Articles

Capital Budgeting Analysis of Broiler Farm Construction in Central Java

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Indonesia, positioned as a prominent emerging market, draws its economic strength from a diverse mix of agriculture, manufacturing, and a thriving services sector. The nation’s strategic location, coupled with abundant resources and a youthful population, forms a resilient economic foundation that has contributed to its sustained growth. One notable sector that plays a pivotal role in meeting the country’s protein needs is the poultry industry. Chicken consumption has risen to 7.41 kilograms per capita yearly, indicating a substantial 9.23% increase from 2020. Against this backdrop of economic vibrancy and shifting consumption patterns, PT.XYZ, a key player in the poultry industry, is strategically positioning itself for expansion. Recognizing the immense potential within Indonesia’s dynamic poultry sector, PT.XYZ is planning to enhance its broiler meat production capabilities through the construction of new broiler chicken farm facilities. This research endeavours to provide PT.XYZ with a comprehensive feasibility analysis for the envisioned broiler chicken farm facilities. The proposed facilities are designed to produce a significant volume, with a capacity of up to 16.8 million chickens annually, equivalent to approximately 29,3 million kilograms of chicken meat per year. The construction timeline is strategically set for two years, spanning from September 2024 to October 2026. The research findings present a compelling case for the feasibility of PT.XYZ’s ambitious broiler farm construction project. Financial indicators reveal a positive Net Present Value, an Internal Rate of Return that exceeds the Weighted Average Cost of Capital (WACC), and a Payback Period of five years, aligning with the company’s strategic plans. These results underscore the financial viability and attractiveness of the proposed expansion.

Proposed Marketing Strategy to Increase Digital Smart Poultry Market Readiness in West Java

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Coronavirus diseases (COVID-19) have been impacted to the decrease in poultry product demand in Indonesia which leads to cause oversupply and declining in this industry margin. As one of the companies that promote digital transformation in Indonesia, Indonesian ICT company develops a new subsector in its digital agricultural platform to solve the problem. This company created Minimum Viable Product (MVP) to develop its current digital platform in subsector poultry (digital smart poultry). It consisted of several features such as funding, partnership, and B2B/B2C marketplace. After planning the MVP, the problem is mainly focused on determining the market readiness for smart poultry digital platform and how to create the most suitable marketing strategy to enter the market. They also had not specified the target segment to sell the products yet. This research is aimed to explore more whether the poultry farmers need the smart poultry digital platform to solve the problem, the market readiness, and formulate the marketing strategy and implementation plan for the smart poultry digital platform that targeted on poultry farmers.
To validate the issue in the poultry industry, the authors conduct a preliminary survey by interviewing poultry farmers in West Java. Next, to gain in-depth insight into the product necessities and market readiness, the author did an environmental analysis (internal and external) as the base to formulate the SWOT-TOWS analysis. The internal analysis that has been used for this research consists of Business Model Canvas (BMC) and VRIO analysis. The author used PESTEL, Porter’s Five Forces, competitor, and consumer’s analysis for the external analysis. According to the analysis, the poultry farmers as the targeted consumers are considered ready and necessary to use the product. After formulating SWOT-TOWS based on the environment analysis, the author used QSPM analysis to determine the most suitable business and marketing strategy to be implemented. The author proposed several strategies and implementation plans that consisted of 1) Increase the smart poultry digital platform capabilities (especially in IoT to help solve the poultry farmers’ problem). Optimize digitalization for business development and marketing (SO2), 2) Optimize the service marketing (ST1), and 3) Maximize the use of integrated marketing strategy to maximize promotion (WT3).