effluent water treatment center 25.28 5.00 30.28refinery 41.52 7.00 48.52overhead tank/bore wells 40.22 7.00 47.22boiler house 25.19 5.00 30.19operator/weighbridge room 51.56 9.00 60.56stores/workshop 3.81 1.00 4.81electrical substation 11.06 2.00 13.06miscellaneous 41.70 7.00 48.70

Sub-Total Buildings/C.W. 2453.35 441.00 2894.35Architectural and Design Fees 124.17 124.17Plant & Equipment

delinting, dehulling,preprocessing 327.44 122.00 449.44

oil mill expeller 148.24 55.00 203.24solvent extraction plant 231.48 85.00 316.48refinery 246.13 91.00 337.13boilers 165.31 62.00 227.31electrical equipment 33.85 13.00 46.85airconditioning equipment 1086.26 403.00 1489.26bulk storage tank 31.31 11.00 42.31workshop equipment 25.07 9.00 34.07spares 94.17 35.00 129.17laboratory equipment 14.65 6.00 20.651700 kva diesel generator 207.70 536.00 743.702600 kva transformer 111.13 41.00 152.13electrical hook-up costs 56.31 21.00 77.31fire fighting equipment 35.80 13.00 48.80

Sub-Total Plant & Equipment 2814.87 1503.00 4317.87Pre-Operating Expenses 612.87 612.87


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US $ '000Total Cost

May, 1984 Prices

II. Annual Full Development Operating Costs

Fixed Costsrepairs & maintenance 255.91insurance 30.57management staff 63.83administrative expenses 19.16. Sub-Total Fixed Costs 369.48

Variable Costslabor 119.53processing materials 232.59utilities & power 504.93



DATA SOURCE: Adapted from Project File, Appendices B.9-B.13,World Bank appraisal report No. 5035-IN, NationalCooperative Development III Project, India,May 30, 1984.

NOTES:1. Exchange rate - Indian Rupees 10.8 = US $ 1.00.2. Data are net of contingencies.3. Full development is year 5 after project start-up.4. Foreign/local operating cost breakdown is not available.

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SOYBEAN SEED PROCESSING_______________________

Construction of a soybean seed processing and oil extractionfacility with a five ton per hour processing capability.

COUNTRY: India

NOTE: These data are representative only and are unique to thetime, country, and circumstance of the identified invest-ment. Their applicability to other situations may varyconside.rably.

ANNUAL PRODUCTION AT FULL DEVELOPMENT:

12,000 tons of soybeans

O Per Cent of Full Capacity Utilization: not available

…--- --- US$ 1000 .-----Local Foreign Total

May, 1984 PricesI. Investment Costs____________________

Land Acquisition 19.91 19.91Land Development 95.04 7.00 102.04Buildings and Civil Works

receiving shed 39.28 6.00 45.28processing shed 87.85 14.00 101.85receiving platform 5.07 4.00 9.07workshop/storage 19.59 3.00 22.59administration/laboratory 70.48 11.00 81.48

Sub-Total Buildingsand Civil Works 222.28 38.00 251.20

Utility Upgrade 139.11 42.00 181.11Architectural & Design Fees 65.28 65.28

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---- US$ 000 …Local Foreign Total

May, 1984 PricesInvestment Costs (cont'd)

Machinery & Equipmentinsulation and

ait conditioning 629.63 210.00 839.63vertical belt elevators 27.67 9.00 36.67weigh baggers 9.59 3.00 12.59metallic bins 7.09 3.00 10.09bag closer/conveyor belt 9.59 3.00 12.59portable bag closer 1.50 1.00 2.50seed dryer 37.56 13.00 50.56air compressor 1.50 1.00 2.50dust control system 28.87 9.00 37.87bag carts 1.04 1.00 2.04weighing balances 4.30 2.00 6.30pre cleaner (10 tph) 17.24 41.00 58.24seed cleaner (4 tph) 42.65 103.00 145.65gravity separators 18.06 45.00 63.06slurry seed treator 8.06 20.00 28.06belt type portable

bag conveyors 9.59 3.00 12.59auger tube conveyors 5.59 2.00 7.59forklift 11.31 26.00 37.31workshop tools 4.09 1.00 5.09fire fighting equipment 4.93 1.00 5.93seed testing equipment 28.13 9.00 37.13spares 129.74 41.00 170.74

Sub-Total Plant & Equipment 1037.72 547.00 1584.72Pre-Operating Expenses 239.54 239.54


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US $ '000Total Costs

May, 1984 Prices

II. Annual Full Development Operating Costs--------------------------------------------

Fixed Costsrepairs & maintenance 140.43fixed utility requirement 126.67management staff 115.37administrative expenses 37.79. Sub-Total Fixed Costs 420.26

Variable Costslabor 23.08processing materials 49.08utilities & power 94.63



DATA SOURCE: Adapted from Project File, Appendices B.9-B.13,World Bank appraisal report No. 5035-IN, NationalCooperative Development III Project, India,May 30, 1984.

NOTES:1. Exchange rate - Indian.Rupees 10.8 = US $ 1.00.2. Data are net of contingencies.3. Full development is year 4 after project start-up.4. Foreign/local operating cost breakdown is not available.

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ANNEX II:

CONVERSION TABLES

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WEIGHTS AND MEASURES

avoirdupois

Ton: short ton 20 short hundredweight, 2000 pounds;0.907 metric tons;

long ton 20 long hundredweight, 2240 pounds;1.016 metric tons.

e Hundredweight cwt;short hundredweight 100 pounds, 0.05 short tons; 45.359

kilograms;long hundred weight 112 pounds, 0.05 long tons; 50.802

kilograms.

Pound lb or lb av; also #;16 ounces, 7000 grains; 0.453 kilograms.

Ounce oz or oz av;16 drams, 437.5 grains; 28.349 grams.

Dram dr or dr av;27.343 grains, 0.0625 ounces; 1.771 grams.

Grain gr;0.036 drams, 0.002285 ounces; 0.0648 grams.

Troy

Pound lb t;12 ounces, 240 pennyweight, 5760 grains; 0.373kilograms.

Ounce oz t;20 pennyweight, 480 grains; 31.103 grams.

Pennyweight dwt also pwt;24 grains, 0.05 ounces; 1.555 grams.

Grain gr;4h 0.042 pennyweight, 0.002083 ounces; 0.0648 grams.

METRIC SYSTEM

Square kilometer sq km or kmi2;1,000,000 square meters;0.3861 square mile.

Hectare ha;10,000 square meters;2.47 acres.

Hectoliter hl;100 liters; 3.53 cubic feet; 2.84 bushels;

Liter 1;1 liter; 61.02 cubic inches; 0.908 quart(dry); 1.057 quarts (liquid).

Deciliter dl;0.10 liters; 6.1 cubic inchs; 0.18 pint(dry); 0.21 pint (liquid).

Centiliter cl;0.01 liters; 0.6 cubic inch; 0.338fluidounce.

Metric ton MT or t;1,000,000 grams; 1.1 US tons.

Quintal q;100,000 grams; 220.46 US pounds.

Kilogram kg;1,000 grams; 2.2046 US pounds.

Gram g or gm;1 gram; 0.035 ounce.

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World Bank Document · industry from raw materials and milling to refining and marketing aspects....

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