Financial Feasibility Study of Establishment of Poultry Feed Mill in Bintuni District West Papua Province

Abstract

This study was conducted to determine the financial feasibility of establishing poultry feed mill in Bintuni Regency using local raw materials compared to using raw materials from Surabaya. Primary data were obtained from key respondents including poultry farmers, Head of Agriculture and Livestock Service, Head of District, Head of Village, and Head of Tribe and suppliers who became poultry products suppliers. Secondary data were obtained from the office of Agriculture and Animal Husbandry of several districts, Animal Quarantine Office, Department of Industry and Cooperative. Indicators of financial feasibility were measured buy Net Present Value, Internal Rate of Return, and Net Benefit/Cost. Data were analyzed with descriptive method using tabulation. The results showed that the establishment of feed mill using feed ingredients from Surabaya had a higher feasibility value than using local materials. The NPV, IRR and Net Benefit/Cost of feed mill from Surabaya were IDR 3,699,625,972.96, 26.07% and 1.07, respectively. The result of study recommends to the local government to increase agricultural production by expanding cultivation areas of corn, soybean and paddy, thus the function of local farmers can be improved as a permanent supplier.