EXCLUSIVE INTERVIEW WITH DR. IR. MEMET HAKIM MM, FOUNDER OF “PRODUCTION FORCE MANAGEMENT METHOD” ON OIL PALM
By: Aendra Medita Senior Journalist
Senior plantation expert, Dr. Memet Hakim, revealed that currently there is a need for production force methods for oil palm. The Chairman of the BUMN Care Expert Board also assessed that although the current global economic situation is still considered not conducive. Dr. Memet revealed that he has the concept of SOLVING THE PROBLEM AND MAKING PROFIT formulation which is the first in Indonesia and may be in the world, and this is what he will provide solutions for the oil palm plantation sector in the country. We are aware that the commandment continues to drive a sustainable Industry.
Indonesian palm oil has an important role for the Indonesian economy with the performance of palm oil trade that continues to increase. The following is an excerpt of an exclusive interview with Palm Oil expert Memet Hakim from Padjadjaran University, Bandung with Aendra Medita which is explained in detail to a number of solutions. Happy listening:
Question : Please tell us the history of this method
Answer : When I was assigned as the Administrator of the Bekri Oil Palm Plantation, PTPN VII, from 1984 to 1989, the plantation had a rich history. It was established in 1917, and the processing plant was built in 1925. The plantation covered an area of approximately 4,600 hectares, with the majority of the palms being over 15 years old. There were even some Dura palms remaining on a few hundred hectares, and the plantation was known for being highly susceptible to Ganoderma disease.
At that time, productivity was very low, averaging only 13-14 tons per hectare, and in some sections, it was as low as 10-11 tons per hectare. The conditions were often swampy, and during dry spells, the soil became very hard. The location was somewhat remote and less frequently monitored due to its peripheral nature. It was from here that efforts to improve productivity began. Bekri is located in Lampung Tengah, where the climate can be quite challenging. During long dry periods, there could be a water deficit of up to 500 mm, resulting in a potential productivity decrease of 60-70% due to lack of water. This posed a unique challenge, and various methods were attempted until, at the end of the fifth year, productivity increased to 20 tons per hectare. These field trials were conducted discreetly because they were not officially sanctioned. This is the background of the discovery of the PFM (Palm Fertilization Method).
Allah SWT guided us in improving the productivity of this palm by revealing some of the palm’s characteristics that had been overlooked, especially by researchers. When we observed the oil palm trees closely, we noticed certain characteristics that align with their genetic traits. Oil palm trees that result from hybrid seedling have a strong response to fertilization. When an oil palm tree is attacked by Ganoderma, it always produces new roots in front of attack area, meaning the oil palm “fights back” against Ganoderma by generating new roots to stay alive. This is why, as long as the number of new roots generated exceeds the number of roots that die due to Ganoderma infection, the palm tree will continue to grow and remain productive.
Oil palm roots struggle to grow in swampy environments. Moreover, in oil palm trees older than 10 years, the roots tend to grow around the base of the trunk. This indicates that the tree requires additional roots to access nutrients from the soil. This observation, although often overlooked, proves to be highly beneficial if properly managed. The canopy, as part of the plant responsible for photosynthesis, showed that if too many or too few fronds were retained, productivity would decline. Therefore, maintaining the right number of fronds in accordance with established norms is crucial. Fertilizer recommendations are essential for increasing productivity. The common approach involves interpreting leaf analysis results and the actual production data of the past 2-3 years, which, in practice, may not be accurate and may not lead to increased productivity. The routine in this approach often misleads agronomists and planters into thinking they are on the right path.
A more accurate approach is to interpret leaf analysis results, conduct field inspections, and determine the desired productivity level. In the future, the former Mill Manager at Bekri had the opportunity to become the General Manager of the plantation. Due to his engineering background, he conducted field trials on a large scale, covering almost 2,000 hectares (nearly 50% of the total area). Within three years, there was a significant increase in productivity from around 16-17 tons per hectare to 24 tons per hectare. If applied to the entire area, productivity would likely exceed 30 tons of fresh fruit bunches per hectare. These trials were not conducted openly because they would not have received approval from higher authorities. Only after the increased production was achieved did the company’s management show satisfaction. However, strangely, the Plantation Department did not fully support this success. There were internal issues that caused a decline in oil palm productivity in the company. The advantage of this system is that additional fertilizer (if needed) is provided after productivity has increased, so cash flow is not disrupted.
Question : How did the PFM method get started?
Answer : The initial idea for this method dates back to 1984-1985 when we were facing the issue of low oil palm tree productivity during a prolonged dry season. However, the method was developed after observing the results mentioned above. It was formally documented in 2006 when I published the book “Buku Kelapa Sawit, Teknis Agronomis dan Manajemennya, 2007” (Oil Palm Book, Agronomic Techniques, and Management) published by APPI (Indonesian Fertilizer Producers Association) and registered with the Ministry of Law & Human Rights of the Republic of Indonesia under No. COO201503008 on October 9, 2015.
This method has also been a topic of research in the PhD program at the University of Padjadjaran to strengthen the theoretical basis of the PFM method. The PFM (Production Force Management) method for oil palm has been discussed at the Plantation Management Conference in Kuala Lumpur, Malaysia, on December 4- 5, 2013.
Question : What is the principle of this PFM?
Answer : Oil palm plantations are a biological industry. The fundamental principle of this method is to care for the roots and canopy of the trees, requiring a new paradigm for oil palm tree care. In practice, many things have indeed changed, such as the way and frequency of fertilization, the creation of aeration trenches/water reservoirs, and the placement of trimmed fronds, among others.
What is observed more closely is what happens within the root and leaf surfaces. The primary principle of this method is to maximize nutrient absorption and photosynthesis in the leaves. When determining production benchmarks, the focus is on the next three years rather than the past three years, and the same goes for determining fertilizer dosages. Leaf analysis results may be the same, but the recommended dosages differ.
Everything is done with a new perspective so that oil palm productivity can approach the levels achieved in research studies. What is interesting for plantation owners and management is that the cost per hectare is relatively the same as regular maintenance, but the cost per kilogram of Fresh Fruit Bunches (FFB) and Crude Palm Oil (CPO) decreases significantly, ultimately resulting in higher profits. The increased costs are associated with harvesting, transportation, and road maintenance due to the higher production that needs to be transported. The profit-sharing principle is also one of the guarantees of success. This means that special bonuses are given to management and employees who have contributed to achieving this increase in production. These special bonuses are derived from the difference in profits achieved, ensuring that the additional profits are shared with both management and employees.
New Paradigm and Production Force Management method.
Question : How much can production be increased by using the PFM method?
Answer : Indeed, this method is unconventional, and its results are also extraordinary. The increase in productivity ranges from 30% to over 100%. Even mature palm trees over 20 years old can still be improved, as long as they are cared for, and improvements can reach over 50%. It may be hard to believe, but if Allah SWT provides us with such a facility, why not use it? As mentioned earlier, this method harnesses the special characteristics of oil palm trees that many people are not aware of.
Question : How much additional profit in Crops, Processing and Overall Business Profit?
Answer : The amount of profit of course depends on production and area. For example, there is an oil palm plantation with an area of 10,000 ha, all of which have entered productive age, the calculation is as follows: Productive Plant Area: 10,000 ha (Well managed, with 1 PKS 30 tons/hour) Current productivity: 15 tons/ha/year 150,000 tons FFB/year CPO + PKO yield : 28% . Palm Oil production: 28% x 150,000 tons = 42,000 tons
Calculation of Additional Gross Profit
Ha Tons % Total tons % Total Palm Oil IDR Billion % FFB/ha FFB OER Palm Oil Idr/Kg Income Cost Prod. Var. Cost Gross Profit 10,000 15 100 150,000 28% 42,000 10,000 420 252 – 168 100 20 133 200,000 28% 56,000 10,000 560 252 48 260 155 25 167 250,000 28% 70,000 10,000 700 252 96 352 210 30 200 300,000 28% 84,000 10,000 840 252 144 444 264 If the production increases by just 33%, the gross profit rises by 55%. If the production increases by 67%, then the gross profit will increase by 110%. And if the production increases by 100%, the gross profit will increase significantly to 164%. If we were to adhere to the old paradigm, these calculations would indeed seem impossible
Question : Is this method harmless to plants and the environment?
Answer : Not at all, in fact, it can even help prevent erosion more effectively, improve rainwater harvesting, and store organic matter in a place where it decomposes readily. In the field, trenches are prepared as one of the measures to protect the environment.
Question: What are the biggest barriers to acceptance of this method in the field?
Answer : There are psychological barriers as well, namely the concerns of the Board of Directors and those involved in plant production. They fear that by implementing this method, they may lose prestige in the eyes of their shareholders. There is also the fear of losing their positions, as if what they have been doing all along becomes meaningless. Of course, these concerns are unfounded and quite mistaken. In reality, as the company’s income increases, so does the prosperity of its employees. However, some may focus on the nominal amount they have to pay to consultants over the years, without considering how much money comes into the company and becomes the company’s profit. There are practically no technical barriers in the field, especially if shareholders, the Board of Directors, and the entire management team agree that this method leads to higher profits.
Question : Why is the PFM method difficult to be accepted by the Board of Directors of companies or research centers?
Answer : This is a matter of pride and reputation. Researchers are concerned that implementing this method might overshadow their established names in the world of oil palm research. Similarly, the Director of Production shares the same concerns. However, if we are willing to embrace change and gain new insights, we will always lead the way. It just so happens that the person who developed this method is a plantation practitioner who continued their studies after completing their years of service, so they are not a traditional researcher.
The copyright for this method is protected for 50 years and was registered through the Faculty of Agriculture at the University of Padjadjaran in October 2015, 12 years after retirement. If all oil palm plantations were to adopt this method, Indonesia’s national palm oil production could increase from 54-55 million tons to 75-80 million tons without the need for additional land. This would help meet domestic demand, including for biodiesel and cooking oil, without disrupting export needs
Question : What are the benefits of using this method for Palm Oil Plantation Business owners & Managers ?
Answer : Benefits for the Owner: Increased business profit, higher dividends, and a boost in stock prices. Benefits for the Board of Directors: Improved cash flow and higher bonuses or incentives. Benefits for Managers: Enhanced bonuses or incentives. 6 Benefits for Frontline Employees: Increased income. Overall, it can be said that the well-being of the owner, the Board of Directors, managers, and frontline employees improves. The arrangement of additional bonuses or incentives is necessary to maintain the continuity of production at a higher level.
Question In terms of cost, does this method require a large additional cost?
Answer : In the first year, if the budget for plantation maintenance is sufficient, there may not be a need for additional funds, but a budget reallocation may be necessary. For plantations with lower maintenance budgets, additional costs may be required, but they may not be substantial, as there are several budget items that can be utilized. In the second year, there is already a slight increase in production, and the difference in increased production can be used to add to the fertilizer purchase budget if necessary (although it may not necessarily be increased). In the third year, the increase in production is even higher. Half of the difference in additional income can be used for preparing additional fertilizer purchases and bonuses at the managerial level
Question : How much will it cost for the consultant?
Answer : The costs are indeed very minimal when compared to the profits that will be gained. A minimum 5-year contract is required to ensure production remains stable. The company only pays a few consultants prepared by the main consultant, and the number of consultants depends on the size of the oil palm plantation.
The consultant receives a 10% bonus on the difference in production increase at the end of each year, starting from the first year. The consultant will provide Fertilization Recommendations specifically tailored to support the PFM method, with separate payments. The consultant is granted maximum access to obtain information and reports on production and operational costs.
Question : Who can use this method?
Answer : Anyone willing to use it will be assisted until they succeed, but it is expected that the oil palm plantation area is at least 5,000 hectares. Individual farmers may find it practically challenging to implement, but farmers within groups such as plasma schemes, associations, and cooperatives can use this method. Independent farmers can also benefit from this method if they work together within a group. Plantation companies are the most straightforward entities to implement this method. (ED)