INVESTMENT ANALYSIS OF COAL FERTILIZER PLANT USING CAPITAL BUDGETING WITH SOCIAL RETURN ON INVESTMENT APPROACH IN PT BERAU COAL

• Main Author: Hakim, Lukman
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/53555
• Institution: Institut Teknologi Bandung

PT Berau Coal is one of the largest coal mining companies in Indonesia with a concession area of 108,009 ha. PT Berau Coal is the holder of a First Generation Work Permit PKP2B permit whose license will expire in 2025. According Law No 3 about Minerals and Coal, every mining company must create downstream program for increase additional value of coal to extend its work permit. The coal downstream program launched by the government includes the manufacture of mine mouth power plants, coal gasification, improvement of coal quality, manufacture of coke, manufacture of coal briquettes and others. Investments need for these projects are generally very high and the concept is still limited to the use of coal as an energy source. Whereas coal with its organic material content, especially carbon (C) has the potential to be developed into environmentally friendly organic fertilizers and the investment required is also not large with a promising commercial value. The use of fertilizer for coal is currently being developed and has been proven to be successful in increasing farmers' crop production. Berau Regency has 121,000 ha of agricultural and plantation land and a fertilizer requirement of around 100,000 tones / year (for farmers and companies), with a supply of subsidized fertilizer only around 1000 tones / year, so the business opportunity for coal fertilizer is very large. PT Berau Coal plans to cooperate with RUH Saputra as the copyright holder for futura coal fertilizer to make a coal fertilizer plant as a form of downstream program, to meet the company's fertilizer needs for reclamation activities and finally, it is also very important that the fertilizer will also be distributed to local farmers at the same price. subsidized fertilizer so that it is expected to provide social benefits for small farmers in particular and the economic development of Berau Regency in general. The investment feasibility analysis of the coal fertilizer plant is carried out using the Capital Budgeting method by taking into account the social benefits and the value of Social Return on Investment to obtain a comprehensive picture regarding the benefits to be received by the company and the public. The assessment is carried out through 2 schemes taking into account the daily working hours and the number of workers. The results of the analysis show that the scheme with the parameters of the number of work is 16 hours, the number of workers is 14 people and a production capacity of 10240 tons is more feasible financially and socially because it has a social NPV of IDR 288,597,950,790 and an SROI index value of 59.6 which means that every 1 rupiah the company spends on fertilizer investment coal is worth 59.6 rupiah for the community. Furthermore, the sensitivity analysis shows that the achievement of production and the number of daily working hours are the most sensitive variables to the Social NPV value.