ANALYSIS OF INVESTMENT FOR LIVESTOCK WASTE PROCESSING INTO RENEWABLE ENERGY BIOGAS AT PT. ULTRAJAYA MILK INDUSTRY TBK & TRADING CO.

• Main Author: Noverawati, Herlina
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/49357
• Institution: Institut Teknologi Bandung

Sustainability is now a well-established feature on many companies' agendas and is beginning to be understood more than just growth to value creation. Strategic initiatives driven by sustainability such as increasing energy efficiency through the use of renewable energy sources have the potential to drive competitive advantage, innovation and revenue growth. This is closely related to the concept of a circular economy which has recently become the main focus in the industrial world. Circular economy itself is an economic concept that aims to maximize the use of materials for the production process, namely waste. The main concept is to have a new perspective on the waste produced, which is no longer something that must be disposed of and not used that results in costs, but becomes something that can be reused and redesigned not only to increase the value of the waste but also to provide added value towards the main product. Apart from the increasing demand for milk production, the dairy industry is currently facing many obstacles, one of which is related to waste management and energy use. Energy is one of the important basic needs in the production process which currently needs to continue to increase along with the national economic growth marked by, among others, the development of the industrial sector and increasing population. Providing sufficient energy supply to meet increasing demand and to sustain economic development is a big challenge. Conventional energy resources can no longer be considered a long-term solution. As an island nation, Indonesia is also more vulnerable to the effects of climate change and global warming. At present the Government is no longer subsidizing petroleum for industrial consumption. This is one of the efforts in the success of the government's program to develop sustainable finance, especially for clean energy and renewable energy along with Indonesia's challenges in achieving carbon emission reduction targets. PT ULTJ is the largest UHT milk producer in Indonesia with a market share of more than 40%, as a company committed to always providing the highest quality and natural products, and oriented towards consumers, customers, employees, and society, sustainability is one of the greatest values Companies and important components in the inheritance that want to leave. In addition, being vigilant and responsive is one part of the Company's strategy in its efforts to maintain market share, especially in 2 changing trends, especially consumer behavior and regulatory changes. The new trend in consumer behavior is an opportunity for companies to expand and strengthen markets, the rapid rate of change in society is one of the triggers for changes in people's consumption habits, in addition to being increasingly aware of the health of developing trends is the trend of environmental impacts of products offered by companies, these two things become very important roles in brand recognition by consumers when making purchasing decisions. This research aims to find the right strategy for the Company to continue to maintain and grow by conducting internal and external analysis to find its competitive advantage in an attractive industry. In conducting this research, the authors obtained primary data from parties involved in the processing of livestock waste into renewable energy and also conducted interviews and discussions with management. The author uses secondary data from journals, books, internet, and other data that support this research. Based on the grand matrix strategy, PT ULTJ is in quadrant I. In this quadrant, the Company is in a strong competitive position in the rapid growth of the UHT milk market in Indonesia, the strategy that company can undertake is to carry out vertical integration with the aim of energy cost efficiency to increase their competitive advantage in an attractive industry, namely through the development of processing livestock waste into renewable energy in the form of biogas. Based on the results of the project investment analysis, the NPV for this project is IDR 5.5 billion with an IRR of 20% or above WACC of 12.08%, and an NPV for equity of IDR 2.6 billion with an IRR of 31.8% which is also above the WACC. The results of the calculation of the payback period from the project and equity are estimated to be 4.3 years and 3.4 years or faster than the 10-year project period. This shows that the project is acceptable. Investment in sustainability in the form of technology to reduce methane gas from livestock waste does not only provide economic benefits for the company, such as being able to build brand, strong sector leadership, strong customer relations and, most importantly, benefit to cost efficiency that will have an impact on the "bottom line "in the Company's Income Statement, but can also assist the government in realizing energy security for sustainable development. Thus the reduction in methane gas production from each livestock means saving energy that is wasted and then used as additional energy for livestock production itself so that it can increase livestock productivity.