What counts as “small,” and why that matters In Indonesia, “small” palm oil mills are commonly 0.5–1 TPH (mini) up to 1–5 TPH (small-scale). Mini plants often center on a compact digester/press line with basic clarification; small-scale mills add automated fruit reception, sterilizing/cooking, threshing, better clarification, and some kernel recovery. That scope drives both capex (equipment, civil works) and opex (labor, power, water, maintenance). Typical core equipment for a small line includes: fruit reception, sterilizer/cooker, thresher, digester & screw press, crude oil clarification/settling, oil storage, kernel recovery, pumps, and a boiler/steam package (or heat source) sized to your throughput. Mini lines may omit some modules to hit a budget, but digesting/pressing and filtering are non-negotiable. Indicative equipment pricing Equipment vendors publish broad ranges. As a rule of thumb: Mini (0.5–1 TPH): roughly US$5,000–$30,000 for a very basic mechanical line (budget to robust), excluding buildings and utilities. Small (1–5 TPH): US$100,000–$260,000 for a standard module set; higher if you add better automation or full effluent treatment. Some suppliers cite US$20,000–$30,000 just for a small 5–10 t/day kit (≈0.2–0.4 TPH) when pared back to essentials; at the other end, better-equipped small plants rise quickly. These are equipment-only guideposts. The total project cost usually adds 40–120% on top for buildings, foundations, power & water systems, freight/duties, installation, and commissioning. Compliance costs you must plan for (Indonesia-specific) ISPO (Indonesian Sustainable Palm Oil): Indonesia’s mandatory certification has been progressively tightened. ISPO becomes mandatory for smallholders by November 2025, and mills buying from them will feel the compliance ripple (traceability, legality, HSE). Budget time and resources to align procurement and mill practices. Environmental approvals (AMDAL / UKL-UPL): Mills must secure environmental approval via Amdalnet, integrated with the OSS (Online Single Submission) system. Whether you need a full AMDAL or the simpler UKL-UPL depends on scale and impacts; either way, plan for baseline studies, documentation, and review time. POME (Palm Oil Mill Effluent) treatment: Discharge without proper treatment is prohibited. Even small mills need at least a pond system; many opt for staged anaerobic ponds or compact biological systems. Costs vary wildly by land availability, discharge targets, and whether you recover biogas. Taxes & duties: As of January 2025, VAT rises to 12% (some mitigating measures applied to select goods/services). Imported equipment may attract import duty depending on HS code and origin. Price your landed cost accordingly. Labor and utilities: baseline assumptions in Indonesia (2025) Labor: Minimum wages (UMP/UMK) vary by province—e.g., in 2025, Central Java ~IDR 2.17 million/month, East Java ~IDR 2.31 million, Bali ~IDR 2.99 million, East Kalimantan ~IDR 3.58 million. Skilled mill operators and technicians will command more than the provincial minimum. Power: The government held Q3-2025 electricity tariffs unchanged for non-subsidized groups; public info pegs Indonesia’s average paid tariff around IDR ~1,153/kWh (≈US$0.07/kWh) after subsidies/compensation. Industrial customers’ actual line tariff depends on the connection class and the demand profile. Thermal energy: Many mills fire mesocarp fiber and palm kernel shells in a small boiler to generate process steam. Mini mills without boilers may rely on diesel/LPG heat—raising opex but lowering initial capex. A realistic budget for a small mill (1–3 TPH) Below is a worked example for a new 1–3 TPH FFB mill located in a provincial growth area (assumes modest buildings, pond-based POME treatment, grid power with a backup genset, and basic kernel recovery). Dollar values are indicative; convert to IDR at your working FX rate and apply local tax/duty. A. Capital Expenditure (CAPEX) Cost item Typical range (US$) Notes Process equipment package (sterilizer/cooker, thresher, digester+press, clarification, pumps/tanks) 120,000 – 250,000 Based on mainstream small-scale suppliers’ 1–5 TPH pricing. Boiler/steam system (or thermal alternative) 25,000 – 80,000 Small fiber/shell-fired unit; or LPG/diesel heaters if no boiler (lower capex, higher opex). Kernel recovery (depericarper, nut cracker, small PK storage) 10,000 – 40,000 Scales with recovery targets. Fruit reception & handling (loading, conveyors, cages) 10,000 – 35,000 Minimal mechanization at low TPH. Utilities: electrical (MCCs, cabling), backup genset (80–200 kVA), water system 30,000 – 90,000 Grid connection varies by site; backup genset strongly advised. POME treatment (anaerobic/facultative ponds, drains) 20,000 – 100,000 Land-intensive but lowest capex; package plants cost more, smaller footprint. Buildings & civil works (foundation, floor, roofed process shed, lab/office) 40,000 – 150,000 Highly site-dependent; lightweight sheds reduce costs. Engineering, installation & commissioning 20,000 – 60,000 Vendor supervision + local fabricators. Environmental & licensing (AMDAL/UKL-UPL, ISPO readiness work) 5,000 – 25,000 Documentation, studies, audits. Freight, insurance, import duty & VAT 12% on dutiable items See note Apply to your selected BoM and Incoterms. Indicative CAPEX subtotal (ex-taxes/duties): US$280,000 – $830,000 for a thoughtful 1–3 TPH plant. You can push the low end toward ~$200k by minimizing buildings, using second-hand handling gear, and choosing thermal alternatives to a boiler; conversely, adding automation, better kernel lines, tanks, and compact POME packages can take you above ~$1.0m. B. Operating Expenditure (OPEX) Opex depends mostly on raw FFB cost (which dwarfs processing costs). Below are processing costs excluding FFB purchase, so you can compare against different sourcing models. Cost head Typical content Notes Labor 1 supervisor, 2–4 operators/shift, 1 mechanic, 1 lab/QA, loaders Budget above provincial minimums for skilled roles. Power Grid kWh for drives, pumps; diesel for backup; small compressor Indonesia’s paid average ≈ IDR 1,153/kWh; your industrial class may differ. Thermal fuel Fiber/shell (if boiler), or LPG/diesel heaters Using biomass cuts cash opex but needs handling. Water & chemicals Clarification aids, boiler water treatment, and lab consumables Scale with throughput and water quality. Maintenance & spares Press worms, cages, bearings, pump seals, gear oil Rule-of-thumb: 2–4% of replacement asset value per year for basic plants. Waste & compliance Pond maintenance, desludging, and environmental monitoring Higher if discharge limits are tight. Logistics Inbound FFB collection, outbound CPO/PK dispatch Strongly site-dependent (road, distance). Overheads Security, admin, insurance — A lean 1–3 TPH line can often process (excluding FFB) at US$8–$20 per ton FFB in steady operation when biomass fuels most steam needs; thermal via diesel/LPG can add several dollars/ton. Treat these as planning placeholders you’ll