RAW MATERIALS ANALYSIS OF TEXTILE INDUSTRY USING THE PRINCIPAL COMPONENT ANALYSIS METHOD IN DETERMINING INVESTMENT WITH REAL OPTIONS
The textile industry has become the first contribution of the non-oil sector. Unfortunately, the supply of raw materials, can’t fulfill domestic textile industry’s demand. It forced the nation to import the raw materials. One of them is Paraxylene, a raw material that is often used to manufacture...
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| Format: | Final Project |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/47698 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | The textile industry has become the first contribution of the non-oil sector.
Unfortunately, the supply of raw materials, can’t fulfill domestic textile industry’s
demand. It forced the nation to import the raw materials. One of them is Paraxylene,
a raw material that is often used to manufacture Terephalate and PTA which are
materials for making plastics and textiles. Based on the problems that exist until
now, research needs to be done to address textile raw materials in Indonesia. This
research was conducted in three stages, namely analyzing the dominant raw
materials, predicting the main raw materials, and investing in building a factory.
The data used is data for 2016-2018 from APSyFI (Association of Indonesian Fiber
and Filament Yarn Manufacturers). The method used to analyze dominant raw
materials is Principal Component Analysis (PCA). Principal Component Analysis
will be carried out by utilizing the covariance matrix and corelation matrix, to look
for dominant raw materials and compare the results for both matrix. Furthermore,
the volume of dominant material obtained, namely Paraxylena, will be predicted for
2019 using the Time Series Analysis method. From the predictions obtained that
the need for Paraxylena increases in 2019, so the authors propose to invest in
building Paraxylena factory with a production capacity of 400,000 tons / year to
meet domestic needs. Plant construction will require a feasibility analysis, which is
carried out using the DCF method. However, the DCF method does not have a
flexibility of the market, so the project value isn’t optimal. Therefore, Real Options
Analysis will be carried out, which is a valuation method that is appropriate to the
value of the project, so that it can be built with a profitable investment strategy.
With Monte Carlo Simulation, project cash flow will be built and the project
volatility as market uncertainty. The Binomial Lattice method is one of the methods
used to calculate real options, so in the end it will be obtained the value of project
with or without option |
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