Determination of Technological Capabilities of Palm Oil Processing Enterprise

Research Paper (postgraduate) , 2024 , 21 Pages

African Studies - Miscellaneous

Palm oil production, based on small-scale production, was a leading foreign exchange earner for Ghana from about the mid-nineteenth century to the beginning of the twentieth century (MASDAR, 2011). Most of the oil palm processors in Ghana produce on small scale, and some of the methodology used are not effective and efficient to boost production. The main objective of the study was to assess the technological capabilities of mill processors in palm oil processing enterprise in Juaben Municipality. The specific objectives of the study were to: determine technologies that are available to the processors and the factors limiting the development of their technological capabilities. Snowball sampling technique was used to select 79 respondents which included mill owners/managers, mill operators and floor workers. Data were collected using a well-structured questionnaire and were analysed using Microsoft excel. The findings shown that 92.41% were females and few (7.59%) of them were males and most (60.75%) of the youths are not involved in the palm oil business because of the difficult and tiring activities (the use of hands to remove the palm fruits from bunches, the operation of the screw press with ones’ own strength) of the palm oil processing. The findings revealed that all (100%) of the mill processors operated semi-automated oil mill system, digester, and oil press. 64.56% had no capability in terms of investment in machinery/equipment, 73.42% had no investment capability in human resource development and linkage (75.78%) capabilities. The major constraints to their technological capabilities unavailability of appropriate machines/equipment, lack of fund for expansion, poor access to good road for transport to get raw materials, lack of water for work and lack of labour. Extension should have a close relation with oil palm processors for dissemination of information about the existing new technologies, tools and knowledge in oil palm processing.

Determination of Technological Capabilities of Palm Oil Processing Enterprise in Juaben Municipality

Abstract

Palm oil production, based on small-scale production, was a leading foreign exchange earner for Ghana from about the mid-nineteenth century to the beginning of the twentieth century (MASDAR, 2011). Most of the oil palm processors in Ghana produce on small scale, and some of the methodology used are not effective and efficient to boost production. The main objective of the study was to assess the technological capabilities of mill processors in palm oil processing enterprise in Juaben Municipality. The specific objectives of the study were to: determine technologies that are available to the processors and the factors limiting the development of their technological capabilities. Snowball sampling technique was used to select 79 respondents which included mill owners/managers, mill operators and floor workers. Data were collected using a well-structured questionnaire and were analysed using Microsoft excel. The findings shown that 92.41% were females and few (7.59%) of them were males and most (60.75%) of the youths are not involved in the palm oil business because of the difficult and tiring activities (the use of hands to remove the palm fruits from bunches, the operation of the screw press with ones’ own strength) of the palm oil processing. The findings revealed that all (100%) of the mill processors operated semi-automated oil mill system, digester, and oil press. 64.56% had no capability in terms of investment in machinery/equipment, 73.42% had no investment capability in human resource development and linkage (75.78%) capabilities. The major constraints to their technological capabilities unavailability of appropriate machines/equipment, lack of fund for expansion, poor access to good road for transport to get raw materials, lack of water for work and lack of labour. Extension should have a close relation with oil palm processors for dissemination of information about the existing new technologies, tools and knowledge in oil palm processing.

Keywords:Technological capabilities, palm oil, mill processors

Introduction

Technology has been described as the science or knowledge put into practical use to solve problems or invent useful tools. Over the past decades, Africa has benefited from a wide range of new technologies and interventions from both internal and external development assistance seeking to improve the chances of the continent feeding itself (Nicholaset al.,2013). Although it cannot be denied that some progress has been made in certain areas, the reality today is that a high number of Africans still remain vulnerable to hunger (Nicholaset al.,2013). Farmers play vital role in the production and processing of crops needed for us to survive. Without food, the world would slowly die, and farmers work hard every day to keep plenty of food in the market. The changing nature of our work and skills is an evidence-based analysis of the impact of technology on labour markets and skills. The ability of a company to execute any relevant technical function, including the ability to develop new products, processes, and technological knowledge in order to obtain higher levels of organizational efficiency (Tsia, 2004) is termed as technological capabilities. Technological capability is understood here as the skills (technical, managerial or organizational) that enables firms (farms or actors) to efficiently use equipment and information and improve on the technology. Palm oil is the world’s most produced, consumed and traded vegetable oil (WWF, 2020). It is widely used in the manufacturing of many products, from margarine to lipstick, biscuits to candles, and chocolate to laundry detergent. It is also extensively used as a biofuel and as animal feed. Palm oil is a very efficient crop and contributes to rural poverty alleviation and rural development in many regions. The oil palm industry is of strategic importance to Ghana’s agricultural sector and the economy as a whole. It is the country’s second most important cash crop after cocoa and makes a key contribution to agricultural development (Asante, 2021). The palm oil sector provides income and employment for a significant number of individuals in developing countries. Over the years, the digesting/pounding of the parboiled fruits was done manually using local pestles and mortars until recently when mechanical, diesel engine-operated machines became available (Esiobuet al.,2019). Efforts to mechanize and improve traditional manual procedures have been undertaken by research bodies, development agencies, and private sector engineering companies. They have generally concentrated on removing the drudgery associated with mashing and pounding stage (digestion), and improving the efficiency of oil palm extraction (Akandeet al.,2013).

Small mechanical, motorized digesters have been developed in most oil palm cultivating African countries (Poku, 2002). People are therefore happy with the machines because of labour scarcity, lack of labour to hire and relatively high cash expenditure to pay for the labour. The oil winning process, in summary, involves the reception of fresh fruit bunches from the plantations, sterilizing and threshing of bunches to free the palm fruit, mashing the fruit and pressing out the crude palm oil. The crude oil is further treated to purify and dry it for storage and export. Despite the crop being a national high priority since 2003, Ghana's productivity and total national production of oil-palm still falls far behind that of Southeast Asian and Latin American countries (Moncoquet & Ros-Tonen, 2019). Some oil mills have shut down due to poor technological capabilities, some new ones have been established, while others have continued to flourish over the years (Ofoka & Nwalieji, 2019). As global populations increase, the demand for palm oil is likely to continue to rise (Murphyet al.,2021). The Oil Palm Development Association of Ghana has served as a vehicle to improve and promote high quality oil palm production in the country to meet the international standard. The grading system set up according to the standards are as follows: Grade A oil otherwise called Soft oil contains less than 5% free fatty acids, Grade B oil contains more than 5% FFA (MASDAR, 2011). Soft oil is of higher quality and commands better price in the market. The higher the FFA, the lower the grade of the oil. Technical grade: Grade 1- not more than 9% FFA, Grade II- not more than 18% FFA, Grade III- 18% - 27% FFA, Grade IV- 27% -36% FFA and Grade V- more than 36% (Ofoka & Nwalieji, 2019). The qualities and quantities of oil processed by some fruit processors are acceptable according to the above grading system while those of others are inconsistent and sometimes objectionable with regards to taste, flavour, colour, texture, low quantities and general appearance due to differences in the technological capabilities of the processing enterprises (Ofoka & Nwalieji, 2019). However, the need to investigate the technological capabilities of palm oil processing for effective and efficient production becomes crucial. The study therefore sought to examine the technological capabilities of palm oil processing enterprise in Juaben municipality. The specific objectives of the study were to:

i. Determine technologies that are available to the palm oil processors;
ii. Determine the factors limiting the development of technological capabilities of mill processors.

Materials and Methods

The study was carried out in Juaben Municipality in Ashanti region. The study focused on the population of people involved in palm oil processing in the study area and snowball sampling technique was used to select 79 respondents which included mill managers, mill operators and floor workers of the oil palm processing industry in the Juaben Municipality and were interviewed in the research. Data were collected through the use of a well-structured questionnaires and observation. The structured observation technique was employed to corroborate the information obtained from them through the interview. The respondents were grouped according to their functional activities i.e. mill managers, mill operators and floor workers. To determine technologies that are available to the palm oil processors, they were asked about all the available technologies used. To examine their technological capabilities, the questionnaire was sectioned into four parts: investment capabilities, production capabilities, linkage capabilities and no capability for them to respond.

Another questionnaire was divided into four sections for the respondents according to the second objective. To identify the factors that influence the development of technological capabilities of the mill processors, each participant was asked to respond to the possible factors (poor funding for research, poor learning opportunities, lack of manpower, unavailability of technology etc.) using a four-point Likert type of scale of " to a great extent"(4), "to some extent (3)", "to a little extent (2)" and "to no extent (1)". The mean value of the number of response received was used to determine whether those factors influence their technological capabilities to a great extent, to some extent, to a little extent or to no extent. The data acquired was analysed using Microsoft Excel and results were presented in graphs and tables.

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Figure 1: Map of Juaben municipality

Results and Discussion

Gender of respondents

Data in Figure 2 shows data of respondents which included that mill operators, oil palm processors and floor workers. Females (92.41%) and few of them were males (7.59%).

Women play an important role in the production, storage and commercialization of the red palm oil. (Walker 2010). Generally, women are the dominant actors in the palm oil business.

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Figure 2: Gender of respondents

Respondents’ ages

Figure 3 depicts the ages of the respondents, majority (29.11%) of them were between the ages of 41 to 50 years, 22.78% were between 20-30 years, 21.52% were 51-60 years, 16.46% were between 31-40 years, 7.59% were between 61-70 years and 2.53% were between 71-80 years. It shows that most of the youths are not involved in the palm oil business. Upon further interactions with the processors it was disclosed that majority of the youths are not involved because of the difficult and tiring activities (the use of hands to remove the palm fruits from bunches, the operation of the screw press with ones’ own strength) of the palm oil processing. The small scale extraction and semi-mechanized process is time consuming, labour intensive and tedious (Taiwoet al.,2000; Orji and Mbata, 2008).

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Figure 3: Ages of respondents

Available Machinery/ Technologies to Mill Processors/operators

Results in Figure 4 shows that none (0%) of the mill operators operated non-automated oil mill system, semi-automated mill system (100%) and none (0%) operated fully automated mill system. The majority of the processing operations of the small scale processors in Juaben municipality were done manually without any equipment. The only operations that were mechanized were the pounding of the fruits and the extraction of the oil. Automated refers to those equipment or machines that are connected to auto-engines to operate.

It is known that, non-automated implies that the mechanical screw press and any other equipment are operated manually (Ofokaet al.,2019). During the research study, it was observed that the semi-automated starts from drum cooking of fruits - automated digesters - automated presses - manual oil filtering to manual fibre separation, while none (0%) of the mill operators operated fully automated oil mill system. Fully automated milling system starts normally from steam sterilization- automated digesters - automated press - oil filter (or clarifier tanks) and finally to automated fibre separator.

The availability of the above equipment and machinery (digester screw press, hand spindle press) relieve the processors from drudgery associated with mashing and pounding stage (digestion) and improving the production efficiency and quantity of palm oil produced. Adeniyi, Ogunsola & Oluwusi (2014) reported that pounding (digestion) and oil extraction are the most tedious and essential operations in traditional palm fruit processing. Most of the processors patronize the semi-automated oil mill system because it is more affordable and requires low initial and maintenance costs (Owolarafeet al.,2008). The disadvantage is that it requires maximum effort to operate.

Illustrations are not included in the reading sample

Figure 4:Oil mill system operated by the mill operators

From the study as shown in Figure 5, Hundred percent of the mill operators (100%) had digester, and none of them had stripper (0%) and sterilizer (0%). The palm oil digester includes a heated cylindrical container equipped with a central rotating rod carrying some stirring or beating arms. It is used to crush sterilized palm fruits to fruit pulp in palm oil production. The extraction efficiency of palm oil is greatly improved after digesting process. The stripping/threshing of the palm fruits are done manually (by hands) because there is no stripper, this consumes more time leading to low production.

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Figure 5:Digestion machinery/ equipment used by oil palm processors

Figure 6 depicts that all (100%) of the processors had manual screw presses; none (0%) of the mill operators had hydraulic press, jack press, fibre/nut separator, lift/conveyor, nut cracker, and welding machine.

The mechanized extraction method is capital intensive and requires high costs of processing capacity, expensive infrastructural and logistics supports, and highly qualified maintenance engineering staff. It therefore makes it difficult for small scale processors to embrace (Taiwoet al.,2000; Owolarafeet al.,2002; Orji, 2006; Orji & Mbata, 2008). That is why in Ghana and some parts of West Africa, 23% of the national FFB production is processed through the mechanized mills while the remaining 77% is handled using inefficient small scale processing methods (Taiwoet al.,2000).

The oil yield of the hydraulic press systems are generally between 70% and 90%, and the hand spindle press systems are between 60-80% depending on the strength of the man who operates the system and whose work efficiency diminishes in the latter part of the workday due to tiredness (Baryeh, 2001; Owolarafeet al.,2002).

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Figure 6:Oil press machines used by the processors

Investment Capabilities of Palm oil Processors

Investment capabilities are presented by project execution activities including feasibility studies, equipment acquisition, employees training etc. Hence, investment capability was either investment in machinery (equipment) or human resource development. Figure 7 shows that 64.56% of the mill owners/operators claimed they had no capability while 35.44% had in terms of investment in equipment. Machinery/ equipment play a key role in production and therefore it is a good idea to invest in them in terms of purchase of new ones or repair and maintain these machines. Some of the processors/ operators do not understand what we termed as maintenance, they wake up right from their beds and get to their workplaces and just start the machine without a thorough check of the mechanical parts like the bolts and nuts, belts, shafts, etc. leading to unexpected breakdown of the machinery. The 64.56% represents these owners/ operators. The 35.44% are those who take their repairs and maintenance serious and are willing to invest in their machinery. The same figure also shows that majority of them (73.42%) had no investment capability while 26.58% had in human resource development. The success of every business depends on the knowledge one has or gains/acquired from others so therefore training or acquisition of knowledge becomes very important. They do not undergo any training on the right type of palm fruits to use, processing of palm fruits, safety training, and the needful skills in operating the machines/equipment. The 73.42% represents those processors who had never had any type of formal training on good processing practices but a few (26.58%) had attended a training workshop on other topics. They disclosed that the knowledge and skills in processing the palm fruits into oil were acquired from friends or parents who had been in the palm oil business. This implies that oil mill owner/operators are not adequately inclined in terms of the oil palm production and technology changes.

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Figure 7:Processors that had acquired investment capabilities

Production Capabilities of Oil Mill Processors

Table 1 shows the quantity of palm oil (in litres) that the processors get from their palm fruits in a day. The Entries show that majority (60.76%) of the processors produced less than 250 litres, 26.58% produced <500 litres, 8.86% produced <750 litres and 3.80% more than 1000 litres in a day respectively. The quantity of palm oil produced in a day depends on the amount of palm fruits, labour, availability of water, availability of mill operators, the strength of the operator and the efficiency of the machine.

Table 1:Quantity of palm oil produced by the processors

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Linkage capabilities of processors with other value chain actors

Table 2 shows that mill processors/operators (100%), had linkage with marketers of oil, 100% had linkage with consumers, only 10% had horizontal linkage with other fellow mill operators, 100% had direct linkage with farmers, and 68.90% had linkage with extension agents. This result shows that mill processors/operators had low linkage capabilities with mill operators and extension agents. The processors do not get adequate knowledge from the extension officers hence resulting in low production and also monitoring and evaluation of the activities of palm oil processors in Juaben municipality by extension agents is yet to be given adequate attention, hence the low linkage of mill processors with extension agents. They revealed that they have access to bulk of fresh fruit bunches (FFB) produced by farmers. They disclosed that market women, food vendors and soap makers are those who patronize the palm oil produced. These marketers pay readily, prepay and others too on credit but the processors prefer readily and prepay because the money received is reinvested into the business. Interactions between actors will allow them swap information and enhance learning (Molina-Domene & Pietrobelli, 2012; Obiora & Madukwe, 2012).

Table 2: Linkage capabilities with other value chain actors

Illustrations are not included in the reading sample

Factors Influencing the Development of Technological Capabilities of Mill Processors

Table 3 shows that lack of labour affects 67.1% of the processors to a great extent, 19% to some extent, 10.1% to a little extent and 3.8% to no extent, lack of power source affects 48.10% of them to a great extent, 16.46% to some extent, 15.19% to a little extent and 7.59% to no extent, Lack of water for work (69.62% to great extent, 10.13% to some extent, 7.59% to a little extent and 12.66% to no extent), lack of technical information (75% to great extent, 6% to some extent, 15% to a little extent and 4% to no extent), lack of modern processing equipment (96% to great extent, 6% to some extent), difficulty in obtaining credit facilities affect all of them (100%) to great extent, poor government policies (82% to great extent, 10% to some extent and 8% to a little extent); poor quality of product, stealing of raw materials/oil palm/other products, poor prices of products, spoilage of fruits and spillage of oil affect all of them (100%) to great extent, lack of storage facilities (59.49% to great extent, 24.05% to some extent and 16.46% to a little extent), lack of factory space (46.84% to great extent, 26.58% to some extent and 26.58% to a little extent), lack of finance affect all of them (100%) to great extent, lack of interaction among actors (53% to great extent, 14% to some extent, 23% to a little extent and 10% to no extent), poor access to market (62% to great extent, 7% to some extent, and 31% to no extent), seasonal scarcity of palm fruits all of them (100%) to great extent, poor extension agent contact (50.6% to great extent, 24.1% to some extent, 17.7% to a little extent and 7.6% to no extent), lack of fund for extension (84% to great extent, 15% to some extent, and 1% to a little extent), lack of maintenance culture for machines (55.7% to great extent, 26.58% to some extent, 15.19% to a little extent and 2.53% to no extent), poor access to good road for transport (81% to great extent, 15% to some extent and 4% to a little extent), and easy access of machine operators (21.52% to great extent, 56.58% to some extent, 36.71% to a little extent and 15.19% to no extent). These are the possible factors that influenced technological capabilities of the processors.

Table 3:Factors that influenced technological capabilities of the oil mill processors

Illustrations are not included in the reading sample

Lack of labour was also mentioned as one of the constraints facing the palm oil processors. The processors disclosed that some often consider palm oil processing as a dirty job hence, they are not willing to engage themselves in the processing enterprise and other factor is those people complain that the salary given to them is not much and therefore decided not to do the job because of that they find it difficult to get labour. (Haeussler, Patzelt & Zahra, 2012) revealed that lack of skilled manpower has been identified as important factor for the low level of technological capability development in many firms in developing countries. Factor 2 has to do with lack of power source. A larger proportion of the processors did not have electricity at their milling sites. They only work during the day and when it’s getting to the evening they have to halt all activities and close. This leads to low production.

Lack of water for parboiling was one of the limiting factors affecting their technological capabilities. Water is a necessity in palm oil processing. Findings from the study revealed that most of them do not have water source (borehole, well etc.) at the sites. They buy water from commercial water distributors and some even travel long distances to fetch water before they can start work and this leads to delay of production.

Factor 4 was lack of access to credit has brought untold hardship to the processors, in that even when they have an opportunity to buy or rent farms at a relatively low rate, they will not be able to access fund to buy or pay for it. This problem of lack of credit facility was linked to their inability to have a functional association. Respondents confirmed that each time they try to get credit individually, the banks usually ask of the trade union they belong to or collateral to cover for the credit facilities, either of which they do not possess.

Lack of finance was also identified as one of the constraints facing palm oil processors, because most processors expressed willingness to own their individual processing mills but for lack of capital to establish it. Milling machinery requires heavy capital investment, and hence, it is not in the range of firms that lack sufficient finance. Hence, only firms with access to enough finance would be more able to adopt advanced technologies (Ghobakhloet al., 2011). Even those who owned the few mills available, complained about lack of adequate equipment to operate them. Most mill owners express concern about their inability to equip their staff properly, equipment such as; helmets, wheelbarrows and hand gloves ought to be given to workers at mills, but due to inadequate capital, they are unable to provide these. This problem is also linked to lack of access to credit facilities.

Poor quality of palm oil was also mentioned as one of the constraints facing the palm oil processors. They revealed that because of poor quality of their palm oil they are not able to sell to local industrial and international markets. If the quality of their oil is high, it would increase the demand for palm oil and provide opportunities for the processors to improve their incomes.

Poor access to market was among the constraints mentioned above. The roads leading to market from the mill are deployable and in bad condition leading to wear and tear of transportation system parts.

Lack of fund for extension was another limiting factor. Oil palm processors find it difficult to invest in expansion of the business, training and development or acquisition of modern machinery due to inadequate funding. Also poor funding will not allow business diversifications to cushion the effects of seasonal scarcity of palm fruits during some months of the year (Ofokaet al., 2019). Hence, the major constraint to adoption of an improved oil palm production was lack of fund.

The issue of seasonal scarcity of palm fruits is a natural influencing factor; hence processors should engage themselves in other businesses during non-peak periods to keep themselves busy. Such businesses may include cracking of kernels, secondary processing of stored palm oil, petty trading, etc. (Ofokaet al., 2019).

Another factor has to do with poor learning opportunities and lack of interactions among actors. Such learning will permit the actors to accumulate technological capability in mechanical oil palm fruits processing industry. Lack of interaction hence implies that there will be no opportunity of learning and development of technological capabilities of the mill operators.

Processors also complained about poor prices of products. These set of processors asserted that it was the buyers of the palm oil that fix the price because they have a functional association hence, processors are unable to control the price for the buyers. If there is price control, processors income will not be determined by market forces, hence improving their income to invest and produce more.

Stealing of raw materials/oil palm/other products were dominated by poor infrastructure and lack of storage facilities. According to FAO (2013), a good marketing infrastructure, maintenance of rural roads, supply of water, and marketing services have profound effects on food availability, market prices and physical access to food at the community level.

Poor access to good road for transport was among the constraints mentioned. Bad feeder road was mentioned by the respondents as one of the constraints facing processors. These respondents asserted that most of the farms where the palm fruits are gotten from are not accessible for vehicles. Besides, most drivers often object to carrying palm fruit bunches because they complained that the oil from the fruit get their vehicle stained and dirty.

Respondents further asserted that bad road leads to high transportation fare, and this increases processors’ hardship and cut down on their profit margin. However, if the feeder roads are accessible to motorists, then processors will likely pay less and earn more profit in their processing enterprise.

Conclusion and Recommendations

The major factors that influenced mill processors’ technological capabilities were; unavailability of appropriate machines/equipment, lack of fund for expansion, poor access to good road for transport to get raw materials, lack of water for work and lack of labour. Extension should have a close relation with oil palm processors for dissemination of information about the existing new technologies, tools and knowledge in oil palm processing. Funds should be made available by government agencies and financial institutions to smallscale palm oil processors by granting credit facilities to them, this will enable processors to purchase recommended palm oil milling technologies. Again, there should be an appropriate user friendly operated oil processing machinery/ and equipment which can be easily maintained. Thus, it will go a long way to help boost up production, export the palm oil and also create employment as well.

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• College: Kwame Nkrumah University of Science and Technology
• Author: Emmanuel Agyekum (Author)
• Publication Year: 2024
• Pages: 21
• Catalog Number: V1459994
• ISBN (PDF): 9783389003503
• Language: English
• Tags: Technological Capabilities, Palm oil, Mill processors