Feasibility Study on the Development of Coconut Product Agroindustry in Berau Regency: A Financial Approach

Abstract

The policy direction of the local government of Berau Regency in building agro-industry derivative products from coconut commodities is one of the alternative developments in the plantation sector. The potential for the development of coconut products is relatively strong when viewed both from the aspect of the area of planting and the aspect of annual production. This study aims to measure the potential financial benefits that can be generated from the development of coconut agro-industry products in Berau Regency. Utilizing data for 2021–2024 and financial feasibility measurement techniques such as Net Present Value (NPV), Internal Rate of Return (IRR), Benefit Cost Ratio (BCR), and Payback Period (PP), this study proves that the development of coconut derivative products is feasible to be developed within a period of six years, with an NPV value of IDR 10.79 billion, IRR of 54 percent, BCR of 1.22, and a payback period of 2.65 years. These four indicators are consistently above the required eligibility threshold, showing that the diversification of plantation commodities through the integrated processing of coconut derivative products is a financially viable economic alternative for Berau Regency, while supporting the regional economic transformation agenda that has tended to depend on the extractive sector, such as oil palm plantations and coal mining.