Implementation of End-to-End Circular Economy in Dairy Farming: A Case Study of KOP SAE Pujon, Indonesia

This study was conducted at KOP SAE, Pujon District, Malang Regency, East Java Province, with the aim of identifying the application of the 5R principles (Reduce, Reuse, Recycle, Refurbish, and Renew) in the circular economy across three main sectors: the upstream sector (dairy cattle farming), the processing sector (dairy processing industry), and the downstream sector (cafe units and souvenir shops). Additionally, this study aims to explore the economic potential generated from the implementation of these principles. The respondents in this study consisted of three key informants selected purposively, namely (1) the Head of the Dairy Cattle Development and Resource Unit, (2) the Head of the Cattle Maintenance Unit, and (3) the Head of the Cafe and Souvenir Shop Unit. Data collection was conducted over a one-month period, from May 21 to June 21, 2024, using three main methods: questionnaire distribution, in-depth interviews, and documentation. The data obtained were analyzed based on the 5R principles of the circular economy to measure the level of sustainability in each sector. The research results indicate that the three sectors observed have made significant efforts to apply the 5R principles, but their benefits for the environment, society, and economy have not been fully realized. In the upstream sector (dairy cattle farming), the application of the 5R principles averaged over 51%. In the milk processing sector, the application was higher, averaging above 76%. Meanwhile, in the downstream sector (cafés and souvenir shops), the implementation rate of the 5R principles averaged over 50%. From an economic perspective, the implementation of the circular economy has produced tangible impacts. The utilization of biogas from livestock waste can generate approximately 120 3-kg LPG cylinders every year, which, when converted economically, is equivalent to IDR 2,400,000. The R/C ratio from biogas utilization reaches 1.11, indicating that this venture is profitable and economically viable. Pasteurized milk processing generates an added value of IDR 9,750/liter of raw material, with an added value ratio of 49.3%. Meanwhile, yogurt processing provides a higher added value of IDR 17,160/liter and generates a company profit of 59.27%. The profit margin from the sale of dairy products by KOP SAE reaches 20%, indicating that the company’s profitability is in a healthy category.