Financial Feasibility Analysis and Marketing Strategy for Biochar Investment Derived from Oil Palm Empty Fruit Bunches at PT. ABC

Abstract

Empty Fruit Bunches (EFB) are the primary solid waste generated from palm oil processing industries and hold significant potential to be converted into value-added products. PT ABC produces approximately ±26,900 tons of EFB per year, yet its utilization remains suboptimal. One alternative utilization of EFB is processing it into biochar through pyrolysis, which can be used as an environmentally friendly soil conditioner. This study aims to analyze the financial feasibility of an EFB-based biochar investment, test its resilience against market fluctuation risks through sensitivity analysis, and formulate an appropriate marketing strategy for the biochar product at PT ABC. The research methods employed include observation, interviews, and literature review. Financial feasibility analysis was conducted using Net Present Value (NPV), Internal Rate of Return (IRR), Net Benefit Cost Ratio (Net B/C), Payback Period (PP), and Break Even Point (BEP) indicators, followed by a sensitivity analysis of selling price and variable cost change scenarios. Marketing strategy was analyzed using the Segmenting, Targeting, Positioning (STP) approach and the 4P marketing mix (product, price, place, promotion). The results show that the biochar business investment is feasible to implement, with an NPV of IDR 986,237,000, an IRR of 37.1%, a Net B/C of 1.77, a Payback Period of 2.14 years, and a BEP of IDR 926,110,000 per year (463.06 tons), all of which meet the feasibility criteria. The sensitivity analysis shows that the investment remains feasible even when a 10% selling price decrease or a 15% variable cost increase occurs separately, but becomes infeasible when both conditions occur simultaneously, with selling price identified as the parameter most sensitive to business profitability. The recommended marketing strategy focuses on oil palm plantation companies, smallholder (plasma) farmers, and environmentally conscious agribusiness players in South Kalimantan, with the product positioned as an eco-friendly, economically valuable soil conditioner derived from EFB waste that supports sustainable agriculture. Accordingly, the EFB-based biochar processing investment at PT ABC is considered financially feasible, resilient to market risk under moderate scenarios, and holds promising market prospects for further development by considering future potentials such as product certification and carbon trading.