Feasibility Study Of PT. XYZ Palm Oil Plantation And Processing Plant

Abstract

The purpose of this research is to examine the factors which should be considered in establishing palm oil plantation and processing plant; it analyzes project feasibility and provides project sensitivity and scenario analysis. The study employs descriptive analysis through a literature review, content analysis, observation and interviews. The object of the research is PT. XYZ, companies engaged in the plantation and palm oil industry in Sijunjung Regency, West Sumatra Province. The feasibility criteria for the projected palm oil plantation and construction of processing plant by PT. XYZ are based on the payback period/discounted payback period, net present value, profitability index and internal rate of return. Project for new palm oil plantation are feasible depending on three conditions : base, optimistic and pessimistic conditions, in which the Net Present Value (NPV) is positive. Processing plant construction project are feasible in base and optimistic conditions, but are rejected in pessimistic conditions. Based on the results of the sensitivity analysis, it can be seen that the factor which has the greatest effect on the net present value of new palm oil plantation is the selling value of FFB (Fresh Fruit Bunch). The factors that have the greatest effect on the net present value of palm oil processing plant construction are the selling points of CPO (Crude Palm Oil) and PKO (Palm Kernel Oil).