FINANCIAL AND ECONOMICAL FEASIBILITY OF BUSINESS IN MAKING SAGO WASTE INTO ANIMAL FEED (METROXYLON SAGO)

This study aims to identify the cost both financially and economically, and the determination of financial and economic benefits for the feasibility of the production of Sago waste in an effort of utilizing it into animal feed products which has commercially economic value. Availability of abundant sago dregs resulting from the process of producing sago (sago Metroxylon) is a problem for rural communities because it pollutes the environment and become useless waste. Sago waste utilization in large scale rarely occurs in Indonesia. One of other alternatives in utilizing sago waste is converting it into the main raw material of animal feed production. This allows a solution to overcome the chains of poverty that spreads in the countryside as well as increasing the low level of production and revenue of society. One of the obstacles faced by the farming business is about inadequate nutritional needs of cattle and high prices of packaged animal feed in market, so it still takes effort to cope with the problems by utilizing alternative feed sources which are affordable and abundant in terms of quantity. The data that will be used in this study include primary and secondary data. The method of analysis used in this study to determine the financial and economical benefits, as well as the financial and economic costs, is using shadow pricing method, estimation Opportunity Cost of Capital (OOC) method, analysis of Investment feasibility and sensitivity. The results of the financial analysis shows that the business of making cattle feed made from sago waste is feasible. The results of the sensitivity analysis with the scenario shows that in the business of making cattle feed would not be feasible on the condition in which the decline in the amount of output (sago waste) by 10 percent accompanied by falls captive market by 10 percent, fixed costs (labor experts and operational) by 20 percent. Switching Value Analysis shows that these efforts will not be feasible on a decline in potential waste sago of more than 18.428 percent and a captive market decline by 12 percent