Analysis of Brown Crepe Industry Performance in Banjar Regency South Kalimantan Province Indonesia
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This study aims to calculate the value added of unused rubber into brown crepe (BC) as an effort to increase farmers' income. The results of this study were expected to formulate strategies for BC business. Cigar Box approach was used to understand cost structure and revenue of BC and predict financial performance of the business. The results showed that variable cost was Rp 5,578.00/kg, and fixed cost was Rp 392.00/unit of product. Value added produced was Rp 2,005.00/kg (32.34%). Furthermore, the profit incurred was Rp 230.00/kg (3.84% of selling price), while the gross margin is Rp 622.00/kg (10.03%). This level was considered very risky because it is far from the normal level (≥25%). On the other hand, this business should be encouraged since it provides additional income for farmers by selling the unused rubber products. Increasing gross margin can be done by reducing variable costs and/or increasing revenue. Variable costs can be lowered by decreasing the cost of procuring raw materials. The second option was to return investor’s fund. Another alternative was to increase selling price. This option was more likely since there was few BC manufacturers in the area. Several scenarios were prepared for business planning. The scenario that gave a minimum gross margin of 25% when raw material price decreased by 10%, and BC selling price was increased by 10%. However, when investor’s fee removed, the reduction in the price of raw materials was only 8%, and so the BC selling price only needed to increase by 8%.
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