The financial feasibility of the sago drying business in Sago Technopark of Palopo City, South Sulawesi, Indonesia

Abstract

The sago industry still gives benefit to local people in Palopo City, South Sulawesi, Indonesia. However, sago starch is mostly produced by local farmers in the form of wet due to limited access to drying machines. This study aims to determine the feasibility of the sago drying business, both with and without government subsidy. The results show that the sago drying business with government subsidy is feasible in undiscounted criterion and discounted criterion. Meanwhile, the financial analysis showed that the sago dry business without subsidy is feasible in undiscounted criterion but not feasible in the discounted criterion. In order to make drying sago business without subsidy feasible in the discounted criterion, the selling price of dried sago starch should be increased by 10% from the price of Rp 13,000/kg to Rp 14,300/kg.