The Impact Of Independent Smallholder Fresh Fruit Bunch Quality On Corporate Profit Through Cpo Production

Dolly Juanito; Mhd Asaad; Rasidin Karo Karo

doi:10.37676/agritepa.v13i1.9497

Dolly Juanito Universitas Islam Sumatera Utara
Mhd Asaad Universitas Islam Sumatera Utara
Rasidin Karo Karo Universitas Islam Sumatera Utara

DOI: https://doi.org/10.37676/agritepa.v13i1.9497

Keywords: Petani Swadaya, Kualitas TBS, Volume Produksi CPO, Laba Perusahaan

Abstract

Purpose : This study aims to analyze the effect of Third-Party Fresh Fruit Bunch (FFB) Quality (X) on Company Profitability (Y) at PT Sinergi Perkebunan Nusantara, by specifically examining the role of Crude Palm Oil (CPO) Production Volume (Z) as a mediating variable. Methodology : The Method of this research employed quantitative by case study approach using secondary time-series data from 2021–2024, this research applies path analysis to test the proposed causal relationship model. Results : The results of the research indicate that Third-Party FFB Quality, particularly the quantity of supply dimension, has a significant and positive effect on CPO Production Volume. Increased purchase volumes effectively mitigate chronic idle capacity issues, while improvements in the intrinsic quality of FFB contribute to achieving a superior Oil Extraction Rate (OER). Furthermore, higher CPO Production Volume is proven to be a primary driver of Company Profitability through economies of scale, which substantially reduce the Cost of Goods Sold (COGS) and enhance revenue potential. Findings : These findings conclusively confirm the mediation hypothesis, whereby CPO Production Volume functions as a crucial causal bridge that transmits upstream supply chain advantages into superior corporate financial performance. Novelty: The Novelty of this research enriches the literature on operations management and production theory by providing empirical validation of the mediating mechanism of operational variables in linking raw material input quality to financial performance in industries characterized by high fixed-cost structures. Originality: The research managerial implications emphasize the urgency of shifting the paradigm from transactional relationships toward strategic partnerships with independent smallholder farmers. Conclusion: The implementation of quality-based incentive schemes and technical assistance programs is essential to ensure the sustainability of corporate profitability. Type of Paper : Research Article.

Downloads

Download data is not yet available.

References

Abdul Rahman, S., & Abdullah, N. (2022). Supply chain integration and performance in the Malaysian palm oil industry. Journal of Cleaner Production, 340, 130812. https://doi.org/10.1016/j.jclepro.2022.130812

Adnan, N., Nordin, S. M., & Noor, A. (2021). Mediating role of supply chain agility in the relationship between supply chain integration and firm performance: Evidence from Malaysian palm oil industry. Sustainability, 13(4), 1845. https://doi.org/10.3390/su13041845

Ahmad, F., & Yusoff, M. N. H. (2020). Economic analysis of palm oil production in Malaysia: Profitability and efficiency. Journal of Oil Palm Research, 32(2), 245-254. https://doi.org/10.21894/jopr.2020.0036

Ali, M. H., & Yusoff, M. H. (2019). Fresh fruit bunch quality and oil extraction rate in palm oil mills: A review. Journal of Oil Palm Research, 31(4), 567-578. https://doi.org/10.21894/jopr.2019.0042

Arifin, B., & Syahza, A. (2023). Idle capacity reduction strategies in Indonesian palm oil mills: A case study approach. International Journal of Production Economics, 255, 108716. https://doi.org/10.1016/j.ijpe.2022.108716

Atmaja, Y. P. (2018). Pengaruh kapasitas olah, ketersediaan bahan baku dan capaian rendemen terhadap harga pokok pengolahan pabrik kelapa sawit di Pabrik Kelapa Sawit Torgamba PT. Perkebunan Nusantara III (Persero).

Basiron, Y., & Weng, C. K. (2021). Palm oil industry in Malaysia and Indonesia: Sustainability challenges and opportunities. Journal of Oil Palm Research, 33(1), 1-12. https://doi.org/10.21894/jopr.2021.001

Christopher, M. (2016). Logistics & supply chain management (5th ed.). Pearson.

Handfield, R. B., Monczka, R. M., Giunipero, L. C., & Patterson, J. L. (2020). Sourcing and supply chain management (7th ed.). Cengage Learning.

Hasanudin, U., & Nurhayati, S. (2022). Time series analysis of palm oil production and profitability in Indonesia. Agricultural Economics, 68(3), 112-121. https://doi.org/10.17221/456/2021-AGRICECON

Ibrahim, M. A., & Rahman, S. A. (2020). Economies of scale in palm oil processing: Evidence from Malaysian mills. Journal of Agricultural Science, 12(5), 45-58. https://doi.org/10.5539/jas.v12n5p45

Ismail, R., & Zainal Abidin, N. (2023). Quality variability of fresh fruit bunches from smallholder farmers and its impact on palm oil mill efficiency. Sustainability, 15(7), 6123. https://doi.org/10.3390/su15076123

Junaidi, A., & Susanto, H. (2021). Supply chain risk management in the Indonesian palm oil industry: Focus on raw material procurement. International Journal of Supply Chain Management, 10(2), 145-156. https://doi.org/10.59160/ijscm.v10i2.3456

Kamaruddin, N., & Abdullah, L. (2019). Profitability determinants in palm oil mills: A regression analysis. Journal of Oil Palm Research, 31(3), 401-412. https://doi.org/10.21894/jopr.2019.0031

Lim, C. H., & Teoh, W. S. (2024). Mediating effects of production volume on supply chain quality and financial performance in palm oil sector. Journal of Business Research, 162, 114890. https://doi.org/10.1016/j.jbusres.2023.114890

Ngatirah, N., Sushardi, S., Karo-Karo, M. A. P. S., & Putra, D. M. (2025). Analisis resiko penurunan mutu tandan buah segar asal petani sawit rakyat dalam rantai pasok menggunakan metode Risk Priority Number. Syntax Literate: Jurnal Ilmiah Indonesia, 10(3). https://doi.org/10.36418/syntax-literate.v10i3.48547

Prayatna, E., Sayekti, A. A. S., & Trismiaty. (2018). Manajemen pengadaan bahan baku (TBS) dan kapasitas terpakai PKS. Jurnal MASEPI, 3(2).

Rahman, M. S., & Hossain, M. A. (2022). Impact of external sourcing on operational efficiency in palm oil mills: A quantitative study. Resources, Conservation and Recycling, 178, 106078. https://doi.org/10.1016/j.resconrec.2021.10607

Renta. (2015). Analisis optimalisasi pengadaan tandan buah segar (TBS) sebagai bahan baku produksi crude palm oil (CPO) dan palm kernel (PK) di PMKS Sei Kandang PT. Asiatic Persada-AMS Group. Jurnal MIX, 5(3), 347-367.

Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2018). Fundamentals of corporate finance (12th ed.). McGraw-Hill Education.

Sari, N. P., & Purnomo, D. (2020). Smallholder farmers' role in palm oil supply chain: Quality and quantity challenges. Journal of Rural Studies, 78, 456-467. https://doi.org/10.1016/j.jrurstud.2020.06.012

Setiawan, A. A., & Hadi, P. U. (2021). Economies of scale and cost efficiency in palm oil processing plants in Indonesia. Agricultural Economics Review, 22(1), 78-92. https://doi.org/10.22004/ag.econ.301234

Wahyudi, R., & Susilowati, I. (2019). Oil extraction rate optimization in palm oil mills: Factors influencing efficiency. Journal of Oil Palm Research, 31(1), 89-100. https://doi.org/10.21894/jopr.2019.001

Widadie, F., Djamaludin, M., & Rosyidi, M. I. (2021). The role of information asymmetry and opportunistic behavior on partnership performance in the broiler industry. Journal of Agribusiness and Rural Development, 11(1), 1-10.

Yusoff, S., & Hansen, S. B. (2022). Palm oil industry transformation in Southeast Asia: Economic and environmental perspectives. Global Environmental Change, 75, 102567. https://doi.org/10.1016/j.gloenvcha.2022.102567