Economic Feasibility Case Study of Developing a Salt Production Plant

• Published in: The Engineering economist Vol. 68; no. 2; pp. 99 - 121
• Main Authors: Efendy, Makhfud, Syarif, Muh, Amir, Nizar, Hidayat, Rachmad
• Format: Journal Article
• Language: English
• Published: Norcross Taylor & Francis Inc 03-04-2023
• Subjects: Case studies; Collaboration; Cost benefit analysis; Economic analysis; Feasibility; Feasibility studies; Higher education institutions; Importers; Imports; Industrial development; Internal rate of return; Net present value; Project feasibility; Return on investment; Salt; Indonesia
• ISSN: 0013-791X; 1547-2701
• DOI: 10.1080/0013791X.2023.2205858

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.