Cacao Processing Plant , South East Sulawesi, Indonesia

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This proposal provides recommendations towards the execution of a design for a cacao processing plant to produce cocoa liquor, powder, and butter from fermented cocoa beans in the North Kolaka district of South East Sulawesi province, Indonesia.
With rising demand globally for chocolate and chocolate derived products, the need is evident for increasing the output of cacao products across the entire supply value chain. Indonesia produces roughly 15% of the world’s cacao, trailing the leading producers, namely Côte d’Ivoire and Ghana
1.
The plant is intended to be located in close proximity to approximately 40,000 Ha of cacao farms.
Currently, cacao pods are transported approximately 200 km to Unahaa Town, the nearest warehousing facility, incurring a large financial and time cost. From Unahaa, the pods are transported to Makassar for processing, or exported to foreign processing plants in Europe, Britain or the United States.
Cacao plantations yield approximately 2 tonnes per Hectare (T/Ha)
2. By maximizing the utilisation of the local farms and lands, cacao plantations are estimated to double, with a predicted yield of up to 160,000 tonnes per annum. The processing plant will also provide a source of labour and may serve as a catalyst to unlock further foreign investment for the area.as been considered for an initial capacity of 120,000 tonnes/year. A total permanent investment of €16 M. The proposed cacao processing plant therefore is estimated. This price excludes other capital costs such as land acquisition, establishment of localised infrastructure and extending established infrastructure to the project site. Additional co the plant construction include :
a review of the existing infrastructure in the local area,
review of current market processes for the plantations in the area, and
identification of required and related infrastructure for the successful operation of the processing plant.

Section 1: Introduction and Background Information

1.1. Introduction

Indonesia is the world’s third largest cocoa producer with over 800,000 tonnes of raw cacao beans per year being produced. Interestingly, 70% of this production comes from the Sulawesi area, mostly from plantations privately owned by small-scale farmers. However, the plantation market is not at its optimal due to a lack of technological advances, agricultural techniques, harvest handling, pest and disease control and land management. It therefore follows that the current production is not at its maximum, required to realize higher profits. However, more importantly for this proposal, is that the current cocoa development initiatives are in three provinces, viz. West Sulawesi, South Sulawesi and Central Sulawesi. There are currently no processing plants in the South-East Sulawesi province, the closest plants being located in Makassar. The red place markers in Figure 1 below indicate Cacao producing areas.

The proposed plant will be located in North Kolaka, South-East Sulawesi and will be designed to initially process approximately 80,000 tonnes/year of cocoa beans, ramping up to 160,000 tonnes/year pending favourable conditions. This location was chosen due to its abundance in cacao bean plantations, which currently supply processing plants located out of the region. Furthermore, it is envisioned that the area of North Kolaka will be developed including a harbour.

1.2. Proposal Objective and Methodology

The main objective of this proposal is to prepare a preliminary task list and a road map of how to proceed with the development of a cacao processing plant for North Kolaka.
The methodology of the proposal is to:
Motivate for a cocoa processing plant in the South-East Sulawesi region,
Understand the workings of a cocoa processing plant and requirements,
Identify the key components and provide estimates of costs, to render a plant cost,
Identify utility requirements and related infrastructure,
Identify important considerations,
Provide recommendations and a project program for the design stage.

Section 2: Concept Stage

2.1. Market Analysis

To transform cacao beans into a consumer targeted product, the beans are processed into three main products: cocoa liquor, cocoa powder, and cocoa butter. Cocoa liquor is solid, unsweetened baking chocolate made from ground cacao nibs, which can be further transformed into cocoa powder and cocoa butter. Cocoa butter is the fat of the cacao nib, and may be used in lotions and pharmaceutical products. It is also the main ingredient in white chocolate. Cocoa powder is the solid product of the cacao nib and can be processed to have varying fat content. The powder is used in beverages, baking, and frequently as a dye. Chocolate is produced by combining both cocoa powder and butter with milk and sugar. With such diverse applications for cocoa liquor, butter, and powder, cacao bean processing is a worthwhile process to invest in.
The market for chocolate and cocoa derived products has grown strongly over the last few years. Demand is mainly driven by growing middle class populations in Brazil, India, China, amongs others, and domestically in Indonesia.
Indonesia processes roughly 30% of the worlds cacao. Although plantations in South-East Sulawesi are common, the province is not recorded to have cacao processing factories. However, the prevalence of plantations in the province does motivate for a further investigation and proposal towards establishing a local processing plant.
The location of the process plant proposed herewith for North Kolaka, is currently surrounded by cacao plantations in the region of 40,000 Ha with potential of reaching 80,000 Ha being predicted.
The plantations are owned and run privately, and the harvests are transported to processing plants outside the area; the nearest being in Makassar, approximately 800km away. Establishing a processing plant close to the farms shortens the value chain and potentially increases farmers’ profits and decreases losses.
Besides the cost of transportation, other challenges to transporting cacao beans over long distances include rain / wet bags, dirty sacks, oil stain sacks, torn/burst sacks and weight loss, which contribute to rejections upon delivery. These issues motivate the need for a local processing plant in the South-East Sulawesi area.

2.2.Competitive Analysis

Currently, cacao plantations in Indonesia cover a total area of 1.75 million hectares with production reaching 828,255 tonnes, spreading almost in all provinces with the main production centers being in the provinces of South Sulawesi, Southeast Sulawesi, Central Sulawesi, West Sulawesi, North Sumatra, East Kalimantan, NTT and Java East. Most (94%) of the cocoa plantations belong to smallholder plantation (Rosmawaty, 2015). Cacao processing facilities are found in the South, Western
and Central Sulawesi regions.
The absence of processing plants in the South-East Sulawesi province raises questions as to why it has
not been implemented to date. The reason for this disparity in supply versus local processing facilities is not fully understood, but may be attributed to low crop quality, low farming expertise or challenging accessibility. However, these issues can be addressed by supplementary development programs aimed at empowering farmers and increasing their output.
Rosmawaty et al (2015) studied the development potential of the cocoa industry in South-East Sulawesi. According to their research, the area has cacao as a priority commodity among estate crops
and contributed a 19.3% share of the total national production. The details of land area, production, productivity and the number of cocoa smallholder farmers in Southeast Sulawesi province during the period of 2009-2013 are presented in Table 1.


Table 1. Land Area, Production, Productivity and Number of Cocoa Smallholder Farmers in Southeast
Sulawesi Province for the Period 2009-2013 (Rosmawaty, 2015)

 

Credit :

1 World Consultants
Mohamed Peer B.Sc. (Elec) Pr. Eng.
mohamed@1wc.co.za
Fatima Peer B.Sc. (Hons) Pr.Sci.Nat., IAIAsa
fatima@1wc.co.za

 

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