Economic Feasibility Case Study of Developing a Salt Production Plant

Abstract

Indonesia is a net salt importer with plans to eliminate salt import dependency through the industry’s development and collaboration with higher education institutions. Considering net present value (NPV), internal rate of return (IRR), benefit–cost ratio (B/C ratio), and return on investment (ROI), this case study analyzes the economic feasibility of developing a mini salt production plant. All the economic indices suggest that the project is feasible, specifically NPV, IRR, net B/C ratio, and ROI are IDR 5.3 billion, 42.83%, 1.61, and 395% respectively over 10 years. Thus, the project is economically feasible and can help eliminate import dependency and the higher educational institution’s outstanding contribution.

Acknowledgements

We also would like to thank anonymous reviewers for taking the time and effort necessary to review the manuscript. We sincerely appreciate all valuable comments and suggestions which helped us to improve the quality of the manuscript.

Additional information

Funding

The authors gratefully acknowledged the Universitas Trunojoyo Madura, who funded this research through the research funding scheme Penelitian Penugasan (Nr:381/UN46.4.1/PT.01.03/2021).

Notes on contributors

Makhfud Efendy

Makhfud Efendy is the salt science and technology research center director at the Universitas Trunojoyo Madura. He had researched in the salt science and technology area for more than 20 years. He has a Ph.D. in marine science from the Institute Pertanian Bogor. In the same university, He holds a B.S. and M.S. degree. Has authored several papers and a book on salt science and technology topics.

Muhammad Syarif

Muhammad Syarif is an associate professor in the Faculty of Economics and Business, Universitas Trunojoyo Madura in Indonesia. His current interest includes marketing management, Sharia marketing, and Sharia tourism topics. He has published papers in the Journal of Environmental Management and Tourism, Heliyon, WSEAS Transactions on Business and Economics, and Quality - Access to Success.

Nizar Amir

Nizar Amir has extensive experience in energy and marine technology projects and a research track record in developing a green and sustainable system, including holding several salt technology patents. Nizar also is an advisor in the Ministry of Marine Affairs and the Fisheries, Republic of Indonesia (KKP) and have worked extensively on projects from the minister office.

Rachmad Hidayat

Rachmad Hidayat is a Professor in the Department of Industrial Engineering at Universitas Trunojoyo Madura. He is also a president of Universitas Bahauddin Mudhary Madura. He teaches courses in marketing management, micro small & medium industry management, marketing engineering, and entrepreneurship & business development. His research interests include salt science and technology, manufacturing process, cognitive ergonomics, and green technology.