Oil Palm Industry Economic Journal Vol. 7 (2) September 2007 p. 28-33

Feasibility Study on the Potential Production of Oil Palm Shell Bio-phenol

Wong Chuan Chin, and Farid Nasir Ani
Received:    Accepted:    Available Online:


The extraction of bio-phenol from oil palm shell is being investigated in Universiti Teknologi Malaysia. In this article, the economic feasibility of producing oil palm shell bio-phenol is studied. Plants of three capacities – 100 t/day, 10 t/day and 1 t/day – are discussed. Their potential profitabilities are assessed, for which an estimation of the initial total investment and the cost of production were derived. The project evaluation and profitability analysis was performed including total capital investment, manufacturing cost, and discounted cash flow analysis. The plants require three years for starting up and their operating life is 17 years with a depreciation of 10% per year. The discounted cash flow rate of return (DCFRR) and the discounted breakeven period (DBEP) are used to access the profitability. From the results, it shows that the bio-phenol extraction plants are feasible and profitable.

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