Financial Analysis and Business

Feasibility Study of Cinnamon

Jelly Candy
 Background
• 1 • Seaweed Eucheuma cottonii
• High production, but limited
variation of food product .
• 2 • Prospect
• business opportunities to develop the
seaweed food based industry are still
• 3 • SME in Indonesia
wide open.

• 99% of business entities in Indonesia

are Small and Medium Enterprises
(SMEs) that contribute a lot for
• 4• Jelly Candy economy
Indonesian
• Food product that can be developed in
a small-scale industry is seaweed-
based jelly candy.
2
• Require business feasibility study
• AIMS
• to analyze financial feasibility in
establishing a small-scale cinnamon-
flavored jelly candy business
• to design and determine the layout
and space
 Seaweed 1,5 kg

Washing

Soaking for 24 hours Water

Materials and Methods Weighing

Cinnamon

Crushing
Crushing

Crushed seaweed
Sifting

Water
Mixing I Cinnamon Powder
29,5 liter
0,5 kg
Heating I
(80-90°C, ± 60 minutes)
Sugar
Mixing II
12,5 kg

Heating II
(80-90°C, ± 30 minutes)

Cooling

Molding

Drying
(65°C, 6 – 10 hours)

Packaging

Cinnamon jelly candy

 Production Assumptions
Producti on / day
Weight of jelly candy per package(100 gram) : 100gram
Product per day : 9.170gram
Number of packages : 417 packages
Production / month
Weight of jelly candy per package(100 gram) : 100gram
Product per day : 146.720 gram
Number of packages : 6.667 bungkus
Production / year
Weight of jelly candy per package(100 gram) : 100gram
Product per day : 1.760.640 gram
Number of packages : 80.000 bungkus

Location of Industry:
Pandeglang, Banten.
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 Sensitivity Analysis
Business Feasibility
Financial Analysis
Criteria Production Cost +4% Net Production -4%
Periode 5 years 5 years 5 years
Investment Rp. 72.576.700 Rp. 72.576.700 Rp. 72.576.700
Non-fixed cost
Rp. 283.372.169 Rp. 262.715.224 Rp. 273.043.696
(per year)
Fixed cost
Rp. 291.697.699 Rp. 289.312.138 Rp. 291.697.699
(per year)
Total cost Rp. 575.069.868 Rp. 552.027.361 Rp. 564.741.395
Total Production/year 64.128 packages 61.563packages 64.128 packages
Price (per package) Rp. 9.300 Rp. 9.300 Rp. 9.300
Revenue Rp. 596.390.400 Rp. 572.534.784 Rp. 596.390.400
Benefits Rp. 21.320.532 Rp. 20.507.423 Rp. 31.649.005
Discount Factor 9,75% 9,75% 9,75%
Net Present Value (NPV) Rp. 7.852.488 Rp. 4.750.377 Rp. 47.256.870
Net Benefit Cost Ratio (B/C
1,07> 1 1,07> 1 1,09> 1
Ratio)
Internal Rate of Return
13,89% 12,27% 32,82%
(IRR)
Payback Period (PBP) 3years 5months12 days 3years 7months 2 days 2 years 3months 21 days

Break Event Point (BEP) 55.423packages 53.201packages 54.312packages

• Financial Analysis
 A (Absolute), which indicates that the location
between activities must be adjacent and
adjacent.
E (Especially important), which indicates that
the location between activities must be close
together.
I (Important), which indicates that the location
between activities is close enough.
O (Ordinary), which indicates that the location
between activities does not have to be close
together.
U (Unimportant), which shows that the location
between activities is free and not bound
together.
X (Undesirable), which indicates that the
location between activities should not be
close together

• A c ti v i t y Re l ati o n s h i p C h a r t ( A RC )
• ARC are used to describe the interrelationships between work activities which
are given the degree of work relations expressed by the symbols A, E, I, O, U
and X
 • PLANT LAYOUT
4
Room /Area Activity Size
No.
3
1 Raw metirials receiving area 4mx3m 5
2 Preparation room 4mx4m
3 Washing area 4mx3m
4 Weighing area 4mx3m
6
7 2
5 Heating area 3mx3m
6 Drying area 4mx3m 1
7 Packaging room 4mx4m
8 Employee Changing Room 4mx3m
9 Administration Office 4mx3m
10 Manager office 4mx3m
11 Toilet 3mx2m
12 Employee convinient room 3mx2m Ruang Kantor

13 Prayer room 4mx2m

Building Length 13 m
Building Width 12 m
Building area 156
1 : 100
Pandeglang, Banten.
 CONCLUSION
• Based on 5 years financial analysis, it is feasible
to establish the small scale industry of
cinnamon jelly candy.
• The industry has a production capacity of 3,207
kg per year with a selling price of Rp. 9,300 per
package.
• The investment value is Rp. 72,576,700 and a
total annual cost of Rp. 564,741,395.

• The layout design consist of 7 rooms and 5 areas in 156 m2

industrial building. It is adjusted to process activities and
space requirements for tools and equipments.
• The total of industrial land area is 285 m2.

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 Acknowledgment
The team would like to express the sincerest gratitude to
Kemenristek Dikti for providing the research fund and the
Department of Agro-Industrial Technology for supporting the
research facilities. Thanks to LPKT– ITI for the encouragement
and constructive ideas. Appreciation goes to all the colleagues
who not only help but also give suggestion and all research
assistants who made this research possible

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T h a n k Yo u