INVESTMENT FEASIBILITY PLANTATION AND ... - seabc.unsri…seabc.unsri.ac.id/seabc2017/2016/071_SEABC_Azwardi.pdf · [email protected]) Andy Mulyana2) Riswani3) ... certain

Proceeding 2nd Sriwijaya, Economics, Accounting, and Business Conference 2016

ISBN 979-587-627-9 766

INVESTMENT FEASIBILITY PLANTATION AND OPPORTUNITIES IN

PALM OIL PROCESSING INDUSTRY IN MUARA ENIM DISTRICT

Azwardi1)

[email protected])

Andy Mulyana2)

Riswani3)

Feriadi4)

1)Economic Faculty of University Sriwijaya

2) 3) 4)Agriculture Faculty of University Sriwijaya and PDD AKN Banyuasin

Abstract

The purpose of research conducted to determine the feasibility of investment in palm

oil plantations and palm oil downstream processed product opportunities. Investment

feasibility palm plantations cover the technical aspects, production aspects, market

aspects, farmer institutional aspects and financial palm plantation business aspects.

However, palm oil downstream commodities cover products derived from palm oil.

Data used including primary and secondary data. Secondary data obtained from the

relevant agencies, such as BPS and plantation department. Besides, primary data is

obtained from observation and focus group discussions with farmers and rubber

trader. Methods used include IRR, NPV and B/C ratio. Based on the research results

feasibility of investment in palm oil plantations from geographical aspect tend to

feasible in all regions of Muara Enim to cultivate palm trees, but the centre area of the

plantation in Muara Enim located in the Rambang Dangku, Gunung Megang,

Rambang, Muara Enim, and Lubai. Average monthly crude palm oil production in all

districts of Muara Enim is 1.69 tons per hectare and annual productivity reaches

33,917.8 tons. Average productivity of local palm oil plantation is 3.38 tons per

hectare. Old palm trees only produce 77 kg per hectare a month and average monthly

production from local plantation is 1.72 tons. Palm oil marketing aspect uses only two

marketing channels. First channel is preferred by farmers consisting 80% of palm

farmers. A group of farmers who choose this channel are generally associated with the

National Plantation company (PTPN), and sales system coordinated by the group

before being taken to a palm mill. In the second channel is generally chosen by a

group of independent farmers. From the measurement of financial feasibility of palm

oil farm by using four eligibility criteria showing whether the farm is feasible to be

developed with the B / C of 1.16 (> 1)which means any costs incurred by Rp.1 will

generate profits of Rp.1,16. Increasing the value added of natural palm oil in this area

can be done by encouraging the growth of the downstream palm industry such as

palm oil, cooking oil, biodiesel, margarine, and so forth. Palm agro-industry will also

increase local employment and promote economic growth in the region.

Keywords:Palm oil, Investment Feasibility, Downstream products


ISBN 979-587-627-9 767

BACKGROUND

The area of plantation in Muara Enim is 242,155 ha or 32.36% of the total

area of Muara Enim. Commodity plantations in Muara Enim spread over 20 districts

with the some major area which rank as follows; Rambang, Gunung Megang, Tanjung

Agung, and Lawang Kidul.

Table 1. Total Oil Palm Plantation According to the District in Muara Enim

N

o District 2011 2012 2013 2014 2015 2016

1 Semende Darat Laut 0 0 0 0 0 0

2 Semende Darat Ulu 0 0 0 0 0 0

3 Semende Darat

Tengah 0 0 0 0 0 0

4 Tanjung Agung 1.140 1.140 1.140 1.140 1.140 1.140

5 Rambang 50.880 50.260 50.260 50.260 50.260 50.260

6 Lubai 60.660 60.560 28.839 28.839 28.839 28.839

7 Lawang Kidul 4.240 4.240 4.240 4.240 4.240 4.240

8 Muara Enim 49.530 49.460 49.460 49.460 49.460 49.460

9 Ujan Mas 5.080 4.960 4.960 4.960 4.960 4.960

10 Gunung Megang 72.160 76.480 64.640 64.640 64.640 64.640

11 Benakat 1.500 1.500 1.500 1.500 1.500 1.500

12 Rambang Dangku 98.500 96.420 96.420 96.420 96.420 96.420

13 Gelumbang 22.340 20.440 20.440 20.440 20.440 20.440

14 Lembak 560 560 300 300 300 300

15 Sungai Rotan 220 540 540 540 540 540

16 Muara Bellida 22.500 22.460 22.460 22.460 22.460 22.460

17 Kelekar 2.520 2.400 2.400 2.400 2.400 2.400

18 Belimbing 0 0 11.840 11.840 11.840 11.840

19 Lubai Ulu 0 0 260 260 260 260

20 Belide Darat 0 0 21.721 31.721 31.721 31.721

Total 391.83

0

391.42

0

381.42

0

391.42

0

391.42

0

391.42

0

Sourced by: Statistics Plantation in Muara Enim, 2016


ISBN 979-587-627-9 768

Palm oil has become the flagship commodity of Muara Enim. Using Citra

Landsat 8 ETM+ with path/row 124/062 acquired in June 26th, 2016; 124/063

acquired in june 12th, 2016; 125/062 acquired in June 6th, 2016; 125/063 acquired in

August 6th, 2016 and palm oil plants in Muara Enim spreads over 9 districts with the

biggest three districts are Lubai, followed by Tanjung Agung, dan Kecamatan

Benakat. However, based on statistics plantation in 2016, palm oil plantation spreads

over 17 districts and districts with plantation area greater than 10,000 ha spread over

9 districts as mentioned by result obtained by Citra Landsat 8+.

A. Introduction

Internal Rate of Return is the discount rate that equates the present value of

the cash inflows and investment value of a business, in other words IRR is the

discount rate that produced the NPV = 0. If the capital cost of a business is greater

than the IRR is the discount rate which generates NPV = 0. If the capital cost of a

business is greater than IRR, the NPV becomes negative, so that the business is not

feasible, the higher the IRR compared to the cost of capital, the better the business to

have. Conversely, if the IRR is less than the cost of capital, the project will not be

taken. So the maximum capital costs which may be incurred equals to IRR.

Net B/C is the ratio between the sums of PV positive net benefit with the

sums of PV negative net benefit. The positive present value number is the numerator

and the number of negative present value is the denominator.

Net B/C shows an overview how many times the benefits obtained from the

cost incurred. If the net B/C > 1, then the project or business idea to be established is

feasible. Vice versa, if the net B/C < 1, then the project or business idea to be

established is not feasible. Net B/C ratio is an additional net benefit of acceptable

projects from every 1 unit amount spent.

Break Even Point is the point at which an activity is not gaining money, but

it also is not losing money. Break Even Point or BEP may imply an analysis to

determine and find the number of goods or services to be sold to consumers at a

certain price to cover the costs incurred as well as the benefit / profit.


ISBN 979-587-627-9 769

BEP means a situation in which the company's operations does not earn a

profit and does not suffer a loss (income assessed using the total cost). BEP analysis is

not solely to determine the state of the company reached the BEP point, but the

analysis of BEP is able to provide information to lending companies on various levels

of sales volume, as well as its relationship with the possibility of obtaining profits

according to the level of sales concerned.

METHODOLOGY

In determining the economic feasibility, we are using Internal Rate of Return

(IRR), Benefit Cost Ratio (B / C ratio) and Break Even Point.

A. Intenal rate of Return

IRR can be counted manually as follows:

∑

( )

Where: t is the year of investment projects

n is the life of the investment project

Ct is net cash flow in year t

C0 is the initial capital investment in year 0

B. B/C Ratio

Formula Net B / C ratio is as follows:

∑

( )

∑ ( ))

⁄

Bt is Benefit at year t

Ct is cost at year t

i is Discount Factor

t is the year of investment projects


ISBN 979-587-627-9 770

Indicators NET B/C Ratio is:

If the Net B/C > 1, then the project is feasible to be implemented

If the Net B/C < 1, then the project is not feasible to be implemented

C. Break Even Point

Formula BEP is as follows:

Keterangan :

BEP is Break Even Point

FC is Fixed Cost

VC is Variable Cost

P is Price per unit

S is Sales Volume

RESULTS

Investment Feasibility of Palm Oil Plantation

A. Technical Aspect

Geographically, palm oil plantation is located on areas which meet the ideal

requirement for palm oil trees to grow. These areas are located on Rambang Dangku,

Gunung Megang, Rambang, Muara Enim and Lubai. Generally, palm oil plantation is

owned by big companies and their associates. However, due to the new oil palm

plantation companies and establishment of CPO, independent local farmers start to

open their palm oil plantation.

In 2012, total area for palm oil plantations was 25,107 ha. Palm oil

plantations use the farmers’ idle spaces which separated in tiny spaces. Plantation

crops usually sold in the road side waiting for buyers to came and buy or direct selling

to factories. But, palm oil crops are only able to sustain for 3 days after harvesting and

the price will decrease after that time period.Little knowledge on palm oil plantation

and the fluctuation on selling prices affect the pattern on palm oil cultivation.


ISBN 979-587-627-9 771

Palm oil can grow on the soil consist of Podsolic, Latosol, hidromorfic Grey,

Alluvial or Regosol, sapric peat soils, coastal plains and estuaries. However, it is best

grown on Podsolic soil. Optimal acidity level (pH) is 5.0 – 5.5. To achieve this level

of acidity, it required for peat areas to be given Dolomite fertilizer or Kieserite. The

slope of the palm oil plantation area is less than 15 °. If the slope of the land exceeds

15 ° , the land is required to do land conservation by forming, terracing, hooves, and

trench hillside.

B. Production Aspect

Productivity level can be optimized by using high-quality seeds and use the

ideal planting techniques especially in the use of fertilizer. Based on survey, farmers

has used high-quality seed and yet to use the ideal planting techniques. This results in

lower productivity level.

Monthly average productivity reaches 1.69 tons/ha and total production

reaches 33,917 tons. In Benakat, total production reaches 120 tons from total area of

77 ha.

In 2012, based on data from Plantation Officer, the productivity level is

421,040 tons and based on study, the productivity level is 421,286 tons and average

productivity of local farmers is 3.3 tons / ha and old trees only produce 77 kgs on

average. Hence, average monthly total production of palm oil crops is 1.72 tons.

Other factors causing low productivity of palm oil crop are fake seeds,

improper use of fertilizer, untreated weed, early harvest when crops are not yet ready

and low rain capacity when trees need much water. Palm oil plants need high level of

rainfall around 1,500-4,000 mm per year.

In some districts, the productivity reaches more than 20 tons/ha such as 22

tons in Gelumbang and Abab, 21 tons in Ujan Mas, Benakat, Penukal Utara, Tanah

Abang and Lubai.

C. Marketing Aspect

Palm oil crops are distributed from farmers to consumers or traders using

marketing system approach, marketing utility and marketing function. Marketing


ISBN 979-587-627-9 772

flows only exists when there is marketing institution forming marketing channel.

Marketing channel is needed to give information regarding prices among ma rketing

institutions.

In Muara Enim, there are 2 marketing channels that commonly used by

farmers:

Channel 1: 80% of farmers

Sellers are coordinated by groups Price : Rp. 1500/kg (paid on beginning

of the month)

Channel 2: 20% of farmers

Proice: Rp. 1,100/ kg (cash) Price: Rp. 1,500/ kg

Diagram 1. Marketing Channels Palm Oil Crops in Muara Enim

From above diagram, the marketing channels of Palm oil crops in Muara

Enim are considered to be simple. Channel 1 is the famous one among farmers. 80%

of farmers choose this channel. Farmers who choose this channel usually are

associated with the factories and selling system was coordinated by groups before

selling to the factories. Channel 2 usually chooses by independent farmers. There are

some reasons expressed by farmers while choosing between two marketing channels:

Reasons for choosing channel 1 are emotional binding with the groups

and factories and closer to the farmers’ field and hence reduce

transportation costs. However, the payment system is only once in a

month (treated like salary);

Reasons for choosing channel 2 are no transportation cost because

traders take the crops directly from farmers’ field and the payment

system is cash. Although, farmers receive lower selling price.

Farmers

Association

(KUD)

Palm oil Factories

(PKS) Farmers

Farmers

Pedagang Pengumpul

(Tengkulak ) Perusahaan

CPO (PT PN)

Traders / Agencies Big Companies

CPO (PT PN)


ISBN 979-587-627-9 773

The transportation costs paid by farmer in channel 1 is Rp. 105/kg and

group’s administration fee is Rp. 20/kg, the net price received by farmers in channel 1

is Rp. 1,375/kg. This price is still higher than those using channel 2. Total average

monthly sales volume using channel 1 is 70 tons/village.

There is a price fluctuation received by the farmers around Rp 1,100 – Rp.

1,600/ kg. This is because the palm oil crops are from old palm oil plants which has

exceed the productive age. These crops are not able to follow the standardize price of

palm oil crops. Standardize price is based on the crops harvesting from productive

plants. This condition remains unknown among farmers and hence farmers are still

blaming factories for paying lower than the standardize price.

In the downstream industry, a product derived from palm oil is marketed in

the form of CPO processed by palm oil mills. The majority of this product is used to

meet export demands. There are 3 units of palm oil mills recorded in the Department

of Industry in South Sumatra Province (2015) operating in Muara Enim with the final

product as Crude Palm Oil (CPO) and Palm Kernet Oil (PKO). The main market of

CPO is an international market, with export destinations are varied from China,

Singapore, Malaysia, and so on. Selling prices of CPO in the international market is

on average of five times greater than the selling price of palm oil crops product. In

2015 recorded CPO price in the international market amounting to Rp. 6,700 / kg.

Based on production data, the number of CPO production in South Sumatra,

including contributions from Muara Enim, is quite large, but the export value is not in

line with production quantities produced. CPO export value of South Sumatra

amounted Rp.1,16 trillion compared to total CPO export value of Indonesia amounted

Rp.224,51 trillion in 2014 was a small contribution. This is because factories in South

Sumatra Province sold their products to other provinces, which then sold them

overseas in the same form (CPO and PKO) or derivative industries. Export markets

the majority in Asian countries are namely India (40%), China (16%), Malaysia

(16%), Bangladesh (7%), and the rest (21%) to European countries through the Port

of Amsterdam in the Netherlands.

From the development of the market and profit analysis of the added value

obtained in the downstream industry, the orientation of the market for palm oil


ISBN 979-587-627-9 774

commodity indeed should be directed to the development of downstream industries

rather than just relying on primary products. The added value obtained and more labor

absorption through the development of downstream industries is expected to provide

great benefits. This development is to be done gradually and is unnecessarily to turn

all crops into derivative products. Surplus production can still be exported with

comparative advantage possessed, and in addition it is estimated the production

capacity of downstream industries in the province of South Sumatra cannot

accommodate the total supply of raw materials in the short and medium term.

There are several reasons for the development of downstream palm oil

products in Muara Enim, namely:

1. Prices of palm oil crops in the form of raw materials and primary products are

relatively cheaper and volatile.

2. There is the opportunity to gain added value from commodity production to

produce downstream products.

3. The labor working in the agricultural sector is the second largest (19.21

percent), meaning the welfare of society is strongly influenced by the

downstream sub-sector of plantation products

4. Adding investment opportunities and export market through product

diversification

5. Increasing / stabilizing the foreign exchange through export diversification

6. Saving foreign exchange by producing the substitution of imported products

7. Exploiting the potential demand for upper-middle income

8. Encouraging and increasing in domestic and foreign capital investment

9. Stimulating economic growth

10. Increasing the income of farmers and traders / processors

11. Providing employment

12. Responding to negative campaigning that attacking agricultural commodity of

Indonesia

The downstream palm oil industry is also important to develop Muara Enim.

This is because this area is a center of oil production in the South Sumatra and there is

a potential sea port national and international scale to be built in the province of South

Sumatra. The presence of this port in the future will facilitate the export of this

commodity, previously, CPO export normally have to go through another province

that has a harbor. And thus by extending the distribution path to other provinces is

also means by increasing marketing costs, which of course would reduce exporters'

earnings.


ISBN 979-587-627-9 775

D. Farmer Institutional Aspects

The importance of institutional aspect goes beyond the role of technology

and the existence of resources. Previously, the existence of resources (resource

endowment) is considered to be the most important factor for growth. And

Technology is known as an important factor in improving the effectiveness and

efficiency of resources relation to productivity. However, nowadays, it is recognized

that the institutional role is the most important factor as aligning in the process of

production, distribution and consumption. Institutional factors are recognized as the

most important factor in driving economic growth, beyond technological factors and

the existence of resources because there is no means of resources and advanced of

technological without followed by advanced institutional.

Institutional capacity building and organizational behavior must be supported

by a social consciousness through replanting values. That means the institutional

development together with contractual agreement and the organization are an

important factor in making development policy. Institutional development needs to be

aligned with local values through changing the development paradigm based

participation (participatory-based development).

The existence POKTAN and GAPOKTAN and Villager Cooperation are

able to strengthen farmers who facing the enterprise as the case in the PIR-SUS and

PIR-BUN. However, due to the limited ability of empowerment of farmers, farmers

have less bargaining power in the FFB price determination. Farmer institutions should

promote the bargaining position of farmers, because in the calculation of crops no

farmers cost component but only the price index taken from component average price

of CPO domestic weighted with CPO exports, crude palm oil (CPO), the average

price of the core palm oil and weighted with export prices, as well as the yield of palm

kernel oil. That means the company gained more advantaged in price than farmers.

When the price of CPO exports fell, the price of crops also definitely fell. Although in

practice, the production costs borne by farmers continued to increase. This is where

the oil palm farmers often suffered losses. Based on observations, the need for a

solution that CPO mill was owned by farmers association (KUD), while the

processing industry cooking oil or biodiesel and palm oil as derivative products was

owned by companies such as PT PN VII is unfavorable if the only business in the


ISBN 979-587-627-9 776

upstream sector associated with the high land estates and gardens costs and problems

in the rejuvenation (replanting).

Palm Oil Plantation Financial Feasibility

In this study, it is assumed that: there is an own capital financing in the

construction and operation of palm oil; land for oil palm cultivation is also readily

available, so that farmers does not count the cost of the purchase or lease of land. It

takes 3-4 years to cultivate and maintain palm oil plants properly until they are ready

to harvest. Therefore, the development of oil palm plantations requires long-term

investment with a grace period of 3 years. Components of palm plantation investment

cost as other plantation crops consists of pre-operating costs, land clearing, planting

and maintenance of immature plantations.

Annual operating costs are calculated to facilitate the proponents and

interested third parties to assess the financial outlook for palm oil plantations in the

future. In calculating annual operating costs assumptions were used: (1) the prices of

raw and auxiliary materials essentially will not change significantly; (2) The same

thing applies to direct wages, salaries, and overhead costs; (3) the selling price of the

processed rubber will not change significantly; and (4) inflation in the country will

affect the selling price and direct costs commensurately.

Table 3. Criteria Feasibility per hectare Oil Palm Plantation

No Components Value Characteristics

1 NPV (df 15%) Rp18,313,629 Feasible

2 IRR 20.98% Feasible

3 Gross B/C 1.33 Feasible

4 Net B/C 1.16 Feasible


ISBN 979-587-627-9 777

Table 2. Analysis of Financial feasibility of Palm Oil Plantation For Period of Investment Starting From Year 0 to year 12th

No

Costs And

Benefits

Components

Year

0 1 2 3 4 5 6 7 8 9 10 11 12

I Investment Cost

A. Plants 26.680.500 3.062.345 2.455.475 2.875.400 3.655.300 0 0 0 0 0 0 0 0

1. Labors 15.180.000 1.560.000 900.000 1.080.000 540.000

2. Materials 8.575.000 1.223.950 1.332.250 1.534.000 1.360.500

3. Equipments 500.000 1.422.500

4. Contingencies 2.425.500 278.395 223.225 261.400 332.300

Total Investment

Costs 3.755.300 0 0 0 0

B. Management

Fee 1.334.025 153.177 122.774 143.770 187.765

C. Insurance

(1,5%) 400.208 45.935 36.832 43.131 56.330

II

Net Investment

Cost 28.414.733 3.261.397 2.615.081 3.062.301 3.892.895

III Operational Cost 0 0 0 0 0 7.907.250 7.907.250 7.932.450 7.932.450 7.932.450 7.932.450 7.932.450 7.932.450

1. Labors 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000

2. Materials 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250

3. Equipments 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000

4. Management

Fee 252.000 252.000 378.000 378.000 403.200 403.200 403.200 403.200

IV Total Cost 28.414.733 3.261.397 2.615.081 3.062.301 3.999.395 11.906.645 7.907.250 7.907.250 7.907.250 7.932.450 7.932.450 7.932.450 7.932.450

V Inflows 0 0 0 0 13.440.000 16.800.000 16.800.000 25.200.000 25.200.000 26.880.000 26.880.000 26.880.000 26.880.000

Product (TBS) 0 0 0 0 9.600 12.000 12.000 12.000 12.000 19.200 19.200 19.200 19.200

Price (Rp/Kg) 0 0 0 0 1.400 1.400 1.400 1.400 1.400 1.400 1.400 1.400 1.400

VI Revenues

-

28.414.733 3.261.397 2.615.081 3.062.301 9.440.606 4.893.356 8.892.750 17.292.750 17.292.750 18.947.550 18.947.550 18.947.550 18.947.550

df = 15% 1 0,8696 0,7561 0,6575 0,5718 0,4972 0,4323 0,3759 0,3269 0,2843 0,2472 0,2149 0,1869

PVB 5.397.697 2.432.863 3.844.581 9.473.613 8.237.925 7.640.974 6.644.325 5.777.674 5.024.064

PVC 28.414.733 2.835.998 1.977.377 2.013.513 2.286.667 5.919.707 3.418.522 2.972.628 2.584.894 2.254.897 2.158.528 1.705.026 1.482.632

PVR 7.684.363,62 8.352.569,15 7.263.103,61 9.473.613,41 8.237.924,70 7.640.973,64 6.644.324,90 5.777.673,83 5.024.064,20


ISBN 979-587-627-9 778

Table 3. Analysis of Financial feasibility of Palm Oil Plantation for Period of Investment Starting from Year 13th

to year 25th

No

Costs And

Benefits

Components

Year

13 14 15 16 17 18 19 20 21 22 23 24 25

I

Investment

Cost 0 0 0 0 0 0 0 0 0 0 0 0 0

A. Plants

1. Labors

2. Materials

3.

Equipments

4.

Contingencies

Total

Investment

Costs

B.

Management

Fee

C. Insurance

(1,5%)

II

Net

Investment

Cost

III

Operational

Cost 7.907.250 7.907.250 7.907.250 7.907.250 7.907.250 7.781.250 7.781.250 7.781.250 7.730.850 7.529.250 7.529.250 7.529.250 7.529.250

1. Labors 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000 6.000.000

2. Materials 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250 1.429.250

3.

Equipments 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000

4.

Management

Fee 403.200 378.000 378.000 378.000 378.000 378.000 378.000 252.000 252.000 252.000 201.600 0 0

IV Total Cost 7.932.450 8.707.250 7.907.250 7.907.250 7.907.250 7.907.250 7.907.250 8.581.250 7.781.250 7.781.250 7.730.850 7.529.250 7.529.250

V Inflows 26.880.000 25.200.000 25.200.000 25.200.000 25.200.000 25.200.000 16.800.000 16.800.000 16.800.000 16.800.000 13.440.000 13.440.000 13.440.000

Product

(TBS) 19.200 18.000 18.000 18.000 18.000 18.000 18.000 12.000 12.000 12.000 9.600 9.600 9.600

Price (Rp/Kg) 1.400 1.400 1.400 1.400 1.400 1.400 1.400 1.400 1.400 1.400 1.400 1.400 1.400

VI Revenues 18.947.550 18.947.550 16.492.750 17.292.750 17.292.750 17.292.750 17.292.750 8.218.750 9.018.750 9.018.750 5.709.150 5.709.150 5.709.150

df = 15% 0,1625 0,1413 0,1229 0,1069 0,0929 0,0808 0,0703 0,0611 0,0531 0,0462 0,0402 0,0349 0,0304

PVB 4.368.751 3.798.914 3.096.941 2.692.992 2.341.732 2.036.289 1.770.686 1.026.485 892.595 776.170 539.944 469.517 408.275

PVC 1.289.245 1.121.083 1.070.073 845.006 734.788 638.946 555.605 524.317 413.423 359.498 310.582 263.029 228.721

PVR 4.368.751,48 3.798.914,33 3.096.941,03 2.692.992,19 2.341.732,30 2.036.289,00 1.770.686,08 1.026.484,70 892.595,37 776.169,89 539.944,27 469.516,76 408.275,44


ISBN 979-587-627-9 779

a. Palm Oil Downstream Opportunities

The value added product of natural resources in Muara Enim can be increased by

encouraging the growth of the downstream palm industry such as palm oil, cooking oil,

biodiesel, margarine, and so forth. Palm agro-industry will also increase local employment

and promote economic growth in the region.

Table 4. Potential Agroindustri Downstream Oil Palm Products

Year

Area

(Ha)

CPO

( ton)

CPO

Consumtion

(Ton)

Surplus

CPO

(Ton)

Potential

Cooking

Oil (Ton)

Cooking

Oil

Consumpt

ion (Ton)

Cooking

Oil

Surplus

(Ton)

Choices of

downstream

industries

2010 106,885 1,930,880 1,413 1,929,467 1,448,160 1,931 1,446,229 Cooking Oil

Biodisel

Fatty Acid

butter/

Margarin

Cosmetics

Soap

Salad Oil

2011 220,256 1,197,257 1,538 1,195,719 897,943 1,197 896,745

2012 94,781 1,702,654 1,564 1,701,090 1,276,991 1,703 1,275,288

2013 64,942 1,645,916 1,591 1,644,325 1,234,437 1,646 1,232,791

2014 45,905 1,745,916 1,616 1,744,300 1,309,437 1,746 1,307,691

2015* 22,810 391,420 1,421 389,999 293,565 391 293,174

2016* 22,810 397,885 1,444 396,441 298,414 398 298,016

Sourced by: Plantation Statistics and Other Sources, 2016 (Processed)

Note: PALI is excluded from Muara Enim

The potential of palm oil products are produced in Muara Enim reaches 1,745,916

tons. Demand for cooking oil per capita is 0.227 Liter per month, then the need for cooking

oil for Muara Enim residents is 1,746 tons per year. There is assumption that CPO is

processed as 75 percent into cooking oil that needed for 1,616 tons of CPO, there is a surplus

of 1,744,325 tons of CPO. For the surplus CPO, there is investment opportunities agro-

industry of palm oil, to make CPO (Crude Palm Oil) derived products, such as, bio diesel,

palm oil (cooking oil, salad oil, margarine, shortening) derivative of PFAD among other

things, soaps, fatty acids (fatty acid), a surfactant (emulsifier) and cosmetics.

SUMMARY

The research results show palm plantation investment depends on feasibility of

geographical aspects, production, markets, farmer institutional and financial. Geographically,

Muara Enim is located in areas that have the geographical factors that ideal to grow on oil

palm plantations. Those areas that suitable for palm oil plantation are Rambang Dangku,

Gunung Megang, Rambang, Muara Enim, and Lubai. Oil palm cultivation is relatively new to

most of farmers in Muara Enim except a few locations as PIR-SUS Palm Oil. Independent


ISBN 979-587-627-9 780

local farmers is a relatively new community that just began to enter the palm oil plantation

for a few years back when there is the booming of land clearing for oil palm plantation

companies and the establishment of the CPO mill. The monthly average productivity of palm

oil reached 1.69 tonnes per ha and a production rate reached 33917.8 tons. The average

productivity of oil palm plantation plants produce as much as 3.38 tons per hectare, and the

old plant produces an average of only 77 kg per hectare per month, thus the average

production of palm oil as much as 1.72 tonnes of FFB per month. In marketing sector of palm

oil crops in Muara Enim, there are two major marketing channels. Channel I is the channel

most preferred by farmers (80%). A group of farmers who choose this channel is generally

former plasma farmer from the company (PTPN), and sales system coordinated by the group

before being taken to a palm oil mill. In the second channel is generally chosen by a group of

independent local farmers. From the measurement of financial feasibility of Palm oil

plantation by using four eligibility criteria shows that plantation is feasible to be developed

with the B / C of 1.16 (> 1) means any costs incurred by Rp.1 will generate profits of Rp.1,16.

The value added product of natural resources in Muara Enim can be increased by

encouraging the growth of the downstream palm industry such as palm oil, cooking oil,

biodiesel, margarine, and so forth. Palm agro-industry will also increase local employment

and promote economic growth in the region. The potential of palm oil products are produced

in Muara Enim reaches 1,745,916 tons. Demand for cooking oil per capita is 0.227 Liter per

month, then the need for cooking oil for Muara Enim residents is 1,746 tons per year. There

is assumption that CPO is processed as 75 percent into cooking oil that needed for 1,616 tons

of CPO, there is a surplus of 1,744,325 tons of CPO. For the surplus CPO, there is

investment opportunities agro-industry of palm oil, to make CPO (Crude Palm Oil) derived

products, such as, bio diesel, palm oil (cooking oil, salad oil, margarine, shortening)

derivative of PFAD among other things, soaps, fatty acids (fatty acid), a surfactant

(emulsifier) and cosmetics


ISBN 979-587-627-9 781

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INVESTMENT FEASIBILITY PLANTATION AND ... - seabc.unsri…seabc.unsri.ac.id/seabc2017/2016/071_SEABC_Azwardi.pdf · [email protected]) Andy Mulyana2) Riswani3) ... certain

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