Tk18 Report Assignment1 Done

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UNIVERSITAS INDONESIA
SOIL HARDENING AGENT FOR NEW ROAD OPENING
Draft Assignment 4
GROUP 26
GROUP PERSONNEL
Aditya Haryanto (1506673492)

Luh Putu Devina Ichasia Prawira` (1506746355)
Misael Satrio (1506746140)
DioArveza Naufal (1506746191)
Ibrahim (1506717973)
A’isyahFadhlillah (1606951166)
CHEMICAL ENGINEERING DEPARTMENT

ENGINEERING FACULTY
DEPOK
MAY,2018
EXECUTIVE SUMMARY
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LIST OF CONTENT
EXECUTIVE SUMMARY .................................................................................. II

LIST OF CONTENT .......................................................................................... III
LIST OF FIGURES ............................................................................................ IV
LIST OF TABLES ................................................................................................V
CHAPTER 1 SUPPLY CHAIN ........................................................................... 7
1.1 PLANT LOCATION ................................................................................. 7
1.2 RAW MATERIAL ..................................................................................... 9
1.2.1 RAW MATERIAL SUPPLY .............................................................................. 9
1.2.2 ORDER CAPACITY ...................................................................................... 13
1.3 PRODUCT DISTRIBUTION ................................................................. 19
1.3.1 PRODUCT DISTRIBUTION LOCATION ........................................................... 20
1.3.3 PRODUCT DISTRIBUTION CHAIN ................................................................. 21
1.3.4 TRANSPORTATION METHOD ....................................................................... 21
CHAPTER 2 MARKETING.............................................................................. 24
2.1 MARKET SEGMENTATION ........................................................................ 24
2.2 MARKET MIX ............................................................................................ 25
CHAPTER 3 PRODUCT COSTING ................................................................ 27
3.1 TOTAL CAPITAL INVESTMENT ....................................................... 27
3.1.1 FIX CAPITAL INVESTMENT ......................................................................... 28
3.1.2 WORKING CAPITAL INVESTMENT ............................................................... 37
3.1.3 TOTAL CAPITAL INVESTMENT .................................................................... 37
3.2 OPERATIONAL COST .......................................................................... 38
3.2.1.MANUFACTURING COST ............................................................................ 39
3.2.2.GENERAL EXPENSE .................................................................................... 61
3.3 ECONOMIC ANALYSIS ........................................................................ 64
3.3.1 CAPITAL LOAN ........................................................................................... 64
3.3.2 PRODUCT PRICING PER UNIT ...................................................................... 65
3.3.3 CASH FLOW ................................................................................................ 66
3.3.4 CASH BREAKDOWN .................................................................................... 70
CHAPTER 4 PROFITABILITY ANALYSIS .................................................. 72
4.1 RATE OF RETURN ................................................................................ 72
4.3 BREAK EVEN POINT ............................................................................ 72
4.4 INTERNAL RATE OF RETURN .......................................................... 73
4.5 NET PRESENT VALUE ......................................................................... 74
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4.6 SENSITIVITY ANALYSIS ..................................................................... 74
4.6.1 PRODUCT PRICE FLUCTUATION .................................................................. 74
4.6.2 RAW MATERIAL COST CHANGES ............................................................... 75
4.6.3 OPERATION COST CHANGES ....................................................................... 76
4.6.4 FLUCTUATION GRAPHICS ........................................................................... 77
CHAPTER 5 ........................................................................................................ 79
CONCLUSION.................................................................................................... 79
REFERENCE ...................................................................................................... VI
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LIST OF FIGURES
Figure 1. 1 Plant Location from Satelite ................................................................. 8

Figure 1. 2 Plant Location ....................................................................................... 9
Figure 1. 3 Product Distribution Chain ................................................................. 21
Figure 3. 1 BTCF and ATCF Cash flow of Greetor plant .................................... 67
Figure 3. 2 Cost Breakdown Diagram................................................................... 71
Figure 4. 1 .Graphic of Net Present Value Fluctuation ......................................... 77
Figure 4. 2 Graphic of Internal Rate of Return Fluctuation .................................. 77
Figure 4. 3 Graphic of Payback Period Fluctuation .............................................. 78
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LIST OF TABLES
Table 1. 1 Raw material and Packaging supplier list ............................................ 10

Table 1. 2 Raw Material and Packaging Supplier Comparison ............................ 11
Table 1. 3 Chosen Raw Materials and Packaging Suppliers................................. 12
Table 1. 4 Purchase Amount of Raw Material for Manufacture Process............. 14
Table 1. 5 Scheduling Order for Raw Material And Packaging for One Year ..... 15
Table 1. 6 Percentage Distribution To 6 Regions ................................................. 21
Table 1. 7 Distribution .......................................................................................... 22
Table 1. 8 Distribution Cost of Truck due to Distance ......................................... 22
Table 3. 1 Marshall and Swift Chemical Equipment Cost Index .......................... 29
Table 3. 2 Forecasting Marshall and Swift’s chemical equipment cost index ...... 30
Table 3. 3 List Of Bare-Module Factor ................................................................. 31
Table 3. 4 Bare module cost.................................................................................. 32
Table 3. 5 Land cost .............................................................................................. 32
Table 3. 6 Building cost ........................................................................................ 32
Table 3. 7 Supporting facilities investment cost ................................................... 33
Table 3. 8 Supporting facilities investment cost (con’d) ...................................... 33
Table 3. 9 Utilities installation cost....................................................................... 34
Table 3. 10 Patent fee details ................................................................................ 35
Table 3. 11 Brand Fee Details ............................................................................... 35
Table 3. 12 Licensing cost .................................................................................... 36
Table 3. 13 Fixed capital cost calculation ............................................................. 38
Table 3. 14 TotalFixed capital cost calculation .................................................... 38
Table 3. 15 Calculation of raw material ................................................................ 40
Table 3. 16 Indirect Labor Wages ......................................................................... 42
Table 3. 17 Indirect Labor Wages (Cont’d) .......................................................... 42
Table 3. 18 Tariff adjustment in May 2016 .......................................................... 43
Table 3. 19 Electricity Needs For Main Equipments ............................................ 44
Table 3. 20 Electricity Needs For Supporting Equipments................................... 45
Table 3. 21 Water needs in Greetor plant ............................................................. 46
Table 3. 22 Maintenance Cost............................................................................... 47
Table 3. 23 Patent Registration Cost ..................................................................... 47
Table 3. 24 Copyright Registration Cost............................................................... 48
Table 3. 25 Industrial Design Cost........................................................................ 48
Table 3. 26 Brand Registration Cost ..................................................................... 49
Table 3. 27 Depreciation calculation for main equipments .................................. 51
Table 3. 28 Depreciation calculation for main equipments (cont’d) .................... 51
Table 3. 29 Depreciation Calculation For Supporting Equipments ...................... 52
Table 3. 30 Depreciation Calculation For Building And Facilities ...................... 56
Table 3. 31 Total Depreciation Cost For 10 Years Of Life Expectancy ............... 57
Table 3. 32 Cost For Building Tax........................................................................ 57
Table 3. 33 Direct Labor Salary Tax ..................................................................... 59
Table 3. 34 Annual Insurance Cost ....................................................................... 61
Table 3. 35 Total Communication Cost ................................................................ 61
Table 3. 36 Distribution Cost of Product .............................................................. 62
Table 3. 37 Cost of Printed Media Publication ..................................................... 63
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Table 3. 38 Cost of Online Advertisement Through Website............................... 64
Table 3. 39 Cost of Website Development ........................................................... 64
Table 3. 40 Cashflow of Bank Loan ..................................................................... 65
Table 3. 41 Product Price Calculation................................................................... 65
Table 3. 42 Cash Flow (Prices Are in Million Rupiahs) ....................................... 68
Table 3. 43 WACC variable .................................................................................. 69
Table 4. 1 Breakeven Point Calculation................................................................ 73
Table 4. 2 Selling Price Fluctuations .................................................................... 75
Table 4. 3 Raw material price fluctuation ............................................................. 75
Table 4. 4 Operating Labour Wage Fluctuation.................................................... 76
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CHAPTER 1
SUPPLY CHAIN
1.1 Plant Location

Location of plant is important to minimize distribution cost and to
maximize effectiveness. Strategic location will minimize distribution cost. Plant
location determines economic feasibility and manufacturing ability of a product.
An enterprise has to locate their plant wisely due to these factors. The analysis
includes many aspects to consider. There are:
 Site Economics
Cost establishment is defined as the cost which is arised from the presence
of physical facilities while operational cost is defined as the cost which is
incurred because of the carry-on of the business on day to day basis
(operational cost is also known as running cost).
 Demographic Analysis
This analysis considers the population in a certain area, facility, age
composition, income (per capita), educational level, job or occupation
distribution, and flood free area.
 Trade Area Analysis
Trade area analysis is to foresee the sustainability of trading system that
occurs in certain area. This kind of analysis is very crucial to ensure that the
company will sustain in that area.
 Competitive Analysis
This analysis considers some aspects including nature, location, size and
quality of competition in certain trade area.
There are other important factors which are considered in selecting plant
location so that it gives the most suitable location. Those factors are:
a. Environmental condition (climate),
b. Logistic of raw materials to the plant and the product to the market, which
includes time and transportation cost,
c. Access to the market,
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d. Infrastructure facilities such as roads, accessibility to railway station, airport

or harbor which gives the most affordable costs. Resources such as
electricity, water, public utilities, civil amenities and means of
communication are important to ensure the plant runs smoothly.
e. Safety and security of the selected location
f. Government influence. A place which is near government area gives best
access to take care legal affairs such as tax relief, subsidies and liberation.
After considering those factors, it has been determined that the plant location
will be located in an industrial zone named Karawang Industrial International
Center (KIIC). KIIC is located in Telukjambe Barat District, Karawang, West
Java. It gives secure manufacturing activities such as electrical, water, human
resources, road access and port access. Unfortunately, the land price surrounding
KIIC area is quite expensive.
PT PolySoil plant location is in Permata Raya Road in front of PT. Sharp
Semiconductor Indonesia. The land price reaches the amount of Rp 1,611,207 per
square meter (rumah123.com, Accessed April 8th, 2018). The advantages of
choosing this location are as follows.
a) Flood-free area
b) Close to Jakarta- Cikampek Toll Road
c) Close to Merak and Tanjung Priok harbor
d) Located at one of famous industrial area
e) Truck and tronton access
f) Letter propietary
Figure 1. 1 Plant Location from Satelite

(Source: Google Earth)
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Figure 1. 2 Plant Location

(Source: Google Earth)
1.2 Raw Material
1.2.1 Raw Material Supply
To exhibit a good manufacturing process, it needs to obtain the ingredient
from right suppliers. The ingredient can be ordered and delivered from many
different suppliers with certain fee. The ingredient will be delivered from
suppliers located near the plant location. The cost of delivery to the plant material
storage assumed to be the responsibility of the suppliers and included in the
contract that were made. For some particular cases, there will also be an
agreement for those who will pay the cost of delivery. The time needed for the
ingredients to be delivered affected by the distance that will take and way of
distribution. To suppliers near the plant location, the time needed is one day in
maximum, with assumption of no delay. The delivery process will be done by
truck, so it is assumed that the time needed quite short considering the plant and
suppliers location distance and accessibility.
Ingredients which are ordered from the suppliers for the first time are the
ingredients for production process in certain period, usually maximum period for
stocking the ingredient is 7 days. In the manufacturing process, there are 12
ingredients and one packaging material supply should be ordered.
More than one alternative suppliers are considered. Supplier selection is based
on the comparison of quality, price, and distance between the supplier and plant
location. Price is the most important factor that must be considered for choosing a
supplier. The cheaper price the supplier offers the better it is. The ingredients will
be listed in table below:
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Table 1. 1 Raw material and Packaging supplier list
No. Ingredient Price ($/Unit) Supplier
1. PT. Samira Schem Indonesia

1 VeoVa 10 1.7-2.7 (Jakarta)
2. PT. SamchemPrasandha (Jakarta)
1. PT. Merck Tbk Indonesia
(Jakarta)
2 Vinyl Acetate 0.75
2. PT. Graha Jaya PratamaKinerja
(Jakarta)
1. PT. Anugrah Putra Kencana
3 Methyl Methacrylate 2.4-2.45
2. PT. Graha Jaya PratamaKinerja
1. PT.
4 Polypropylene Glycol 1.75-1.8
InsoclayAcidatamaIndonesia
5 Disponil LDBS 55 2.31 1. PT. Graha Jaya PratamaKinerja
1. PT. Sarana Mitra Inti Global

Ethoxylate Fatty
6 1.7-1.8 2. Ecogreen Oleochemicals
Alcohol
Pte.Ltd.
7 Hydroxyethylcellulose 10.18 1. PT. CorticoMulia Sejahtera
1. PT.
8 Vinyl Sulfonate 10.01 HamparanPancaranChemindo
2. CV. FajarHarapan
Trimethyl Pentanediol
9 44/L 1. PT. Chemicals Indonesia
Monoisobutyrate
BIT (Benzyl
10 1. PT. PKPM
Isothiazolone)
MIT (Methyl
11 1.9 1. PT. PKPM
Isothiazolone)
12 Sodium Acetate 27.5 1. CV Berlian Kimia
13. Drum … …
Table 1. 2 Raw Material and Packaging Supplier Comparison
Supplier 1 Supplier 2
Raw material Supplier Price / Transportation Supplier Price / Transportation
Location Distance Location Distance
company unit fee/unit company unit fee/unit
VeoVa 10
Vinyl Acetate
Methyl Methacrylate
Polypropylene Glycol
Disponil LDBS 55
Ethoxylate Fatty
Alcohol
Hydroxyethylcellulose
Vinyl Sulfonate
Monoisobutyrate
BIT (Benzyl
Isothiazolone)
MIT (Methyl
Isothiazolone)
Sodium Acetate
Drum type ...
Table 1. 3 Chosen Raw Materials and Packaging Suppliers
Chosen Suppliers
Transportati
Raw Materials Packaging Unit Price/
Location Supplier Company on fee/ton
size Capacity package (Rp)
(Rp)
VeoVa 10
Vinyl Acetate
Methyl Methacrylate
Disponil LDBS 55
Ethoxylate Fatty Alcohol
Vinyl Sulfonate
Monoisobutyrate
BIT (Benzyl
Isothiazolone)
MIT (Methyl
Isothiazolone)
Sodium Acetate
Drum type ...
First supplier priority to supply all of the raw materials must be decided. These suppliers and require to sending the raw materials
needed will be contacted. To keep supply of raw materials if the first supplier is not able to supply raw materials, the second supplier
to send the raw materials are needed. The second supplier will be used as back up supplier for the raw materials.
1.2.2 Order Capacity
Order capacity is determined based on how long a supplier can meet the order of the raw material. The amount of first
purchased capacity is not equal with the following purchase. Usually first purchase capacity is more than the normal capacity (e.g
additional 10% for safety inventory). It is done to anticipate problems that may occur regarding the delivery of the next raw material
purchase. Table 1.4 shows raw material prices per bases, the needed amount for production each year, the number of ordered or
purchased each year and also the amount needed for safety inventory. From those data, the scheduling of order could be make. The
scheduling of order is shown in table 1.5.
Table 1. 4 Purchase Amount of Raw Material for Manufacture Process
Order / Year Total Order Total Delivery
Price per Unit
Raw Materials Supplier Location Cost per Year Cost per Year
Amount Unit (Rp)
(Rp) (Rp)
VeoVa 10
Vinyl Acetate
Methyl Methacrylate
Disponil LDBS 55
Ethoxylate Fatty
Alcohol
Vinyl Sulfonate
Monoisobutyrate
BIT (Benzyl
Isothiazolone)
MIT (Methyl
Isothiazolone)
Sodium Acetate
Drum
TOTAL RAW MATERIAL COST - -
Table 1. 5 Scheduling Order for Raw Material And Packaging for One Year
Total January February March April May June

Raw Material Schedule
order 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Order
VeoVa 10
Receive
Order
Vinyl Acetate
Receive
Order
Methyl Methacrylate
Receive
Order
Receive
Order
Disponil LDBS 55
Receive
Ethoxylate Fatty Order
Alcohol Receive
Order
Receive
Order
Vinyl Sulfonate
Receive
Trimethyl Pentanediol Order
Monoisobutyrate Receive
BIT (Benzyl Order
Isothiazolone) Receive
MIT (Methyl Order
Order
Sodium Acetate
Receive
Order
Drum
Receive
Table 1. 5 Raw Material Order (Cont’d)
Total July August September October November December

Raw Material Schedule
order 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Order
VeoVa 10
Receive
Order
Vinyl Acetate
Receive
Order
Methyl Methacrylate
Receive
Order
Receive
Order
Disponil LDBS 55
Receive
Ethoxylate Fatty Order
Alcohol Receive
Order
Receive
Order
Vinyl Sulfonate
Receive
Trimethyl Pentanediol Order
Monoisobutyrate Receive
BIT (Benzyl Order
MIT (Methyl Order
Order
Sodium Acetate
Receive
Order
Drum
Receive
Some of the raw material listed above is delivered by using MOGA Express from China to Merak Harbour. This plan is chosen
because some of the raw materials are from China and purchased in big amount (around ...tons). Table 1.6 show that .... will be arrive
3-4 weeks after order and ordered every week. .... and .... solution will be arrived after 2-3 weeks after order, ... ordered every 3
months and ... solution ordered every month. Water will be consumed every day from PDAM ..... and PP Plastic Drum will be arrived
after 1 week after order.
After determining the timeline or schedule of raw material (including packaging) order, we can create graphs of raw material
inventory based on the raw material supply and usage everydays. Figure 1.2 and Figure 1.3 show the raw materials inventory per
month
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18000
16000
14000
12000
Kilograms
10000
8000
6000
4000
2000
0
0 5 10 15 20 25 30
Days
Tannin Extract Potassium Iodide Salt Orange Fragrance Water
Figure 1.2 Graphic raw materials inventory chart per month
400
350
300
250
Kilograms
200
150
100
50
0
0 5 10 15 20 25 30
Days
Figure 1.3 Graphic packaging material inventory chart per month

From Figure 1.2 and 1.3 we can show that materials and packaging will
decrease for every period of time then will be increase again to maximum amount.
1.3 Product Distribution
In this section, it explains about the distribution of Polysoil (soil hardening
agent) to the customers. The explanation consists of product distribution location,
proportion product distribution, product distribution from plant to customers, and
the mode transportation.
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1.3.1 Product Distribution Location

The main target consumers of soil hardening agent are mining company,
especially coal mining. Every mining company certainly need road for
transportation and road for mining transportation must be strengthen due to
pressure caused by truck load/others. Polysoil product will be distributed to
several city in Indonesia. There are East Kalimantan, South Kalimantan, and
South Sumatera. Polysoil will sale directly to customer without wholesaler.
Product distribution divided into 6 big region that cover all coal mining in
Indonesia. These 6 big regions are based on coal production rate and coal mining
area. From the region we make a category as following:
 Region 1, Jakarta, Bogor, Depok, Tangerang, and Bekasi.
 Region 2, West Java, especially Bandung
 Region 3, Centre Java and Jogjakarta, especially Semarang and
Jogjakarta
 Region 4, East Java, especially Surabaya.\
 Region 5,
 Region 6
1.3.2 Proportion of Product Distribution
The product is sold only to the distributors (wholesalers) in each region.
This is because the consumption of soil hardening agent each soil company is
vary and not too much, so selling it to the wholesalers will be more effective. It is
also reduce cost to make branch store (warehouse) in each distribution area, for
every wholesaler will keep the product in their own warehouse. Costs to build the
branch stores include the cost of the investment, cost of operations, and
maintenance costs for employees, electricity, and so on. Distribution of products
through a wholesaler can expand the network of product distribution area to
customers. Wholesale is a company that sells a large number of products with
variations in the shape and quality of the product. The proportion of product will
be distributed based on coal production rate, coal mining area, and longth road
requirement for mining. Tabel 1.7 shows percentage distribution to 6 Region.
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Table 1. 6 Percentage Distribution To 6 Regions

Region 1 Region 2 Region 3 Region 4 Region 5 Region 6
Quota ...% ...% ...% ...% ...% ...%
1.3.3 Product Distribution Chain
After the products are manufactured, the product will be stored in the
storage facility. Then the products will be distributed to wholesalers and retailers
in the target area that have been determined in the Product Distribution Location
before. The products will be sold directly to consumers by wholesalers. The
product distribution chain is shown in figure below.
Figure 1. 3 Product Distribution Chain

The figure above shows the product distribution chain from Polysoil plant
to the end consumers. We will only focusing in delivering the product to the
wholesaler. The delivery truck will be operated ... days a week for region 1 and
once for region 2, 3, and 4 to distribute the products to wholesalers in the
distribution area in each region.
1.3.4 Transportation Method
There are two transportation method through land, by truck and train.
However, if we distribute out products by train, there are some problems of
flexibilities to reach distributor offices and the facilities of train in Indonesia
which is insufficient. Therefore, it choose Mitsubishi New Colt Diesel FI 1217
170 PS 4 x 2 with 6 wheels to distribute our products to distributors in region 2, 3
and 4. This vehicle has dimension 603 cm x 222 cm x 250 cm.
For region 1, we use Grand Max Box 1.3 STD to distribute our products
that has a dimension 4285 cm x 1670 cm x 2070 cm. We use this kind of vehicle
because the distance between our plant and costumers in region 1 are not far
away, so the smaller of truck is more efficient.
This truck chosen to distribute ther product because this vehicle is more
flexible to reach distributors rather than train. We plan to buy 2 units second hand
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trucks of Mitsubishi New Colt Diesel FI 1217 170 PS and 2 units second hand
truck Grand Max Box 1.3 STD distribution activities in our plant.
Table 1. 7 Distribution
Region Fuel Fee Highways Fee Total Cost
1 Rp 150,000 Rp 100,000 Rp 250,000
2 Rp 200,000 Rp 200,000 Rp 400,000
3 Rp 550,000 Rp 300,000 Rp 850,000
4 Rp 850,000 Rp 450,000 Rp 1,300,000
Table 1. 8 Distribution Cost of Truck due to Distance
Distribution
Pathway Route Time Spent Cost/Trip
Pathway
(region 1)
(region 2)
(region 3)
(region 4)
(region 5)
(region 6)
These trucks that we use in the product distribution can be estimated

through Google Maps. The time is spent to product distribution can be found by
the distance column obtained from each location using Google Maps. The time
needed to deliver products from varies pathways of distribution is used to estimate
the distribution cost. For cost estimating, we determined assuming the cost of
renting a truck and calculate the fuel cost of each city. Table above shows that the
distribution cost is high enough for Surabaya region.
1.4 Inventory
1.4.1 Raw Material Inventory
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1.4.2 Product Inventor
CHAPTER 2
MARKETING
2.1 Market Segmentation

Market segmentation is done to analyze potential buyers of a product.
Market segmentation divides divides a broad target market into subsets of
consumers, business, region, or countries that assumed to have common needs,
interests, and priorities.Later, a marketing strategy is designed and implemented
to target them.
According to NetMBA, make the segments are practical enough, should
evaluated the segments against the following criteria:
 Identifiable: the differentiating attributes of the segments must be measurable
in order to identify them.
 Accessible: the segments must be reachable through communication and
distribution channels.
 Substantial: the segments should be sufficiently large to justify the resources
required to target them.
 Unique needs: to justify separate offerings, the segments must respond
differently to the different marketing mixes.
 Durable: the segments should be relatively stable to minimize the cost of
frequent changes.
Market segmentation divides the market based on geographic, demographic,
psychographic, and behavior.
a. Geographical Segmentation
Geographical segmentation divides the market based on geographical area of
the market (or consumers).
b. Demographic Segmentation
Demographic segmentation divides the market based on demographical data
such as age, gender, income level, occupation, education level, etc.
c. Psychographic Segmentation
Psychographic segmentation divides the market based on lifestyle and
personal preferences.
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d. Behavioral Segmentation
Behavioral segmentation divides the market based on behavior toward
products. There are some variables for behavioral segmentation, which are
benefits sought, usage rate, brand loyalty, user status (potential, first-time,
regular), readiness to buy, or occasions.
2.2 Market Mix
To make the product bought by the customers, we need strategy. The strategy
must fit the characteristic of the consumers and gain strong position in the market.
Based on one of the most prominent method to organize a strategy of marketing,
marketing mix, we must take care of four important aspects and define those
aspects very clearly. Marketing mix is also known as the 4Ps, which consists of
products (goods or services), price, place (distribution) and promotion.
 Product
Polysoil is soil hardening agent, which can change it’s own color due to
temperature changing by using the main ingredient of sublimation and
thermochromic pigment. This printer ink can be used in many kind of products
that made from ceramic. But, we highly reccomended to the customers to used our
product on tableware because it has a special feature of color changing so the
color of tableware, like plates or mugs can be changed when it is used.
 Price
The manufacturer set the price of the product to IDR ... per drum, which
contains 200 L. The estimation of the price has included affordability of targeted
consumers and comparison with competitors.
 Place
The company played as double role as manufacturer and distribution company.
Because there is no need in using wholesaler services. So, after product
manufactured, soil hardening agent will be placed in storage facility and will be
deliver to our customer including printing places.
 Promotion
Promotion has its communication tools which should be integrated together
with the same consistent message. The strategy we arrange for promotion is
divided into two categories, which are below the line and above the line.
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Promotion below the line means the activity is off-air and it is conducted on air
for above the line promotion. For above the line strategy, we are going to have
advertisement on website give some promotion to printing places.
 Website
Nowadays, website is very essential to sustainability of information distributed
by a company to its mass consumers. Website becomes a place where people get
to know an institution or a company holistically and really close. Our website will
contain information about the company, its profile, its goal, cooperation with the
company that could be build and so on. Related to the product, we can give
information about the benefits of product, guide of usage, location of sale,
technology used in the product and so on. We certainly have to put a contact that
could serve any customers or potential consumers any time.
CHAPTER 3
PRODUCT COSTING
Greetor is manufactured in Cilegon, Banten which comprises of plant and

office which are the working places for both direct and indirect labor. The plant
will be built in an area of 1000 m2 as the total area. The plant will produce Greetor
with a netto of 200 liters per drum. The total time needed to produce 9 drums of
Greetor is 1 hour 50 minutes, which is one cycle. In one day, our plant go through
5 cycles, so we produce 45 drums per day.
An precise economical analysis needed to be done to determine whether the
product will be successful in the market or not. During the analysis process, all
costs involved in all manufacturing process of this product are calculated
considerably. Calculation of tax and profit will also be included in this analysis.
Basically, there are two types of costs, fixed cost and variable cost. Fixed cost is
the cost that will not change and won’t be influenced by the total production. On
the other hand, variable cost is the cost that can always fluctuate by the influence
of material requirements and total production.
The purpose of conducting this analysis is to determine the rate of return of
the product sals. The calculated rate of return can be used to determined the
payback period.
3.1 Total Capital Investment
During the product manufacturing process, the capital investment required
will be received by either loan from the bank, investor, or self-fund raiser. There
are some assumptions which have been made so that the product evaluation can
be done easier.
 Currency conversion 1 US$ = Rp 13,358.00 (by May 2016).
 Some equipments or building have salvage value.
 Plant will be built by the end of 2016 for one year. Plant will start to operate
in the beginning of 2018.
 Depreciation will be calculated by Declining Balance Method with 10% as
the value of f factor.
 Plant is built in empty land located in Karawang Industrial Area.
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The initial investment cost is known as Total Capital Investment (TCI). An

investment is needed as the capital cost to begin a product manufacture. The
amount of the capital investment determines the worthiness of the product
manufacture. The total capital investment includes funds required to purchase
land, design and purchase equipment, structures, and buildings as well as to bring
the facility into operation (Couper, 2003). In calculating the investment cost, there
are two kind of cost, Fixed Capital Cost (FC) and Working Capital (WC). Fixed
Capital Cost is the capital needed to supply the necessary manufacturing and plant
facilities. While Working Capital is the capital needed to operate of the plant until
company start to get income. The TCI calculation is done to determine the
feasibility of development of a plant and to identify whether it will give a
sufficient positive marginal value.
Total Capital Investment (TCI) are calculated with joining methods of
Guthrie for the Total Permanent Investment (TPI) and Working Capital (WC)
calculation, and other explanation for other costs.
Guthrie method is done by calculating the Total Bare Module Cost. Guthrie
method is usually chosen for calculating total capital investment because it can
calculate other cost besides equipment cost based on bare module factor. This
factor has included cost for additional fee such as delivery fee and installation fee.
The key when using this method is how we classify our equipment into specific
category. The equation to calculate Total Capital Investment in Eq. (3.1)
TCI  FC  FW  1   FC (3.1)

where : FC = Fixed Capital Cost
FW= Working Capital (Before Obtaining Income)
3.1.1 Fix Capital Investment
Fixed capital consists of direct cost and indirect cost. Direct cost is cost
that directly involved in the production process of the product. Direct cost consists
of many components, such as equipment costs (total bare module cost), land cost,
building cost, offsite cost, etc.
29
3.3.1.1 Direct cost

a) Total Bare Module Cost
The first element of fixed capital cost is Equipment Cost. The foundation of
a fixed capital investment estimate is the equipment cost data. From this
information, through the application of factors or percentages based upon the
estimator’s experience, the fixed capital investment is developed. These cost data
are reported as purchased, delivered, or installed cost. Purchased cost is the price
of the equipment FOB at the manufacturer’s plant, whereas delivered cost is the
purchased price plus the delivery charge to the purchaser’s plant FOB. Installed
cost means the equipment has been purchased, delivered, uncrated, and placed on
a foundation in the purchaser’s operating department but does not include piping,
electrical, instrumentation, insulation, etc. (Perry, 2007).
There are many sources of graphical equipment cost data in the literature,
but some are old. There have been no significant cost data published recently. To
correct the price in year of purchase, cost index is needed to obtain purchase in
2017.Cost data are given as of a specific date and can be converted to more recent
costs through the use of cost indices. In general, the indices are based upon
constant dollars in a base year and actual dollars in a specific year. In this way,
with the proper application of the index, the effect of inflation (or deflation) and
price increases by multiplying the historical cost by the ratio of the present cost
indexdivided by the index applicable in the historical year. Labor, material,
construction costs, energy prices, and product prices all change at different rates.
A cost index is used to project a cost from a base year to another selected year.
Table 3. 1 Marshall and Swift Chemical Equipment Cost Index
Year Cost Index

2003
2004
2005
2006
2007
2008
30
2009
2010 1,457.40
2011 1,565.64
2012 1,618.88
2013 1,672.12
(Source: Marshall and Swift, 2013)
Based on this annual index of chemical equipment price change per year, we
can extrapolate all prices up to the year of 2017. From the table above, we can
calculate the trend line equation. By using the trend line of annual index in which
y= 53,39x – 105805. The extrapolation price calculation is shown in Table 2.2.
Table 3. 2 Forecasting Marshall and Swift’s chemical equipment cost index
Year Cost Index

2014 1,725.27
2015 1,778.66
2016 1,832.05
2017 1,885.44
2018 1,938.83
Based on Perry Chemical Engineering Handbook (8th edition), the following
equation is used to calculate the present cost of an equipment.
 index value at present time 
Present cost = Original cost   (3.2)
 index value at original time 
Total Bare Module Cost is the total cost of equipment with the additional
delivery fee, customs fee, and other required fee. The Total Bare Module Cost
will be the cost reference in calculating Total Capital Investment. The sequence
step to obtain Total BM Cost are:
 List all of our equipment needed, including the quantity.
 Classify it in a category that is most suitable in data to obtain bare-module
factor. The bare module factors included FOB purchase, equipment
instruments and installations (piping, concrete, steel, controllers, electrical,
insulation, and paint), direct labor for installation (material erection and
equipment setting), and also indirect module expenses (freight, insurance,
taxes, construction overhead, and contractor engineering expenses). Then,
this factor will be multiplied by the cost of each equipment. As for the
31
equipments that have no bare module factor in the table, we would use the
average value of the all bare module factor. This case might happen because
the equipments we used are chemical equipments in batch mode operation
that is specifically used. Table 3.3 shows list of bare-module factor.
Table 3. 3 List Of Bare-Module Factor
(Source: Seider et al., 2004)
 Look for Marshall and Swift Chemical Equipment Cost Index to determine
cost of equipment in the year when we expect to buy.
 Sum the FOB cost we expect to buy with shipping cost to obtain CIF
 Use the formula to obtain Total Bare Module Cost. The formula is:
Total bare module cost = 
i  number of equipment
(bare module cost)i (2.3)
Total bare module cost = 

i  number of equipment
(quantit x CIF x BM factor)i (2.4)
32
Table 3. 4 Bare module cost
FOB
Equipment
Price for FOB Price for FOB Price
Equipment Qty BMF Assumption BM Cost (Rp)
2016 2018 (Rp) for 2020 (Rp)
on Module
(USD)
TOTAL BARE MODULE COST
b) Plant Building and Site Cost

Land is often acquired by a company some time prior to the building of a
manufacturing facility. When a project is committed to be built on this land, the
value of the land becomes part of that facility’s capital investment. Building Cost
is cost for building plant and office as well. The plant is located Karawang
Industrial Area, West Java. The land price reaches the amount of Rp3,750,000 per
square metric). The calculation of land and building cost is shown in Table 3.5
and Table 2.6 respectively.
Table 3. 5 Land cost
Price per m2
Area (m2) Land Cost
(Rp)
3,750,000 1000 3,750,000,000
Table 3. 6 Building cost
Description Price (Rp) Area (m2) Total Price (Rp)

Building Area (per
2,000,000 800 1,600,000,000
m2 )
10% from land
Foundation - 375,000,000
cost
3% from land
Contractors - 112,500,000
cost
5% from land
Land Development - 187,500,000
cost
TOTAL BUILDING COST 2,275,000,000
33
Based on the calculation in Table 3.5 and Table 3.6, the total cost for land
reaches the amount of Rp 3,750,000,000 and the total cost for building reaches the
amount of Rp 2,275,000,000.
c) Supporting Facilities Investment Cost
Supporting equipments are equipments that are needed to accelerate
production process. Main supporting equipments are office stationaries that are
needed for all of the employees. The amount of these supporting equipments is
determined from the number of employees and also their needs. In addition,
transportation vehicles also included in supporting equipments that are needed to
transport the product to their distribution areas.
Table 3. 7 Supporting facilities investment cost
Total Price
Equipment Price (Rp) Quantity
(Rp)
Receptionist Desk & Chair 3,575,000 1 3,575,000
Meeting Desk & Chair 5,100,000 1 5,100,000
Office Desk & Chair 1,350,000 15 20,250,000
Pantry Set 2,200,000 1 2,200,000
Toilet Set 3,000,000 2 6,000,000
Janitor Set 1,500,000 1 1,500,000
Filling Cabinet 1,150,000 10 11,500,000
Sofa 2,730,000 2 5,460,000
Trashbin 114,000 12 1,368,000
Clock 230,000 4 920,000
Whiteboard 285,000 2 570,000
Fire Extinguisher 375,000 4 1,500,000
Telephone 180,000 11 1,980,000
Table 3. 8 Supporting facilities investment cost (con’d)
Equipment Price (Rp) Quantity Total Price (Rp)

Computer 5,000,000 15 75,000,000
34
Printer & Photocopy

8,550,000 2 17,100,000
Machine
Fax Machine 1,390,000 2 2,780,000
Air Conditioner 3,350,000 5 16,750,000
Projector Set 4,200,000 1 4,200,000
CCTV 1,430,000 18 25,740,000
Absence Machine 895,000 1 895,000
Long Neon Lamp 75,000 20 1,500,000
Dispenser 850,000 2 1,700,000
Wettability Tester 4,000,000 1 4,000,000
Generator 100,000,000 1 100,000,000
RO System 62,000,000 1 62,000,000
Plastic Drum 180,000 510 91,800,000
Truck ELF Isuzu Elf NKR
272,300,000 1 272,300,000
71HD
Truck Hino FG-235JP 580,000,000 1 580,000,000
TOTAL UTILITIES COST 737,688,000
Based on the calculation in Table 3.7, the total supporting facilites cost is
Rp 737,688,000.
d) Utilities Installation Cost
Utilities Installation Cost is a cost which is needed to provide utilities for
plant and office. Common utilities needed for plant is water and electricity, while
utilities for office include telephone, internet, and hydrants.
Table 3. 9 Utilities installation cost
Installation Note Cost (Rp)

Electricity PLN Cost in January 2016 for 6800 vA-
15,300,000
Installation 200kvA
Water Installation PDAM - Industri Kecil 36,115,500
Hydrants Installation Sprinkle hydrants 9,000,000
Network Installation Biznet Combo 5 500,000
Telephone
Telkom 2015 Business subscription 1,500,000
Installation
TOTAL UTILITIES INSTALLATION COST 62,415,500
35
e) Market Research Cost

Market Research is not needed in order to know the market situation before
we determine to sell and distribute our product.
f) Licensing Cost
Cost of patent registration and maintenance are regulated in Peraturan
Pemerintah No. 45 Tahun 2014. According to the law, the costs that are charged
to PT Sinnik Che for Greetor production are shown in Table 3.9.
Table 3. 10 Patent fee details
No. Non-Tax Revenue Unit Cost (Rp) Qty. Total (Rp)

1 Patent request Per request 750,000 1 750,000
2 Additional cost per claim Per request 50,000 3 150,000
Request for letter of
3 Per request 250,000 1 250,000
priority right evidence
4 Substantive inspection Per request 2,000,000 1 2,000,000
Cost for publishing Per
5 250,000 1 250,000
certificates certificate
Admission for liceso
6 thense agreement Per request 1,000,000 1 1,000,000
registration
Request for compulsory
7 Per request 3,000,000 1 3,000,000
licensing
Request for general list
8 Per request 150,000 60 9,000,000
excerpts of patents
Request for copies of
9 Per sheet 10,000 60 600,000
patent documents
TOTAL PATENT COST 17,000,000
Table 3.11 shows brand fee cost details which is also based on Peraturan
Pemerintah No. 45 Tahun 2014.
Table 3. 11 Brand Fee Details
Cost Total
No. Non-Tax Revenue Unit Qty.
(Rp) (Rp)
Request for trademark Per
1 600,000 1 600,000
registration request
Brand license publishing Per
2 150,000 1 150,000
costs certificate
36
License agreement Per

3 500,000 1 500,000
registration request
Request for official excerpt and written statement about the brand
a. Official excerpt
Per
request for brand 150,000 1 150,000
request
registration
b. Request for written
statement about the Per
4 200,000 1 200,000
similarity of a brand with request
the registered brand
c. Request for written
statement about the Per
200,000 1 200,000
similarity of a brand with request
the registered brand
Cost for proof of priority
Per
5 trademark application 250,000 1 250,000
request
copy
Registration of
6 intellectual property Individual 5,000,000 1 5,000,000
rights
TOTAL BRAND FEE COST 7,050,000
The summary of patent and brand fee calculation is shown in Table 3.11.
Table 3. 12 Licensing cost
Type of Fee Cost (Rp)

Patent Registration 17,000,000
Brand 7,050,000
TOTAL LICENSING COST 24,050,000
3.3.1.2 Indirect cost

The indirect cost includes the cost of engineering and supervision,
construction expense, contractor’s fee, and contigency. But, since our plant is a
37
chemical product plant, indirect cost that will be calculated only consists of
contractor’s fee, while the others are not taken in consideration for chemical
product plant. The contractor’s fee varies for different situations, but roughly it
presents in about 4-21 percent of building cost or 12.5 percent on average
Indirect Cost = 12.5% CTBM (3.5)
= 12.5% (2,275,000,000)
= RP284,375,000
3.1.2 Working Capital Investment
Working Capital Cost is the cost of production until the plant starts to get
income. The working capital for a chemical plant consists of the total amount of
money which is invested in raw materials and supplies carried in stock, receivable
accounts, cash kept on hand for monthly payment of operating expenses, such as
salaries, and payable taxes. The amount of inventory of the raw materials,which is
calculated in working capital, typically equals to one month supply of the raw
materials. Eq (3.6) shows a simple equation that can be used to calculate working
capital.
C working capital  1 / 12 x Operation Expenses (3.6)
C working capital  1 / 12 x Rp 7,130,801,090
Cworking capital = Rp 594,233,424.2

3.1.3 Total Capital Investment
After determining the working capital, the total capital investment can be
calculated from Eq (3.7).
CTCI  1,18CTBM  Csite  Cbuildings  Coffsite facilities   CWC
(3.7)
The calculation of total capital investment cost is shown in Table 2.12.
Table 2.13 shows total fixed capital cost. Figure 2.1 shows breakdown of total
capital investment cost.
38
Table 3. 13 Fixed capital cost calculation
Cost
Cost for Each
Type of Fixed Sub Type of Accumulation of
Sub Fixed
Capital Fixed Capital Each Type of
Capital (Rp)
Fixed Capital (Rp)
Total BM Cost 250,353,413.71
Land Cost 3,750,000,000
Building Cost 2,275,000,000
Direct Cost Supporting 7,099,506,914
737,688,000
Facilities Cost
Utilities Cost 62,415,500
Licensing Cost 24,050,000
Indirect Cost Contractor 31,294,176.71 31,294,176.71
Table 3. 14 TotalFixed capital cost calculation
Type of Fixed Capital Cost (Rp)
Totalfixedcapital invesment cost 7,130,801,090
Total working capital invesment 3,113,996,038

Total capital invesment 11,528,341,324
Figure 3.1 Breakdown of total capital investment cost

The cost of total capital investment is Rp 11,528,341,324. The value of
total capital investment shows the amount of money that will be spent as an early
capital investment at the beginning of the project. Based on the cost breakdown
above, the costs that give the biggest contribution is land cost (38%).
3.2 Operational Cost
Operational cost is the cost which is needed to operate a plant and distribute
the product.
39
3.2.1. Manufacturing Cost

3.2.1.1.Direct Production Cost
Manufacturing costs are costs which are required to support the production
process of Polysoil. The costs consists of raw material cost, utilities cost, direct
labor salary, maintenance cost, patent and brand registration cost, and fixed cost.
The detail of each cost will be explained further in the next section.
a. Raw Material
Raw material cost is the cost which is needed to buy all of the raw material
needed in the production process of Polysoil. There are fourraw materials that are
needed to be purchased from the supplier which are tannin extracts, potassium
iodide, water, and orange fragrance. The calculation of raw material (including
material for packaging cost) cost per year is shown in Table 3.14.
Table 3. 15 Calculation of raw material
Order / Year Total Delivery

Price per Total Order Cost
Raw Materials Supplier Location Cost per Year
Amount Unit Unit (Rp) per Year (Rp)
(Rp)
VeoVa 10
Vinyl Acetate
Methyl Methacrylate
Disponil LDBS 55
Ethoxylate Fatty Alcohol
Vinyl Sulfonate
Monoisobutyrate
BIT (Benzyl Isothiazolone)
MIT (Methyl Isothiazolone)

Sodium Acetate
Drum
TOTAL RAW MATERIAL COST - -
Based on the calculation in Table 2.14, the total raw material cost (including packaging cost) for Polysoil with the amount Rp
14,245,523,949 for total order cost per year and the amount of Rp 19,208,115,301 for total delivery cost per year.
a. Direct and Indirect Labor Salary

Greetor plant operates 8 hours per day and three days per week. The maximum working time for each labor is 24 hours per week.
Direct labors are labors who involve directly to the production process while indirect labors are those who aren’t involve directly to the
production process. Determination for the employees’ salary is based on the article published in Kompas regarding the Regional Minimum
Wage Policy. The Regional Minimum Wage on the province of Cilegon, Banten on 2016 is RP 3,078,057. The calculation of direct and
indirect labor cost is shown in Table 2.15 and Table 2.16.
42
Table 3. 16 Indirect Labor Wages
Salary per
Amount Total Salary
Department Position month per
(person) (Rp)
person (Rp)
President Director 1 12,000,000 144,000,000
General Manager 1 9,500,000 114,000,000
Stakeholder
Secretary of
1 7,500,000 90,000,000
President Director
Table 3. 17 Indirect Labor Wages (Cont’d)
Salary per
Amount Total Salary
Department Position month per
(person) (Rp)
person (Rp)
Finance Accounting
Finance 1 6,000,000 72,000,000
Manager
Department
Accounting Analyst 1 4,500,000 54,000,000
General Security 3 3,200,000 115,200,000
Support & Receptionist 2 3,200,000 76,800,000
Service Cleaning Service 4 3,200,000 153,600,000
Production
1 8,000,000 96,000,000
Coordinator
QC Manager 1 6,000,000 72,000,000
Production
Supply Chain
Department
Management 1 6,000,000 72,000,000
Manager
Logistic Manager 1 6,000,000 72,000,000
Human Resources
1 6,000,000 72,000,000
Manager
HRD
Human Resources
Department
Planning and 1 4,500,000 54,000,000
Recruitment
43
Coordinator
HES
HES Manager 1 7,500,000 90,000,000
Department
Sales and Marketing Manager 1 6,000,000 72,000,000

Marketing Sales Engineer 1 5,500,000 66,000,000
Department Sales / Promotor 2 4,500,000 108,000,000
Maintenance Electrical Engineer 1 6,000,000 72,000,000
Department Mechanical 1 6,000,000 78,000,000

Engineer
TOTAL INDIRECT LABOR COST 1,743,600,000
Based on the calculation in Table 2.15 and Table 2.16, the total cost for direct
labors is RP 576,000,000 and the total cost for indirect labors is Rp
1,743,600,000.
b. Utility
Utility is a system that generates, transmits, or distributes electricity, water,
or steam of plant’s facilities. Variable utility costs are costs for utilities which are
used during the production process. Fixed utility costs are costs for utilities which
are used for adminstration process and do not depend on the activity and amount
of production. The utilities which are used in this plant consists of water and
electricity which are used during the production process.
The cost of electricity used for the main production process relates to the
process and acitvities of the plant. Electricity in Greetor plant is supplied directly
from PLN. The data for electricity cost is obtained from PLN website shows in
Table 2.17
Table 3. 18 Tariff adjustment in May 2016
Usage Cost
No. Tariff Group Power Limit
(Rp/kWh)
1 R-1/TR 1300 VA 1353.45
2 R-1/TR 2200 VA 1353.45
44
3 R-2/TR 3500 - 5500 VA 1353.45

4 R-3/TR > 6600 VA 1353.45
6600 VA - 200
5 B-2/TR kVA 1353.45
6 B-3/TM > 200 kVA 1041.07
7 I-3/TM > 200 kVA 1055.47
8 I-4/TT > 30,000 kVA 931.99
6600 VA - 200
1353
9 P-1/TR kVA
10 P-2/TM > 200 kVA 1041.07
11 P-3/TR - 1353.45
12 L/TR, TM, TT - 1529.73
(Source: PLN, http://www.pln.co.id/wp-content/uploads/2016/05/Tariff-Adjustment-Mei-2016.)
The factory can be classified in I-3/TM group since the factory can be
categorized as middle scale industry. Based on the tariff above, the usage cost per
kWh is Rp 1,055.47. The calculation of electricity needs for the main equipments
and supporting equipments are shown in Table 2.18 and Table 2.19 (working time
for the main equipments is calculated with the base of 4 days or one production
cycle).
Table 3. 19 Electricity Needs For Main Equipments
Working Total Total Total

Power
Equipments Qty Time/week Power/week Power/year Cost/year
(kW)
(h) (kWh) (kWh) (Rp)
Mixer 2 2 25 100 5,200 5,488,444
Heater 2 4 25 200 10,400 10,976,888
Pump 1 0.74 12 8.88 462 487,374
Filler
1 1 5 5 260 274,422
Machine
TOTAL ELECTRICITY COST FOR MAIN EQUIPMENTS 17,227,128
45
Table 3. 20 Electricity Needs For Supporting Equipments
Working Total Total Total

Power
Equipments Qty Time/day Power/day Power/year Cost/year
(kW)
(h) (kWh) (kWh) (Rp)
Computer 15 0.3 9 40.5 14,783 15,602,485
Printer &
Photocopy 2 0.5 9 9 3,285 3,467,219
Machine
Fax Machine 2 0.02 9 0.36 131 138,689
Air
5 0.75 9 33.75 12,319 13,002,071
Conditioner
Projector Set 1 0.2 3.6 0.72 263 277,378
CCTV 18 0.025 24 10.8 3,942 4,160,663
Absence
1 0.75 24 18 6,570 6,934,438
Machine
Long Neon
20 0.018 9 3.24 1,183 1,248,199
Lamp
Dispenser 2 0.35 24 16.8 6,132 6,472,142
Wettability
1 0.25 2 0.5 183 192,623
Tester
RO System 1 0.5 9 4.5 1,643 1,733,609
TOTAL ELECTRICITY COST FOR SUPPORTING
EQUIPMENTS
Based on the calculation in Table 3.19 and Table 3.20, the total cost of
electricity needs for main equipments is Rp 17,227,128 and for supporting
equipments is Rp 53,229,516.
Water needs in Greetor plant is obtained directly form PDAM located in
Cilegon. Process water needs determination is done based on the water needs for
washing the equipments. Based on Kemenperin data, the amount of process water
needs is 0,5 L/h.m2 each day. On the other hand, employees also have a need of
water every day. WHO data shows that each person needs around 40 L water per
46
day for the purpose of drinking and toilets. Based on article in Tribun News
website, the price of water is Rp 12,550.00 per m3. Therefore, the calculation of
water needs in Greetor plant is shown in Table 2.20
Table 3. 21 Water needs in Greetor plant
Water Needs L/ day m3/year Total Utilities Cost for Water / year (Rp)
Process utility 3,600 1314 16,490,700
Employee 1680 613.2 7,695,660
TOTAL WATER COST PER
24,186,360
YEAR (Rp)
Based on the calculation above, the cost of utilities which included the
electricity and water needs anually is :
Total utility cost = total electricity cost + total water cost (2.8)
= Rp (17,227,128 + 53,229,516) + Rp 24,186,360
= Rp 94,643,004
c. Maintenance Cost
Maintenance is the activity to preserve or maintain the plant along with its
facilities including the equipments which are involved in the production process
by repairing, adjusting, or replacing some of their components. Maintenance is an
activitiy that must be done to keep obtaining the desired production capacity to
fulfill the demand of consumer.
To keep the efficiency of the equipment and building in the plant,
maintenance process must be done. The maintenance process will take some times
and needs cost. Maintenance activities may include the act of inspecting,
lubricating the equipment, replacement of equipments’ components which are
needed to be done in a certain period of time.
Maintenance process consists of three main parts, i.e. major equipments
maintenance, plant and office building maintenance, and supporting equipment
maintenance. According to Kusuma, the average equipment maintenance cost for
food industry reach the number of 15% of total production cost. The calculation of
maintenance cost based on those information is shown in Table 2.21.
47
Table 3. 22 Maintenance Cost
Cost per
Maintenance Amount (percentage)
Year (Rp)
Main equipments 15 % of Total Bare Module Cost 37,553,012
Supporting equipments 3% of Supporting Facilities Cost 22,130,640
Land and building 1% of Land and Building Cost 60,250,000
TOTAL MAINTENANCE COST PER YEAR (Rp) 119,933,652
d. Patent and Brand Registration

To create a legally distributed product in public, we need to make patent and
brand for copyright and registered in the law. Patent and brand registration will
include patent, copyright, industrial design, and brand.
 Patent
A patent is a set of exclusive rights which is granted to the inventor from the
sovereign state for a certain or limited period of time. Patent will make a product
legal based on law. Because patent right is limited for a certain period of time,
there will be a certain cost that should be paid for every year. The calculation of
patent’s cost for the next 10 years is shown in Table 3.23.
Table 3. 23 Patent Registration Cost
Patent Cost (Rp)

Year 2 850,000
Year 3 850,000
Year 4 850,000
Year 5 1,300,000
Year 6 1,950,000
Year 7 2,600,000
Year 8 3,250,000
Year 9 4,250,000
Year 10 5,750,000
48
TOTAL 21,650,000
(Source : Peraturan Pemerintah No. 45 Tahun 2014)
 Copyright
Copyright is an exclusive rights for inventor to announce or to copy the
invention. Copyright registration and maintenance of Greetor should also be done
to make the product legal in the law. The calculation of copyright’s cost is shown
in Table 2.23.
Table 3. 24 Copyright Registration Cost
Copyright Cost (Rp)

Copyright Registration 200,000
Copyright Certificate Publishing
100,000
Cost
Copyright Quotes Registration 50,000
Copyright License Administration 75,000
TOTAL 425,000
 Industrial Design
Industrial design is the right of composition, configuration, line, and colour of
a design that has aesthethical value. The calculation of industrial design’s cost is
shown in Table 2.24.
Table 3. 25 Industrial Design Cost
Cost
Copyright
(Rp)
Industrial Design Registration 600,000
Industrial Design General List of Quotes
150,000
Request
Industrial Design Certificate Publishing
150,000
Cost
Industrial Design Priority Document
150,000
Request
Industrial Design Copy of Document
150,000
Request
Industrial Design License Administration 250,000
TOTAL 1,450,000
49
 Brand
Brand is an identity of a product that can differentiate it from another existing
product. We need to register our brand to the sovereign state so that the brand will
be legal in the law. The detail of brand cost calculation is shown in Table 3.26.
Table 3. 26 Brand Registration Cost
Copyright Cost (Rp)

Brand Publishing Cost 600,000
Lengthening Time of Brand Protection 2,000,000
Brand Certificate Publishing Cost 200,000

License Administration 500,000
Official Brand Quotes Request 200,000
Written Notes of General List of Brand
200,000
Request
TOTAL 3,700,000
(Source : Peraturan Pemerintah No.45 Tahun 2014)
Based on these calculation, the cost needed for patent and brand
registration is Rp 25,350,000.00.
e. Fixed Cost
Fixed costs are costs which are not influenced by the amount of production
and tend to keep each year,
 Depreciation
Every purchased equipments, whether it’s main or supporting equipment, has
a life time value. Depreciation is defined as a measure of decrease in value of
something over time. Some companies use depreciation as a means to set aside a
fund to replace a plant when it is no longer operable. In its most complex
application, depreciation is an annual allowance, whose calculation is controlled
by the government when determining federal income tax. The larger the
depreciation in a given year, the smaller the federal income tax and the greater the
net profit.
There are some methods that can be used to calculate the depreciation of
plant’s assets. For the further calculation, we will use declining – balance method.
50
Declining – balance methode is a method for depreciation calculation which uses f

factor to the value of properties each year. The equation which is used to
determine the amount of depreciation in this method is shown as follows.
D1  Vi . f (2.9)
SV  Vi 1  f 
n
(2.10)
In this calculation, we will use the value of f factor in the amount of 0,1
(10%). From this calculation, we can know the amount depreciation (D) and
salvage value (SV) for each year. Salvage value is the amount of money that still
can be obtained by selling the equipment that still has a certain value at the end of
its life expectancy. The details of depreciation are shown in the following tables.
Table 3. 27 Depreciation calculation for main equipments
Initial
Year 1 Year 2 Year 3 Year 4 Year 5
Equipments Value
(Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp)
Liquid Storage
2,902,183 290,218 2,611,965 261,196.46 2,350,768 235,076.82 2,115,691 211,569.14 1,904,122 190,412.22 1,713,710
Tank
Blending &
105,579,192 10,557,919 95,021,273 9,502,127.26 85,519,145 8,551,914.54 76,967,231 7,696,723.08 69,270,508 6,927,050.77 62,343,457
Mixing Machine
Filling Machine 123,725,615 12,372,562 111,353,054 11,135,305.39 100,217,748 10,021,774.85 90,195,974 9,019,597.36 81,176,376 8,117,637.63 73,058,739
Centrifugal Pump 18,146,424 1,814,642 16,331,781 1,633,178.12 14,698,603 1,469,860.31 13,228,743 1,322,874.28 11,905,869 1,190,586.85 10,715,282
TOTAL
25,035,341 22,531,807 20,278,627 18,250,764 16,425,687
DEPRECIATION
Table 3. 28 Depreciation calculation for main equipments (cont’d)
Initial
Equipments Value
Liquid Storage Tank 2,902,183 171,371.00 1,542,339 154,233.90 1,388,105 138,810.51 1,249,295 124,929.46 1,124,365 112,436.51 1,011,929
Blending & Mixing
105,579,192 6,234,345.70 56,109,111 5,610,911.13 50,498,200 5,049,820.01 45,448,380 4,544,838.01 40,903,542 4,090,354.21 36,813,188
Machine
Filling Machine 123,725,615 7,305,873.86 65,752,865 6,575,286.48 59,177,578 5,917,757.83 53,259,820 5,325,982.05 47,933,838 4,793,383.84 43,140,455
Centrifugal Pump 18,146,424 1,071,528.17 9,643,753 964,375.35 8,679,378 867,937.81 7,811,440 781,144.03 7,030,296 703,029.63 6,327,267
TOTAL
14,783,119 13,304,807 11,974,326 10,776,894 9,699,204
DEPRECIATION
Table 3. 29 Depreciation Calculation For Supporting Equipments
Initial
Equipments Value
Receptionist
3,575,000 357,500 3,217,500 321,750.00 2,895,750 289,575.00 2,606,175 260,617.50 2,345,558 234,555.75 2,111,002
Desk & Chair
Meeting Desk &
5,100,000 510,000 4,590,000 459,000.00 4,131,000 413,100.00 3,717,900 371,790.00 3,346,110 334,611.00 3,011,499
Chair
Office Desk &
20,250,000 2,025,000 18,225,000 1,822,500.00 16,402,500 1,640,250.00 14,762,250 1,476,225.00 13,286,025 1,328,602.50 11,957,423
Chair
Pantry Set 2,200,000 220,000 1,980,000 198,000.00 1,782,000 178,200.00 1,603,800 160,380.00 1,443,420 144,342.00 1,299,078
Toilet Set 6,000,000 600,000 5,400,000 540,000.00 4,860,000 486,000.00 4,374,000 437,400.00 3,936,600 393,660.00 3,542,940
Janitor Set 1,500,000 150,000 1,350,000 135,000.00 1,215,000 121,500.00 1,093,500 109,350.00 984,150 98,415.00 885,735
Filling Cabinet 11,500,000 1,150,000 10,350,000 1,035,000.00 9,315,000 931,500.00 8,383,500 838,350.00 7,545,150 754,515.00 6,790,635
Sofa 5,460,000 546,000 4,914,000 491,400.00 4,422,600 442,260.00 3,980,340 398,034.00 3,582,306 358,230.60 3,224,075
Trashbin 1,368,000 136,800 1,231,200 123,120.00 1,108,080 110,808.00 997,272 99,727.20 897,545 89,754.48 807,790
Clock 920,000 92,000 828,000 82,800.00 745,200 74,520.00 670,680 67,068.00 603,612 60,361.20 543,251
Whiteboard 570,000 57,000 513,000 51,300.00 461,700 46,170.00 415,530 41,553.00 373,977 37,397.70 336,579
Fire
1,500,000 150,000 1,350,000 135,000.00 1,215,000 121,500.00 1,093,500 109,350.00 984,150 98,415.00 885,735
Extinguisher
Telephone 1,980,000 198,000 1,782,000 178,200.00 1,603,800 160,380.00 1,443,420 144,342.00 1,299,078 129,907.80 1,169,170
Computer 75,000,000 7,500,000 67,500,000 6,750,000.00 60,750,000 6,075,000.00 54,675,000 5,467,500.00 49,207,500 4,920,750.00 44,286,750
Printer &
Photocopy 17,100,000 1,710,000 15,390,000 1,539,000.00 13,851,000 1,385,100.00 12,465,900 1,246,590.00 11,219,310 1,121,931.00 10,097,379
Machine
Fax Machine 2,780,000 278,000 2,502,000 250,200.00 2,251,800 225,180.00 2,026,620 202,662.00 1,823,958 182,395.80 1,641,562
Air
16,750,000 1,675,000 15,075,000 1,507,500.00 13,567,500 1,356,750.00 12,210,750 1,221,075.00 10,989,675 1,098,967.50 9,890,708
Conditioner
Table 3.29 Depreciation Calculation for Supporting Equipments (Cont’d)
Initial
Equipments Value
Receptionist
3,575,000 211,100.18 1,899,902 189,990.16 1,709,911 170,991.14 1,538,920 153,892.03 1,385,028 138,502.82 1,246,525
Desk & Chair
Meeting Desk &
5,100,000 301,149.90 2,710,349 271,034.91 2,439,314 243,931.42 2,195,383 219,538.28 1,975,844 197,584.45 1,778,260
Chair
Office Desk &
20,250,000 1,195,742.25 10,761,680 1,076,168.03 9,685,512 968,551.22 8,716,961 871,696.10 7,845,265 784,526.49 7,060,738
Chair
Pantry Set 2,200,000 129,907.80 1,169,170 116,917.02 1,052,253 105,225.32 947,028 94,702.79 852,325 85,232.51 767,093
Toilet Set 6,000,000 354,294.00 3,188,646 318,864.60 2,869,781 286,978.14 2,582,803 258,280.33 2,324,523 232,452.29 2,092,071
Janitor Set 1,500,000 88,573.50 797,162 79,716.15 717,445 71,744.54 645,701 64,570.08 581,131 58,113.07 523,018
Filling Cabinet 11,500,000 679,063.50 6,111,572 611,157.15 5,500,414 550,041.44 4,950,373 495,037.29 4,455,336 445,533.56 4,009,802
Sofa 5,460,000 322,407.54 2,901,668 290,166.79 2,611,501 261,150.11 2,350,351 235,035.10 2,115,316 211,531.59 1,903,784
Trashbin 1,368,000 80,779.03 727,011 72,701.13 654,310 65,431.02 588,879 58,887.91 529,991 52,999.12 476,992
Clock 920,000 54,325.08 488,926 48,892.57 440,033 44,003.31 396,030 39,602.98 356,427 35,642.68 320,784
Whiteboard 570,000 33,657.93 302,921 30,292.14 272,629 27,262.92 245,366 24,536.63 220,830 22,082.97 198,747
Fire
1,500,000 88,573.50 797,162 79,716.15 717,445 71,744.54 645,701 64,570.08 581,131 58,113.07 523,018
Extinguisher
Telephone 1,980,000 116,917.02 1,052,253 105,225.32 947,028 94,702.79 852,325 85,232.51 767,093 76,709.26 690,383
Computer 75,000,000 4,428,675.00 39,858,075 3,985,807.50 35,872,268 3,587,226.75 32,285,041 3,228,504.08 29,056,537 2,905,653.67 26,150,883
Printer &
Photocopy 17,100,000 1,009,737.90 9,087,641 908,764.11 8,178,877 817,887.70 7,360,989 736,098.93 6,624,890 662,489.04 5,962,401
Machine
Fax Machine 2,780,000 164,156.22 1,477,406 147,740.60 1,329,665 132,966.54 1,196,699 119,669.88 1,077,029 107,702.90 969,326
Air
16,750,000 989,070.75 8,901,637 890,163.68 8,011,473 801,147.31 7,210,326 721,032.58 6,489,293 648,929.32 5,840,364
Conditioner
Initial Year 1 Year 2 Year 3 Year 4 Year 5

Equipments
Value (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp)
Projector Set 4,200,000 420,000 3,780,000 378,000.00 3,402,000 340,200.00 3,061,800 306,180.00 2,755,620 275,562.00 2,480,058
CCTV 25,740,000 2,574,000 23,166,000 2,316,600.00 20,849,400 2,084,940.00 18,764,460 1,876,446.00 16,888,014 1,688,801.40 15,199,213
Absence
895,000 89,500 805,500 80,550.00 724,950 72,495.00 652,455 65,245.50 587,210 58,720.95 528,489
Machine
Long Neon
1,500,000 150,000 1,350,000 135,000.00 1,215,000 121,500.00 1,093,500 109,350.00 984,150 98,415.00 885,735
Lamp
Dispenser 1,700,000 170,000 1,530,000 153,000.00 1,377,000 137,700.00 1,239,300 123,930.00 1,115,370 111,537.00 1,003,833
Wettability
4,000,000 400,000 3,600,000 360,000.00 3,240,000 324,000.00 2,916,000 291,600.00 2,624,400 262,440.00 2,361,960
Tester
Generator 100,000,000 10,000,000 90,000,000 9,000,000.00 81,000,000 8,100,000.00 72,900,000 7,290,000.00 65,610,000 6,561,000.00 59,049,000
RO System 62,000,000 6,200,000 55,800,000 5,580,000.00 50,220,000 5,022,000.00 45,198,000 4,519,800.00 40,678,200 4,067,820.00 36,610,380
Plastic Drum 91,800,000 9,180,000 82,620,000 8,262,000.00 74,358,000 7,435,800.00 66,922,200 6,692,220.00 60,229,980 6,022,998.00 54,206,982
Truck ELF
Isuzu Elf 272,300,000 27,230,000 245,070,000 24,507,000.00 220,563,000 22,056,300.00 198,506,700 19,850,670.00 178,656,030 17,865,603.00 160,790,427
NKR 71HD
Truck Hino
580,000,000 58,000,000 522,000,000 52,200,000.00 469,800,000 46,980,000.00 422,820,000 42,282,000.00 380,538,000 38,053,800.00 342,484,200
FG-235JP
TOTAL
DEPRECIA 20,758,800 18,682,920 16,814,628 15,133,165 13,619,849
TION
Initial Year 6 Year 7 Year 8 Year 9 Year 10

Equipments
Value (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp)
Projector Set 4,200,000 248,005.80 2,232,052 223,205.22 2,008,847 200,884.70 1,807,962 180,796.23 1,627,166 162,716.61 1,464,449
CCTV 25,740,000 1,519,921.26 13,679,291 1,367,929.13 12,311,362 1,231,136.22 11,080,226 1,108,022.60 9,972,203 997,220.34 8,974,983
Absence
895,000 52,848.86 475,640 47,563.97 428,076 42,807.57 385,268 38,526.82 346,741 34,674.13 312,067
Machine
Long Neon
1,500,000 88,573.50 797,162 79,716.15 717,445 71,744.54 645,701 64,570.08 581,131 58,113.07 523,018
Lamp
Dispenser 1,700,000 100,383.30 903,450 90,344.97 813,105 81,310.47 731,794 73,179.43 658,615 65,861.48 592,753
Wettability
4,000,000 236,196.00 2,125,764 212,576.40 1,913,188 191,318.76 1,721,869 172,186.88 1,549,682 154,968.20 1,394,714
Tester
Generator 100,000,000 5,904,900.00 53,144,100 5,314,410.00 47,829,690 4,782,969.00 43,046,721 4,304,672.10 38,742,049 3,874,204.89 34,867,844
RO System 62,000,000 3,661,038.00 32,949,342 3,294,934.20 29,654,408 2,965,440.78 26,688,967 2,668,896.70 24,020,070 2,402,007.03 21,618,063
Plastic Drum 91,800,000 5,420,698.20 48,786,284 4,878,628.38 43,907,655 4,390,765.54 39,516,890 3,951,688.99 35,565,201 3,556,520.09 32,008,681
Truck ELF
Isuzu Elf 272,300,000 16,079,042.70 144,711,384 14,471,138.43 130,240,246 13,024,024.59 117,216,221 11,721,622.13 105,494,599 10,549,459.92 94,945,139
NKR 71HD
Truck Hino
580,000,000 34,248,420.00 308,235,780 30,823,578.00 277,412,202 27,741,220.20 249,670,982 24,967,098.18 224,703,884 22,470,388.36 202,233,495
FG-235JP
TOTAL
DEPRECIA 12,257,864 11,032,077 9,928,870 8,935,983 8,042,384
TION
Table 3. 30 Depreciation Calculation For Building And Facilities
Initial Value Year 1 Year 2 Year 3 Year 4

Equipments
(Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp)
Building 1,600,000,000 160,000,000 1,440,000,000 144,000,000.00 1,296,000,000 129,600,000.00 1,166,400,000 116,640,000.00 1,049,760,000
TOTAL
DEPRECIAT 160,000,000 144,000,000 129,600,000 116,640,000
ION
Table 3.30 Depreciation Calculation for Building and Facilities (Cont’d)
Initial Value Year 5 Year 6 Year 7

Equipments
(Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp)
Building 1,600,000,000 104,976,000.00 944,784,000 94,478,400.00 850,305,600 85,030,560.00 765,275,040
TOTAL DEPRECIATION 104,976,000 94,478,400 85,030,560
Table 3.30 Depreciation Calculation for Building and Facilities (Cont’d)
Initial Value Year 8 Year 9 Year 10

Equipments
(Rp) D (Rp) SV (Rp) D (Rp) SV (Rp) D (Rp) SV (Rp)
Building 1,600,000,000 76,527,504.00 688,747,536 68,874,753.60 619,872,782 61,987,278.24 557,885,504
TOTAL DEPRECIATION 76,527,504 68,874,754 61,987,278
57
Based on the calculation above, the total depreciation for a life expectancy
of 10 year is shown in the following Table 3.31.
Table 3. 31 Total Depreciation Cost For 10 Years Of Life Expectancy
Year Depreciation (Rp)

1 205,794,141
2 185,214,727
3 166,693,255
4 150,023,929
5 135,021,536
6 121,519,383
7 109,367,444
8 98,430,700
9 88,587,630
10 79,728,867
TOTAL DEPRECIATION 1,340,381,612
 Local Tax
Local tax contains building tax and salary tax. Building tax is not only for
the building but also the land. The value is calculated by using method that is
ruled in government’s law. Table 3.32 show us the calculation of building tax in
Indonesia.
Table 3. 32 Cost For Building Tax
Description Area (m2) Price (Rp) Total Price (Rp)

NJOP Earth 1000 3,750,000 3,750,000,000
NJOP Building 800 2,000,000 1,600,000,000
Total NJOP 5,350,000,000
NJOPTKP 12,000,000
NJOP for PBB 5,338,000,000
NJKP (40% NJOP) 2,135,200,000
Debted PBB (0.5 NJKP) 10,676,000
Every person which works need to pay the salary tax that is suitable with
their salary. The rate of the tax varies with the sum of the salary in a year. The
58
calculation of salary tax in Indonesia is stated in the UU No. 36 Year 2008. Table
2.31 shows the calculation of salary tax for our employees.
Table 3. 33 Direct Labor Salary Tax
Amount Salary per month Bruto Position Net Income Net Income Taxable Salary Tax Per
Position Insurance
(person) per person (Rp) Income Cost per Month per Year Income Year
President Director 1 12,000,000 360,000 12,360,000 618,000 11,742,000 152,646,000 102,646,000 5,132,300
General Manager 1 9,500,000 285,000 9,785,000 489,250 9,295,750 120,844,750 94,509,750 4,725,488
Secretary of President Director 1 7,500,000 225,000 7,725,000 386,250 7,338,750 95,403,750 69,068,750 3,453,438
Finance Accounting Manager 1 6,000,000 180,000 6,180,000 309,000 5,871,000 76,323,000 49,988,000 2,499,400
Accounting Analyst 1 4,500,000 135,000 4,635,000 231,750 4,403,250 57,242,250 30,907,250 1,545,363
Security 3 3,200,000 96,000 3,296,000 164,800 3,131,200 40,705,600 14,370,600 2,155,590
Receptionist 2 3,200,000 96,000 3,296,000 164,800 3,131,200 40,705,600 14,370,600 1,437,060
Cleaning Service 4 3,200,000 96,000 3,296,000 164,800 3,131,200 40,705,600 14,370,600 2,874,120
Production Coordinator 1 8,000,000 240,000 8,240,000 412,000 7,828,000 101,764,000 75,429,000 3,771,450
QC Manager 1 6,000,000 180,000 6,180,000 309,000 5,871,000 76,323,000 49,988,000 2,499,400
Supply Chain Management
1 6,000,000 180,000 6,180,000 309,000 5,871,000 76,323,000 49,988,000 2,499,400
Manager
Logistic Manager 1 6,000,000 180,000 6,180,000 309,000 5,871,000 76,323,000 49,988,000 2,499,400
Human Resources Manager 1 6,000,000 180,000 6,180,000 309,000 5,871,000 76,323,000 49,988,000 2,499,400
Human Resources Planning and

1 4,500,000 135,000 4,635,000 231,750 4,403,250 57,242,250 30,907,250 1,545,363
Recruitment Coordinator
225,000 7,725,000 386,250 7,338,750 95,403,750 69,068,750 3,453,438

HES Manager 1 7,500,000
0 0 0 0 0 -26,335,000 0
Table 3.33 Direct labor salary tax (cont’d)
Amount Salary per month Bruto Position Net Income Net Income Taxable
Position Insurance Salary Tax Per Year
(person) per person (Rp) Income Cost per Month per Year Income
Marketing Manager 1 6,000,000 180,000 6,180,000 309,000 5,871,000 76,323,000 49,988,000 2,499,400
Sales Engineer 1 5,500,000 165,000 5,665,000 283,250 5,381,750 69,962,750 43,627,750 2,181,388
Sales / Promotor 2 4,500,000 135,000 4,635,000 231,750 4,403,250 57,242,250 30,907,250 3,090,725
Electrical Engineer 1 6,000,000 180,000 6,180,000 309,000 5,871,000 76,323,000 49,988,000 2,499,400
Mechanical Engineer 1 6,000,000 180,000 6,180,000 309,000 5,871,000 76,323,000 49,988,000 2,499,400
Total Tax Salary 55,360,920
61
 Insurance
Insurance is the cost which is paid by cooperated insurance company to the
worker. Insurance is needed as a way to protect the assets of company, including
variable assets and fixed assets. The paid insurance includes the insurance for cost
of plant and employee’s insurance. The data for employees’ insurance is obtained
from Jamsostek (Jaminan Pemeliharaan Kesehatan). It is said that the company
should pay at least 3% of the worker wages (and the maximum amount is one
million rupiah) monthly to follow this insurance programme.
Table 3. 34 Annual Insurance Cost
Annual Cost
Insurance Type Measurement Amount (Rp)
(Rp)
Plant Insurance 0.5% of Fc Cost 7,130,801,090 35,654,005
Employee's
3% of Salary 2,319,600,000 69,588,000
Insurance
Total Insurance 105,242,005
3.2.2. General Expense
General expense is an expenses related to the routine expenses of a plant
office to support the operational activity of the plant. The component in general
expenses are communication cost, annual research and development cost, annual
distribution cost, and annual financial interest cost for 10 years of life expectancy.
a. Communication Cost
The calculation of communication cost is shown in Table 3.35.
Table 3. 35 Total Communication Cost
Communication Type Cost (Rp) Note

Telephone 5,000,000 Telkom
Internet Connection 2,400,000 Biznet
TOTAL COMMUNICATION
7,400,000
COST
62
b. Distribution Cost
Distribution cost is a cost which is needed to distribute the products.
Distribution cost is influenced by the distribution plan developed in supply chain.
The distribution cost can be divided into cost from plant to distribution center and
cost from distribution center to wholesaler. The distribution area of Greetor is
divided into two main region throughout Java and Sumatra island. The division of
the region is done as follows.
 Region I covers area of West Java and East Java and surrounding areas.
 Region II covers area of D.I. Aceh, Riau, South Sumatra, and surrounding
areas.
The distribution of our product can be done with shipping to the
consumer’s plant site. The distribution cost includes handling cost of inventory at
all points for example in the plant area, storehouse, or even sales point. The
calculation for the distribution of Greetor is shown in Table 3.36.
Table 3. 36 Distribution Cost of Product
Solar Cost per Total Cost

Distance
Route Pathway Frequency Consumption Travel per Year
(km)
(L) (Rp) (Rp)
Plant to Merak Once every
Land 26 5 28,380 408,672
Harbour 30 days
Bakaueni Harbour
to Simpang Y and Once every
Land 880 176 968,000 13,939,200
Prabumulih (South 30 days
Sumatera)
Plant to Sukabumi Once every
Land 432 86 475,200 29,652,480
(West Java) week
Plant to Gresik Once every
Land 1,704 341 1,874,400 26,991,360
(East Java) 30 days
Belawan Harbour to
Once every
Pangkalan Brandan Land 158 32 173,800 2,502,720
30 days
(North Sumatera)
Belawan Harbour to Once every
Land 926 185 1,018,600 14,667,840
D.I. Aceh 30 days
63
Table 3.36 Distribution cost of Product (con’d)

Solar Cost per
Distance Total Cost per
Route Pathway Frequency Consumption Travel
(km) Year (Rp)
(L) (Rp)
Merak Harbour to Once every

Marine - - 327,000 3,924,000
Bakaheuni Harbour 30 days
Merak Harbour to Once every

Marine - - 1,800,000 21,600,000
Belawan Harbour 30 days
Toll Fee 24,000,000
TOTAL DISTRIBUTION COST 113,686,272
c. Marketing Cost
The purpose of marketing is to introduce a product to the consumers or to
catch the attention of consumers. Marketing is also used to maintain the image
and to sell a certain brand. Before determining the marketing cost, we must
develop and arrange a marketing strategy for our product. One of the best ways to
get consumers’ attention is by advertising. From advertisement, consumer will
gain some informations regarding our product. An advertisment can be
categorized as good advertisement based on its effectiveness. For the
advertisement, we choose two main media, printed media and electronic media.
 Printed Media
Printed media is the commonly used media for advertisement. For the printed
media we use booklet and flyer because it is more compromising. The calculation
of printed media publication fee is shown in Table 3.37.
Table 3. 37 Cost of Printed Media Publication
Total Cost
Printed Media Type Size
(Rp)
Booklet Full colour A5 5,000,000
64
 Electronic Media
Electronic media can also help us to advertise our product. Nowadays,
most people’s activity utilize the usage of internet. Therefore, we choose to
advertise our product through this media. We will develop a particular website
that can help us to introduce Greetor spesifically to the consumers. The
calculation of electronic publication media fee is shown in Table 2.37 and Table
3.38.
Table 3. 38 Cost of Online Advertisement Through Website
Time Price / Price / year

Web Address
(Adv/day) day (Rp) (Rp)
Google Adsense - Free Free
Social Media (Fanspage, FB,
- Free Free
Twitter)
iklan-gratis.com - Free Free
www.detik.com 30 50,000 540,000,000
TOTAL ONLINE ADVERTISEMENT COST 540,000,000
Table 3. 39 Cost of Website Development
Types Cost / year (Rp)

Creating Website Cost 600,000
Design Website Cost 600,000
Annual Cost 1,000,000
TOTAL WEBSITE DEVELOPMENT COST 2,200,000
Based on the calculation of marketing cost for Greetor in two different media
(printed media and electronic media), the amount of cost marketing is Rp
1,180,480,000.
3.3 Economic Analysis
3.3.1 Capital Loan
In order to build out plant and start to produce Greetor, we need money to
be invested. we’ve decided that our investment will be 100% from bank loan. The
65
reason of this configuration is based on a consideration that bank interest rate is

lower than the investor interest rate.
We decide to borrow the money from Bank of Central Asiabecause it
provides a more secure and stable loan rates than the others bank. We also lend
money from investor because bank can only provide 70% of total capital
investment. Moreover, the loan rates in BCA is relatively low, compared to the
others. The interest rate is 10%. And investor intrest rate is 9%. Table 2.38 shows
the cashflow of bank loan.
Table 3. 40 Cashflow of Bank Loan
Total Loan after

Loan Payment
Year Initial Loan Payment Payment
Interest (Rp) (Rp)
(Rp) (Rp)
0 11,475,567,991 11,475,567,991
1 11,475,567,991 1,113,130,095 2,295,113,598 3,408,243,693 9,180,454,393
2 9,180,454,393 890,504,076 2,295,113,598 3,185,617,674 6,885,340,795
3 6,885,340,795 667,878,057 2,295,113,598 2,962,991,655 4,590,227,196
4 4,590,227,196 445,252,038 2,295,113,598 2,740,365,636 2,295,113,598
5 2,295,113,598 222,626,019 2,295,113,598 2,517,739,617 0
3.3.2 Product Pricing Per Unit

The outcome of our company for 10 years of plant life is Rp
367,346,724,510 with financial interest of Rp 3,339,390,285. To ensure that we
can cover all the expenses, capital cost and the financial interest, we sum up all
the expenses for 10 years plant life and then divide it by the total production for
10 years to get single product price. The calculation of product price is shown in
Table 3.41.
Table 3. 41 Product Price Calculation
OPEX for 10 Years Rp367,346,724,510

Total Depreciation Rp1,340,381,611
Maintenance Rp1,199,336,520
66
Table 3.41 Product price calculation (con’d)

Interest Rp3,339,390,285
Total Outcome Rp373,225,832,928
10 years Production
59,400
Capacity
Minimum Price Per Unit Rp6,283,263
Based on the calculation above, the minimum price of our product is Rp

Rp6,283,263. With a marginal advantage of 20%, the renewed price of our
product is Rp 7,600,000/L drum consist of 200L Polysoil (netto).
3.3.3 Cash Flow
In order to make the incomes and expenses are more visible, we use cash
flow to depict money flows annually. The cashflow consists of incomes and
expenses or outcomes. Incomes are positive flow of money which represents
revenue, before tax income, after tax income, and salvage value, whereas
expenses are negative flow of money which represents first investment, operating
cost, loan payment, and interest payment. Because our product is brand new
product that hasn’t been known by the market while there are so many
competitors in thickener and stabiliser for foods and beverages market, we assume
that at the first year, when our product enters the market it will only be sold 80%
of the total production. The second year, our product will be known more because
of the adverstisement and reviews from consumers, so that it will be sold 90% of
total production and hopefully the third year onward, it will be sold 100% of total
production. The figures 2.2 and table 2.40 show the calculation of Greetor cash
flow.
67
Cash Flow
10,000,000,000
5,000,000,000
-
1 2 3 4 5 6 7 8 9 10 11
(5,000,000,000)
(10,000,000,000)
(15,000,000,000)
Series2 Series1
Figure 3. 1 BTCF and ATCF Cash flow of Greetor plant
Figure 3.1 shows us about our product BTCF and ATCF cash flow that
will be increase and balance in year of 4.
Table 3. 42 Cash Flow (Prices Are in Million Rupiahs)
Volume Product Operating Maintenance Cash Loan All Gross Cummulative

Year Sold Price Revenue Expenses Cost Depreciation Expenses Interest Expenses Profit BTCF ATCF Cash Flow Cash Flow
- - -
2017 0 0 0 0 0 0 0 0 0 0 11,475,568 11,475,567 11,475,567
2018 4752 36,115,200 36,734,672 119,933 205,794 36,854,606 1,113,130 38,769,383 -739,406 -2,058,330 -1,955,413 -1,749,619 -13,225,187
2019 5049 38,372,400 36,734,672 119,933 185,214 36,854,606 890,504 38,492,684 1,517,794 442,075 419,971 605,186 -12,620,001
2020 5643 2,886,800 36,734,672 119,933 166,693 36,854,606 667,878 38,269,267 6,032,194 5,917,622 4,937,741 5,104,434 -7,515,566
2021 5940 45,144,000 36,734,672 119,933 150,023 36,854,606 445,252 38,047,701 8,289,394 7,694,118 7,309,412 7,459,435 -56,130
2022 5940 45,144,000 36,734,672 119,933 135,021 36,854,606 226,626 37,827,803 8,289,394 7,931,746 7,535,159 7,670,180 7,614,049
7,600
2023 5940 45,144,000 36,734,672 119,933 121,519 36,854,606 0 37,609,405 8,289,394 8,167,874 7,759,480 7,881,000 15,495,049
2024 5940 45,144,000 36,734,672 119,933 109,367 36,854,606 0 37,597,253 8,289,394 8,180,026 7,771,025 7,880,392 23,375,442
2025 5940 45,144,000 36,734,672 119,933 98,430 36,854,606 0 37,586,316 8,289,394 8,190,963 7,781,415 7,879,845 31,255,288
2026 5940 45,144,000 36,734,672 119,933 88,587 36,854,606 0 37,576,473 8,289,394 8,200,806 7,790,765 7,879,353 39,134,641
2027 5940 45,144,000 36,734,672 119,933 79,728 36,854,606 0 37,567,614 8,289,394 8,209,665 7,799,181 7,878,910 47,013,552.
SV 0 0 1,104,627 0 0 0 0 0 0 0 1,104,627 1,104,627 1,104,627
TOTAL 57024 - 433,382,400 367,346,724 1,199,336 1,340 368,546,061 3,339,390 379,343,905 64,836,339 43,793,697 46,777,798 48,118,180 -
69
To ensure that our project and plant production is feasible, Internal Rate of
Return (IRR) should be determined using Net Present Value (NPV) study. The
determination of both parameter is further calculated in the next section. First, we
should decide the WACC (Weighted Average Cost Capital) of our product:
𝑊𝐴𝐶𝐶 = 𝐸𝑞𝑢𝑖𝑡𝑦 𝑐𝑜𝑠𝑡 + 𝐷𝑒𝑏𝑡 𝑐𝑜𝑠𝑡 (2.11)
E D
WACC  Re  Rd (2.12)
V V
Information: Re is cost of equity
Rd is cost of debt
E/V is % financing for equity
D/V is % financing for debt
Cost of debt is rates which is offered by monetary institution such bank that
should be paid . Cost of debt can be calculated with the following equation.
𝑅𝑑 = (𝐷𝑒𝑏𝑡 𝑟𝑎𝑡𝑒 ∗ (1 − 𝑇𝑎𝑥 𝑟𝑎𝑡𝑒)) (2.14)
𝑅𝑑 = (𝑅𝑓 ∗ + (𝛽 ∗ (𝑟𝑖𝑠𝑘 𝑚𝑎𝑟𝑘𝑒𝑡 𝑟𝑎𝑡𝑒 − 𝑅𝑓 )) (2.13)
where Rfis Risk Free Rate (Indonesia’s)

We’ve decided that our equity will be 70% from the bank and 30% from the
investor. The reason for this based on a consideration that bank interest rate is
lower that the investor interest rate and a project of this scale usually does not
interests most of the investor, The risk free rate and risk market of indonesia as
per April 2016 is 7.71% and 10.20%
To calculate cost of debt and cost of equity, we should decide beta factor,
risk free rate and tax to ensure that our project is attractive. Based on literature,
Table 3.43 show WACC variable we obtained the following data.
Table 3. 43 WACC variable
Variable Chemical (Specialty)

Number of Firms 70
Beta 1.18
Cost of Equity 8.59%
E
82.97%
DE
70
Table 3.43 WACC variable (Cont’d)

Std. Dev in Stock 62.90%
Cost of Debt 3.26%
Tax Rate 15.35%
After-Tax Cost of Debt 2.76%
D
17.03%
V
Cost of Capital 7.59%

Tax rate 35%
(Source :http://pages.stern.nyu.edu/~adamodar/New_Home_Page
/datafile/ wacc.html.htm, Accessed May 10th, 2016)
We’ve decide to borrow the money from Bank of Central Asia because it
provides a more secure and stable loan rates than the others bank. Moreover, the
loan rates in BCA is relatively low(10.5%), compared to the others. The tax rate is
35% from UU no 17 tahun 2000. So we can calculate the WACC :
𝑊𝐴𝐶𝐶 = (30% ∗ (7.71% + (1.18 ∗ (10.20% ∗ 7.71%)) − (70% ∗ 10.50%
∗ (1 − 35%)
𝑊𝐴𝐶𝐶 = 7.97%
Based on the literature the deposit interest from the bank (BCA) is 5%. By
comparing the percentage of WACC value and deposit interest, we can see the
WACC value is higher that deposit interest rate from the bank, it means that our
plant is more attractive for investor to invest rather than just depositing their
money to the bank. The value of MARR should be higher or at least the same as
WACC (WACC ≤ MARR) so that we will get profit from our business. For
MARR value, we use 10% as this value is usually used for specialty chemical
projects (7.97% ≤ 10%)
3.3.4 Cash Breakdown

During the manufacturing process, we need a lot of variables; such as raw
material, utilities, labor salary, and vice versa. To determine which variable is the
most dominating variable responsible for the cost, we conduct the cost
breakdown. Cost breakdown can be done by arranging different type of cost into
one pie chart to make it easier to understand.
71
0% 0%
2% Cost Breakdown
0% 0%
0%
0% 0%
7%
Salary
Raw Material
Electricity
Water
Patent
Tax
Insurance
Communication Cost
91% Distribution Cost
Publication and Advertising Cost
Figure 3. 2 Cost Breakdown Diagram
From the cost breakdown above, we can see that the cost that contributes the
most to the total operating cost amount is for raw materials. As we can see the raw
materials take about 90% of total operating cost. It’s imperative to have best
quality of raw material which will make sure that the product will have a great
quality.
The second biggest variable that influenced the production expenditure is
workers’ salary. The workers’ salary is 6% of production cost because we want
the most suitable workers for each station, so we can get the best of we can.
72
CHAPTER 4
PROFITABILITY ANALYSIS
4.1 Rate of Return

Return of investment (ROI) is the annual interest rate made by the profits on
the original investment. ROI provides a snapshot view of the profitability of the
plant, normally using the estimates of the elements of the investment and the pre-
tax or after-tax earnings. For ROI, and all of the approximate profitability
measures of this section, the production cost is computed using straight-line
depreciation, and after some startup period, the plant is assumed to operate each
year at full capacity (or at some percentage of full capacity) for the same number
of days per year. As was stated earlier, many definitions of ROI have been
suggested and used. Here, the most common definition is applied.
annual net profit
ROI  x 100% (4.1)
total capital investment
The amount of annual net profit is Rp 2,946,978,974 while the amount of
total capital investment is Rp 11,475,567,991. Therefore, the calculation of ROI
for Cassathan plant is shown as follows
Rp 2,946,978,974.00
ROI  x 100%
Rp 11,475,567,991.00
ROI  25.68%
Based on the amount of ROI (25.68%) we can see that Greetor production is an
interesting investment for investor, considering the relatively high ROI.

4.2 Payback Period
4.3 Break Even Point

Breakeven point (BEP) is an analysis which is done to define and determine
the amount of goods or services that must be sold to the consumer with a
determined price to cover the costs that emerge and obtain profit. BEP analysis is
very important so that we don’t experience loss during the production. The
payback period of our plant is 4.127 years or equal with 1408 days. Therefore, the
73
amount of production until the 1408th day can be used to determine the breakeven
point. The calculation of BEP is shown in Table 4.1.
Table 4. 1 Breakeven Point Calculation
Sold Cumulative of
Products Sold Product
Years Days Product Sold Product
/day (%)
(Units) (Units)
1 330 18 80% 4752 4752
2 330 18 85% 5049 9801
3 330 18 90% 5346 15147
4 330 18 100% 5940 21087
4.1742 64 18 100% 1152 22239
Based on the calculation in Table 4.1, for a payback period of 1580 days,
the breakeven point is reached for 21,651 products produced
4.4 Internal Rate of Return
Internal rate of return is the maximum interest rate paid on a project that can
still be breakeven at the end of the project life. In other words, internal rate of
return is the interest if the net present value equals to zero. Eq. (3.3) can be used
to determine the IRR.
n T
CFn
NPV    TCI  0 (3.3)
n 1 1  r n
where r is the value of IRR while TCI is the total capital investment. The
calculation of IRR is done by the aid of Microsof Excel software (it already had a
function to calculate IRR for economic analysis). Based on the calculation in Ms.
Excel, the obtained IRR is 27.6%.
The value of IRR must be compared with the MARR that has been
calculated previously to analyse the feasibility of this project. A project can be
determined as a feasible project if the IRR value is greater than MARR value.
From the previous chapter, the value of MARR is 10%, which is the usual
ammount of MARR for chemical. If we compare both value, we can conclude that
the IRR value is greater than MARR value (27.6% > 10%). Therefore, we can
74
also conclude that Greetor plant is a feasible and acceptable project because it can
give profit for the investor.
4.5 Net Present Value

Net Present Value (NPV) is a value that shows the net benefits received by a
project over the life of the project at a certain interest rate. NPV can also be
interpreted as thepresent value of the cash flows generated by the investment.
During the calculation of NPV, we must also determined the relevant interest rate.
For this calculation, we also used the MARR value that has been calculated
before, which is 9.04%. Net present value can be calculated by Eq. (3.4).
CFn
CFn,0 
1  i n (3.4)
where :
 CFn = The net cash flow in time- n
 i = Interest rate used in the project
 n = Time of the project
If NPV is greater than zero, it means that the project is profitable or could
give benefits if it’s executed while if the NPV is less than zero it means that
project is not profitable to run. If NPV value equals to zero, it means that the
project won’t result in any profit or loss. From the calculation with Ms. Excel
application, we obtained the NPV value of Rp 16,097,628,098. Because NPV
value is greater than zero, based on NPV calculation we can conclude that this
project is profitable.
4.6 Sensitivity Analysis
A sensitivity analysis is conducted to determine the effect of percentage changes
in pertinent variables on the profitability of the project. Such an analysis indicates
which variables are most susceptible to change and need further study (Perry,
2007).
4.6.1 Product Price Fluctuation

This type of sensitivity analysis was performed based on the fluctuation of
product sales price. The calculation of this analysis is done is shown in Table 3.3.
The parameter which is observed in this calculation is the change in economic
75
viability parameter such as NPV, IRR, adn PBP if there is a decline in the level of
product sales. When a decline in the selling price is occur, the percentage of IRR
obtained will be smaller, which means the rate of return will become longer until
it is undefined. On the other hand, it is known that lower selling price will cause a
longer payback period.
Table 4. 2 Selling Price Fluctuations
Change Product Price per Unit IRR NPV PBP (years)

-15% 6,408,928.44 -16.7% (17,560,826,775) N/A
-10% 6,785,924.24 2.2% (6,341,341,817) 9.110
-5% 7,162,920.03 15.5% 4,878,143,141 5.690
0% 7,539,915.82 27.6% 16,097,628,099 4.174
5% 7,916,911.61 39.2% 27,317,113,057 3.310
10% 8,293,907.40 50.9% 38,536,598,014 3.040
15% 8,670,903.19 62.8% 49,756,082,972 2.240
4.6.2 Raw Material Cost Changes
Sensitivity analysis was also performed on the change of the operational
costs of this product. Change of cost that influences production activities can also
affect the NPV value. If the cost increase, NPV value tends to be smaller, while if
the cost decrease, otherwise will happen. Along with NPV, IRR will also decrease
by the change or increase in cost. A longer payback period will also be obtained if
the cost that influences production process increase.
A fiable factory is a factory that can’t be easily swayed by the change in
these costs despite in the cost breakdown it can be seen that production process
definitey influence by the cost of raw materials. Table 3.4 shows raw material pric
fluctuation.
Table 4. 3 Raw material price fluctuation
Change Operational Labor IRR (%) NPV (Rp) PBP

(%) Wage (Rp) (years)
-15 28,435,593,362.25 57.2% 42,726,749,653.47 2.380
-10 30,108,275,324.73 47.0% 33,850,375,801.89 2.860
76
-5 31,780,957,287.22 37.2% 24,974,001,950.31 3.420

0 33,453,639,249.70 27.6% 16,097,628,099 4.174
5 35,126,321,212.19 18.0% 7,221,254,247.14 5.320
10 36,799,003,174.67 8.1% (1,655,119,604.44) 7.25
15 38,471,685,137.16 -2.9% (10,531,493,456.02) N/A
4.6.3 Operation Cost Changes

This sensitivity analysis was performed on the change of the operational
costs of the product. The observed parameter in this analysis is also the change in
economic viability parameter (NPV, PBP, and IRR). The increase in operating
expenses to support the production activities will cause a change in NPV. NPV
value will be smaller by the increase of operational costs. The change in
operational cost will also cause the change in IRR value. Increasing labor cost or
operating cost will decrease the value of IRR. Lower IRR value means that the
return will be smaller (become less profitable). Aside form NPV and IRR, PBP
value will also change as the result of change in labor cost. PBP tends to be longer
if the labor cost increases.
Table 4. 4 Operating Labour Wage Fluctuation
Change Operational Labor IRR NPV (Rp) PBP

(%) Wage (Rp) (%) (years)
-15 1,685,769,300.00 31.2% 19,461,159,468 3.850
-10 1,983,258,000.00 29.5% 17,882,484,635 4.000
-5 2,203,620,000.00 28.2% 16,713,095,870 4.112
0 2,319,600,000.00 27.6% 16,097,628,099 4.174
5 2,435,580,000.00 26.9% 15,482,160,328 4.237
10 2,679,138,000.00 25.5% 14,189,678,008 4.378
15 3,081,008,700.00 23.2% 12,057,082,181 4.631
77
4.6.4 Fluctuation Graphics

There are 3 graphic in this sub chapter.
 Net Present Value
60
50
40
NPV (Billion Rp)
30
20
10
0
-20% -15% -10% -5% 0% 5% 10% 15% 20%
-10
-20
-30
Change
Product Price Raw Materials Labor Cost
Figure 4. 1 .Graphic of Net Present Value Fluctuation

From graphic above, it can be seen that the influence of labor cost is not
significant, but it causes changes in NPV. Greetor raw materials and product price
cost caused NPV changed significantly. The increasing of product cost causes the
increase of NPV, whereas the increase of raw materials cost causes a decline of
NPV.
 Internal Rate of Return
70%
60%
50%
40%
30%
IRR
20%
10%
0%
-20% -15% -10% -5% -10% 0% 5% 10% 15% 20%
-20%
-30%
Change
Figure 4. 2 Graphic of Internal Rate of Return Fluctuation
78
From figure 4.2, it can be seen that the influence of operating labors is not
significant but it causes changes in IRR. The increase of product price cause a
bigger value of IRR while the inrease of raw materials cost causes a decreasing
IRR.
 Payback Period (PBP)
10
9
8
7
Payback Period
6
5
4
3
2
1
0
-20% -15% -10% -5% 0% 5% 10% 15% 20%
Change
Figure 4. 3 Graphic of Payback Period Fluctuation
From figure 4.3, it can be seen that the influence of labor cost is not that
significant, but it causes changes in PBP. The raw materials cost causes the
highest fluctuation at value of more than 5% change of raw material cost. The
increasing of raw material cost causes a rise of PBP while an increase of product
price results in a decline of PBP.
CHAPTER 5
CONCLUSION
REFERENCE
vi Universitas Indonesia

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i

SOIL HARDENING AGENT FOR NEW ROAD OPENING

Aditya Haryanto (1506673492)

CHEMICAL ENGINEERING DEPARTMENT

EXECUTIVE SUMMARY .................................................................................. II

Figure 1. 1 Plant Location from Satelite ................................................................. 8

Table 1. 1 Raw material and Packaging supplier list ............................................ 10

1.1 Plant Location

d. Infrastructure facilities such as roads, accessibility to railway station, airport

Figure 1. 1 Plant Location from Satelite

Figure 1. 2 Plant Location

Table 1. 1 Raw material and Packaging supplier list

No. Ingredient Price ($/Unit) Supplier

1. PT. Samira Schem Indonesia

5 Disponil LDBS 55 2.31 1. PT. Graha Jaya PratamaKinerja

1. PT. Sarana Mitra Inti Global

7 Hydroxyethylcellulose 10.18 1. PT. CorticoMulia Sejahtera

12 Sodium Acetate 27.5 1. CV Berlian Kimia

Ethoxylate Fatty Alcohol

Drum type ...

Total January February March April May June

Table 1. 5 Raw Material Order (Cont’d)

Total July August September October November December

Tannin Extract Potassium Iodide Salt Orange Fragrance Water

Figure 1.2 Graphic raw materials inventory chart per month

Figure 1.3 Graphic packaging material inventory chart per month

1.3.1 Product Distribution Location

Table 1. 6 Percentage Distribution To 6 Regions

Figure 1. 3 Product Distribution Chain

Table 1. 8 Distribution Cost of Truck due to Distance

These trucks that we use in the product distribution can be estimated

1.4.2 Product Inventor

2.1 Market Segmentation

Greetor is manufactured in Cilegon, Banten which comprises of plant and

The initial investment cost is known as Total Capital Investment (TCI). An

TCI  FC  FW  1   FC (3.1)

3.3.1.1 Direct cost

Table 3. 1 Marshall and Swift Chemical Equipment Cost Index

Year Cost Index

Table 3. 2 Forecasting Marshall and Swift’s chemical equipment cost index

Year Cost Index

Table 3. 3 List Of Bare-Module Factor

(Source: Seider et al., 2004)

Total bare module cost = 

Table 3. 4 Bare module cost

TOTAL BARE MODULE COST

b) Plant Building and Site Cost

Table 3. 5 Land cost

Table 3. 6 Building cost

Description Price (Rp) Area (m2) Total Price (Rp)

Table 3. 7 Supporting facilities investment cost

Table 3. 8 Supporting facilities investment cost (con’d)

Equipment Price (Rp) Quantity Total Price (Rp)

Printer & Photocopy

Installation Note Cost (Rp)

e) Market Research Cost

No. Non-Tax Revenue Unit Cost (Rp) Qty. Total (Rp)

Table 3. 11 Brand Fee Details

License agreement Per