FEASIBILITY STUDY OF CEMENT PLANT PRODUCTION FACILITY UPGRADE TO SUPPORT EXPORT BUSINESS CASE STUDY AT PT PEMBANGUNAN INDONESIA

• Main Author: Aulia Amirudin, Nurul
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/84048
• Institution: Institut Teknologi Bandung

Competition on the Indonesian cement market has been more aggressive as new cement companies have been emerging since 2013 and currently the market can be categorized as an excess of supply. Domestic cement industry's plant utilization dropped to between 50 - 60 percent accordingly. To address domestic market's oversupply situation, this project feasibility study examines the potential upgrade of PT Pembangunan Indonesia's facility to facilitate the export cement to the United States of America. In this research, business background is comprehensively assessed by the PESTEL, Five Porter, and SWOT analysis framework. The quantitative research methodology is applied using capital budgeting technique, sensitivity and Monte Carlo analysis. The project includes significant investment and operational expenditures, such as the extension of the jetty and the construction of new production facilities. In summary, the project is economically feasible and potentially can improve PT PI's financial performance in the future. The study result shows positive NPV 898 Bio IDR, higher IRR 16.16%, acceptable discounted Payback Period 13.2 years, good Profitability Index 1.64. According to Sensitivity analysis, cement price is become dominant factor which impact to project profitability. The same conclusion also coming from Monte Carlo analysis through 10.000 time random generation of input variable, this project has positive NPV probability 86.15%, and the probability of IRR more than WACC is 87.93%.