INVESTMENT PROJECT ANALYSIS OF NEW BUSINESS OPPORTUNITY (PERTASHOP) FOR CV XYZ

• Main Author: Muharamsyah Bachtiar, Sandhy
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/57327
• Institution: Institut Teknologi Bandung

The Pertashop is the program launched by Pertamina in 2019. This refers to small-scale gasoline station that distributes non-subsidized gasoline such as Pertamax and Dexlite. This program is an effort of the government to provide sustainable energy all over Indonesia country and increase the livelihood of SME companies by introducing them to the oil distribution sector. In 2020, Pertamina collaborated with various government departments, especially the Ministry of Cooperatives and SMEs (KEMENKOP UKM). This effort is to facilitate permitting and financing access for SMEs to build a Pertashop outlet. This new business opportunity of Pertashop certainly attracts many SME activists include CV XYZ, the company that was established in 2017, which started its business in the retail industry. However, due to no comprehensive feasibility analysis to justify whether this business will be profitable or not, CV XYZ still hesitate to enter this business. Therefore, this research will provide the analysis to help them to succeed in this business. This research objective is to provide financial feasibility analysis in establishing a Pertashop business. It includes a framework for selecting the potential location that matches the criteria required by Pertamina and the customer preference. The focus group discussion with BoD is conducted to obtain their concern and establishing several assumptions that will be used in the analysis. Several data that unavailable in secondary sources are obtained from the survey that participated by 618 respondents. Based on the decision-making process, Pertashop will be located in Jl. Raya Majalaya - Rancaekek and has a capacity to supply Pertamax of 3000 liters/day. The estimated capital budget based on the selected location and the Pertashop’s gold package is IDR 950,000,000 with an estimated construction period of five months. The financial feasibility consists of capital budgeting analysis by assessing investment from several factors, such as NPV, discounted PBP, PI, & IRR, and sustainability (ratio) analysis by comparing the ratio obtained from calculation with the benchmark’s ratio. In addition, sensitivity and scenario analysis were conducted to determine the variables that have a significant impact on the project NPV then analyze the worst-case and best-case scenarios that will occur based on the historical value of these variables. Finally, a Monte Carlo simulation was also conducted to determine the probability of success of this investment. The results obtained from this feasibility analysis of the investment are as follows: Net Present Value (NPV) is Rp. 908,374,655, discounted Pay Back Period is 9.09 years, Profitability Index (PI) is 1.94, and Internal Rate of Return (IRR) is 22.49 %. Moreover, several financial ratios of the project especially in profitability ratio are better than its benchmark. Based on the sensitivity analysis, four variables are determined the project's NPV value, while the scenario analysis shows that the NPV will be worth Rp. (532,221,432) in the worst-case and Rp. 2,165,965,845 in the best-case. In addition, the Monte Carlo simulation found that the probability of this business failure where the NPV value is less than zero is only 1.73%. From the results of the analysis above, it can be concluded that the Pertashop business is very prospective and profitable to run. However, some sensitive variables must be considered and controlled (if possible) to get maximum results. The researcher recommends building the Pertashop at the selected location as soon as possible to establish its existence as a pioneer and market leader in those locations.