Financial Feasibility Study Proves Coconut Downstream Industry in Berau Regency Highly Profitable

Natalia Sihombing S.Pd Jumat, Oktober 02, 2026
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FORMOSA NEWS

The development of an integrated coconut derivative processing industry in Berau Regency is deemed highly feasible and strategic for supporting regional economic transformation. Research conducted by Ahmad Faqhruddin Abdur-Rabb alongside a team from Universitas Negeri Makassar in September 2026 highlights that the optimal utilization of coconut commodities can serve as an alternative to replace the extractive sectors that have long dominated the region.

Historically, the economy in Berau Regency has tended to depend heavily on coal mining and oil palm plantations. Meanwhile, local coconut potential remains underexploited through high-value downstream product development. Addressing this condition, the study aims to measure potential financial gains from establishing an integrated coconut agroindustry that processes meat, shell, water, and fiber simultaneously within a single production cycle.

The research employs a quantitative methodology utilizing primary data from business actor interviews alongside secondary data from relevant government agencies spanning 2021 to 2024. Financial feasibility is evaluated using capital budgeting instruments including Net Present Value (NPV), Internal Rate of Return (IRR), Benefit-Cost Ratio (BCR), and Payback Period (PP).

Financial analysis results indicate that this agroindustry development plan is highly prospective, featuring the following core findings:

  • The project requires an initial investment of IDR 10.44 billion, primarily allocated toward physical infrastructure and processing facilities.
  • Based on a 15 percent discount rate, the project yields a positive NPV of IDR 10.79 billion, demonstrating its capacity to generate economic value exceeding investor expectations.
  • The Internal Rate of Return (IRR) reaches 54 percent, significantly surpassing the established benchmark interest rate.
  • Initial investment capital is projected to be recovered within a short period of 2.65 years out of the total six-year operational projection.
  • The Benefit-Cost Ratio (BCR) stands at 1.22, meaning every rupiah of cost incurred generates benefits worth IDR 1.22.

Implementing circular bioeconomy concepts through a zero-waste approach allows all parts of the coconut to be transformed into high-value commercial products. Virgin Coconut Oil (VCO) acts as the primary revenue driver, followed by charcoal briquettes, nata de coco, and cocofiber. This initiative aligns with regional green economic transformation agendas and supports the East Kalimantan Provincial Long-Term Development Plan (RPJPD).

Nevertheless, operating expenses are heavily dominated by the procurement of coconut raw materials, consuming roughly 82 percent of total monthly costs. Consequently, researchers suggest that local governments facilitate farmer organization establishment and long-term supply contracts to maintain price stability and raw material availability at the farming level.

Author Profiles

  • Full Name: Ahmad Faqhruddin Abdur-Rabb, S.E., M.Sc. (alongside research team members Shadry Andriani and Dirmansyah Darwin)
  • University Affiliation: Universitas Negeri Makassar, Indonesia
  • Fields of Expertise: Agricultural Economics, Financial Management, and Agroindustry Business Feasibility Studies

Research Sources

Natalia Sihombing S.Pd

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