FEASIBILITY STUDY OF DIVERSIFICATION INTO NATURAL EXTRACT AND DEVELOPMENT OF OVER-THE-COUNTER PRODUCTS AT PT. XYZ

• Main Author: Sagirswara, Kemal
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/84018
• Institution: Institut Teknologi Bandung

PT. XYZ, a state-owned pharmaceutical company instructed by the government to diversify into natural extract products and develop their existing over-the-counter especially herbal products by using their natural extract as the raw materials. This feasibility study is needed to determine whether the plan would be beneficial for PT. XYZ. The analysis on this feasibility study consists of two major parts, namely market and financial analysis. For market analysis, the writer uses Porter’s Five Forces, SWOT, PESTLE, TAM SAM SOM and marketing mix (4Ps). For the Financial analysis, the writer used Capital Budgeting Cash Flow, including calculation Weighted Average Cost of Capital (WACC) and Free Cash Flow to the Firm (FCFF) and Capital Budgeting Techniques, including Net Present Value, Internal Rate of Return, Payback Period, Discounted Payback Period and Profitability Index. The research for the global market indicates a high increase in the CAGR of herbal products with the value of 18.30%, with Asia having the highest market revenue predicted in 2024 (33.39 billion USD) as well as the prediction in 2029 (50.51 billion USD). PT. XYZ could have opportunities in building relationships with businesses as well as the government which could expand their business in relation to this project. Moreover, as a part of state-owned company, PT. XYZ has their own share of a specific market. Based on the calculations of the financial analysis, this project generates revenue thus should be accepted by PT. XYZ, even though the present value of investments only recovered at the end of the 8th year. Natural extract products serve as raw materials for other end products, meaning the process of extracting natural resources could even further develop into other industries, which means opening more opportunities in the future regardless.