Klabat Journal of Management Volume 7 Number 1
February 2026
Page: 115-126
ISSN: 2721-690X
P-ISSN: 2722-726X
DOI: https://doi.
org/10.
60090/kjm.
Feasibility Analysis of Industrial Waste Reduction Investment:
Potential of Fruit Basket and Mat Products Rahmad Fajri Anasrul1.
Afrido2.
Aloysius Kalis Tristiadi3.
Ayu Swilugar4.
Caesarius Haryo Bagaskara5 & Jessica Vyanti6 1 Universitas Gadjah Mada.
Indonesia.
rahmadfajrianasrul@mail.
2 Universitas Gadjah Mada.
Indonesia.
afrido2000@mail.
3 Universitas Gadjah Mada.
Indonesia.
aloysiuskalistristiadi@mail.
4 Universitas Gadjah Mada.
Indonesia.
ayuswilugar@mail.
5 Universitas Gadjah Mada.
Indonesia.
caesariusharyobagaskarastrt@mail.
6 Universitas Gadjah Mada.
Indonesia.
jessicavyanti@mail.
Article History Abstract Received:
5 July 2025 Unprocessed waste has become a major issue in the world today.
In 2021.
Indonesia's environmental statistics recorded that approximately 24.
5% of the total waste generated was not properly managed.
One of the subjects of this issue is palm oil and textiles.
Palm oil is a commodity that has experienced rapid growth, with a growth rate of 22.
72% from 2017 to 2018.
Meanwhile, textile waste is commonly found, especially in garment companies.
This research aims to conduct an investment feasibility analysis from a financial perspective for industrial waste reduction, focusing on the business potential of fruit baskets made from palm oil waste and mats made from fabric scraps.
The products generated from this waste can provide a sustainable solution while also generating financial profit.
Therefore, a feasibility analysis was carried out for these two products.
The investment feasibility analysis method is used to evaluate the potential success of these two waste-reducing products.
The feasibility analysis involves calculating initial costs, revenue, operational costs, and cash flow projections over a certain period.
Additionally, various risk factors and relevant assumptions are also considered in this analysis.
The results of the feasibility analysis conclude that the fruit basket made from palm oil waste is more feasible than the mat made from fabric scraps.
fabric scrap mat.
feasibility analysis.
fruit basket.
industrial waste.
sustainable business.
Revised:
5 August 2025 Accepted:
1 October 2025 Keywords Corresponding Author Rahmad Fajri Anasrul Universitas Gadjah Mada.
Indonesia.
rahmadfajrianasrul@mail.
INTRODUCTION
Waste is one of the main challenges in environmental management in Indonesia.
Improper waste management can contaminate soil, water, and air, and contribute to ecosystem degradation and human health problems (Mandataris, 2.
According to the 2021 Environmental Statistics data from the Badan Pusat Statistik (BPS), approximately 24.
5% of total waste in Indonesia is not properly managed.
This highlights the need for serious efforts in waste reduction and utilization, especially solid waste from industrial and household sectors.
Copyright @2026.
FEB UNKLAB | ISSN: 2721-723X.
E-ISSN: 2722-7278 Klabat Journal of Management | Vol.
7 | No.
1 | February 2026 Two types of waste that are abundant but not optimally utilized are palm oil fronds and textile Palm oil fronds come from the palm oil plantation industry, which continues to grow in Indonesia.
Palm oil commodities have become one of the main pillars of the national economy, with production reaching 42.
88 million tons in 2018 and a planted area of 14.
32 million hectares (Dumaria.
However, the increase in production also results in a rise in organic waste such as palm fronds, which are often underutilized.
Meanwhile, textile waste is largely generated by the garment and textile industries and is considered an inorganic waste that is difficult to decompose.
According to the Kementerian Perencanaan Pembangunan Nasional (Kementerian PPN).
Indonesia generated around 2.
3 million tons of textile waste in 2021, accounting for 12% of total household waste.
This waste is often left to accumulate as residual waste that has no economic value (Parikesit, 2.
Despite the growing awareness of waste-to-product innovation, existing studies tend to focus on large-scale industrial conversion technologies or generic recycling efforts, leaving a research gap in evaluating small-scale, community-based waste product ventures from an investment feasibility There is limited literature analyzing how low-cost waste-based products, such as household items made from palm fronds or fabric scraps, perform in terms of financial viability using comprehensive investment criteria.
This study stems from the need to identify solutions for waste management based on economically valuable products using a grass-root approach.
One of the approaches is to process palm fronds into fruit baskets and textile waste into doormats.
Through a waste-to-product approach and financial feasibility evaluation, this study aims to compare these two product alternatives and determine which business option is the most financially viable.
Therefore, the objective of this study is to evaluate the investment feasibility of two types of wastebased household productsAifruit baskets made from palm oil fronds and mats made from textile waste by calculating and comparing key financial indicators such as Net Present Value (NPV).
Internal Rate of Return (IRR).
Payback Period (PBP).
Profitability Index (PI).
Benefit-Cost Ratio (B/C), and BreakEven Point (BEP).
The focus of the research is on the environmental contribution as well as the entrepreneurial opportunities from utilizing abundant local waste that has yet to be optimally LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT Waste Management and Circular Economy Waste is a significant environmental issue, both in terms of pollution and its impacts on human Waste types are classified based on chemical compounds .
rganic, inorganic, hazardou.
, form .
olid, liquid, ga.
, and sources .
ouseholds, industry, agriculture, medical, etc.
The circular economy approach emphasizes minimizing waste and maximizing resource utilization by transforming waste into value-added products (Mandataris, 2.
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FEB UNKLAB | ISSN: 2721-723X.
E-ISSN: 2722-7278 Klabat Journal of Management | Vol.
7 | No.
1 | February 2026 Palm Oil Waste Utilization One source of waste that has not been optimally utilized is waste from the plantation sector, particularly palm oil fronds.
Palm oil is a strategic commodity with a significant contribution to the national economy.
Palm oil production increased significantly from 34.
94 million tons to 42.
88 million tons between 2017 and 2018 (Dumaria, 2.
This increase in production also generates a considerable amount of organic waste, including palm fronds, which are generally discarded or used as low-value According to Abdullah and Sulaiman .
, palm frond waste has the potential to be processed into functional products such as fruit baskets.
However, in practice, this potential has not been widely realized in small-scale industries or local businesses.
Textile Waste Utilization Textile waste is another underutilized waste stream, especially from the garment and textile Classified as inorganic and difficult to decompose, textile waste often ends up in landfills.
According to Parikesit .
, such waste is frequently treated as valueless trash.
The Kementerian PPN .
reports that 2.
3 million tons of textile waste are generated annually in Indonesia, contributing to approximately 12% of total household waste.
This volume highlights a significant opportunity to explore fabric waste as a raw material for durable, low-cost products such as mats or rugs.
Financial Feasibility in Waste-Based Product Businesses Previous studies have explored investment evaluation for conventional business models, yet there is still limited literature analyzing financial viability for waste-based product ventures, especially those operating at a household or micro-industry scale.
Feasibility analysis using financial indicators such as Net Present Value (NPV).
Internal Rate of Return (IRR).
Payback Period (PBP).
Profitability Index (PI).
Benefit-Cost Ratio (B/C Rati.
, and Break-Even Point (BEP) provides a structured way to assess investment worthiness (Pasqual et al.
, 2013.
Iankovyi, 2021.
Pathak, 2024.
Rahmawati & Drianti, 2024.
Akhiroh et al.
, 2.
Considering the low utilization of industrial waste, the availability of palm frond and textile scrap materials, and the opportunity to transform them into marketable products, this study adopts the following hypothesis:
H1: The utilization of palm oil fronds and textile waste into marketable household products is a financially viable business, as indicated by the following investment indicators: NPV Ou 0.
IRR Ou 6%.
Payback Period < minimum period.
PI > 1.
B/C Ratio > 1, and achieving BEP within a realistic timeframe.
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RESEARCH METHOD
Data Collection This study uses both primary and secondary data.
Primary data were collected through direct interviews with eight selected sellers on online marketplaces, focusing on products similar to the fruit baskets and mats under study.
The criteria for selection included seller activity, customer review count, and product similarity.
Secondary data were obtained from official websites, journals, and government reports.
These included data on machine and tool prices, national economic indicators, and related case studies of waste product utilization.
The collected data included:
Raw material prices .
, palm fronds, fabric scrap.
Production tools and equipment cost.
Daily production capacity.
Product pricing and market demand.
Operational and maintenance costs.
The aim was to build realistic assumptions for financial modeling and feasibility calculations.
Investment Evaluation Criteria The investment evaluation in this study was done by analyzing the financial performance of a business based on cash flow criteria.
The methods used include Net Present Value (NPV).
Internal Rate of Return (IRR).
Payback Period (PBP).
Profitability Index (PI).
Benefit-Cost Ratio (B/C Rati.
, and Break-Even Point (BEP).
The formulation and indicators for each criterion are as follows:
Net Present Value (NPV) NPV is a method used to calculate the difference between the cost of investment expenditure and the present value based on net cash inflows (Pasqual et al.
, 2.
The formula for calculating NPV is as follows:
NPV = Ocycuyc=1 ycIyc Oeyaycyc Oe ya .
Where:
ycI, : revenue in year t ya, : cost in year t yc : discount rate ya : initial investment Investment feasibility criteria based on NPV:
Investment is feasible if NPV Ou 0 .
Investment is not feasible if NPV < 0 .
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FEB UNKLAB | ISSN: 2721-723X.
E-ISSN: 2722-7278
Klabat Journal of Management | Vol.
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1 | February 2026 Internal Rate of Return (IRR) IRR is an indicator of the efficiency level of an investment.
IRR is also known as a method to calculate the interest rate of an investment, equating the investment value and current expenditure based on net future cash inflows.
Therefore, the IRR value shows an equivalent cost/expenditure value equal to the equivalent income value (Iankovyi, 2.
IRR is the rate r at which:
NPV = 0 = Ocycuyc=1 ycIyc Oeyaycyc Oe ya .
IRR is computed through interpolation between two discount rates resulting in positive and negative NPV.
Payback Period (PBP) PBP is a method used to measure the length of time required to recover the investment from the annual cash inflows generated by the investment project.
The unit of measurement is time.
The faster or shorter the period required to recover the investment, the better the investment (Al Rasyid, 2.
The formula for calculating PBP is as follows:
Payback Period = "#$%$&' "#)* %,*#% -##.
&' /*% 0& 1 "#2'34
Investment feasibility criteria based on PBP:
Investment is feasible if PBP < minimum payback period.
Investment is not feasible if PBP Ou minimum payback period.
Profitability Index (PI) This method is used to compare the current investment value plus the future net cash flows with the current investment value.
An investment will be considered feasible if PI > 1, and the higher the PI value, the better the investment (Pathak, 2.
The formula for calculating the PI is as follows:
PI = 567879: .
<=>7 ?@ A>:>67 B<8C A=?D8
E9F:F<= E9G78:H79:
Benefit-Cost Ratio (B/C Rati.
This method is used to compare various risk reduction actions by estimating costs and benefits, providing a measure for decision-making.
It can be used to assess the efficiency of an The B/C Ratio compares the total economic benefits of an investment with the total cost of the investment.
This is used to determine whether an investment is profitable or not.
The analysis compares benefits to costs, and the larger the benefit-to-cost ratio, the more profitable the investment will be (Rahmawati & Drianti, 2.
B/C Ratio is expressed as a ratio, where a value greater than 1 indicates that the expected benefits of the investment outweigh the costs The higher the B/C Ratio, the better the investment (Yi et al.
, 2.
The formula for B/C Ratio is as follows:
B/C Ratio = I?:<= 567879: .
<=>7 ?@ J797@F:8
I?:<= 567879: .
<=>7 ? B?8:8
Break Even Point (BEP) Copyright @2026.
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Klabat Journal of Management | Vol.
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1 | February 2026 BEP is defined as the break-even point or the state of an investment when it neither makes a profit nor incurs a loss.
This method analyzes the minimum number of units sold to reach the break-even point or avoid losses, which is known as BEP (Unit.
Additionally, this method also looks at the sales value of the units sold, to determine the minimum sales value required to reach the break-even point, referred to as BEP (Revenu.
(Akhiroh et al.
, 2.
The formulas used are as follows:
BEP (Uni.
AFK7L B?8:
(N7==F9O 56FP7 Q76 >9F: R .
<6F<S=7 B?8: Q76 >9F:)
BEP (Revenu.
= yaAyaycE .
cOycuycnycy.
y ycIyceycoycoycnycuyci ycEycycnycayce ycyyceyc ycycuycnyc Selection of the Chosen Business Alternative The selection of the chosen business alternative is made by considering the results of calculations from several investment feasibility analysis methods above.
The selected business alternative will be considered by comparing the investment feasibility analysis results of both The chosen alternative will show the highest NPV, the smallest Payback Period, the highest IRR (Ou 6%), the highest Profitability Index, and the highest B/C Ratio.
These metrics are chosen because they provide a comprehensive picture of the financial performance of each business alternative.
For example.
NPV is used to determine the present value of net profits generated by the project.
IRR shows the relative efficiency of the project.
PBP measures the speed of capital recovery for small-medium enterprises.
PI shows the effectiveness of investment relative to the value produced.
B/C Ratio compares the benefits and costs, and BEP shows the minimum break-even point to avoid losses.
The selection of these six methods is relevant for comparing two products that have different costs, market potential, and production scales.
RESULTS AND DISCUSSIONS
Funding and Capital Requirements The funding and capital required for this report come from previously received costs for production and operational needs.
The costs involved include fixed costs, raw material costs, variable costs, depreciation costs, and investment costs.
These result in the cost of goods sold for each product.
Fixed costs include labor costs and operational expenses.
Raw material costs cover the expenses of purchasing the necessary materials for the production process.
Variable costs include supporting costs used in the production process.
Depreciation costs are associated with the wear and tear of machines and other equipment used in the production process.
Meanwhile, investment costs involve the capital required to start the production process.
Below is an explanation of the funding requirements for each product.
summary of the investment costs for each business is shown in Table 1.
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FEB UNKLAB | ISSN: 2721-723X.
E-ISSN: 2722-7278 Klabat Journal of Management | Vol.
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1 | February 2026 Table 1.
Financial Summary of Each Business Description Fruit Basket (R.
Fabric Scrap Mat (R.
Investment Costs 51,103,000 110,131,440 Inventory Value 37,968,000 30,240,000 Depreciation 3,426,800 2,500,000 Operational Costs 58,084,900 97,631,440 Production Capacity The annual production capacity for each product .
usiness alternativ.
is determined by multiplying the daily production quantity by the number of working days in a year.
The target production per day for the fruit baskets is 20 pieces per day.
This number is based on a market share of 10% from similar competitors in Central Java and Yogyakarta.
Meanwhile, the fabric scrap doormats target production is 30 pieces per day, based on a market share of 15% from similar competitors in Klaten Regency.
There is a difference in business management for the fruit basket, which operates with 6 working days .
ith Sunday of.
, while the fabric scrap doormat operates with a shifting system for 7 working days, as explained in Table 2.
Table 2.
Production Capacity of Each Business Business Type Fruit Basket Fabric Scrap Mat Main Materials Palm Fronds Wood Paint Fox Glue Spray Paint Machine Cutter Knife Gloves Assembly Table Chairs Drying Wire Fabric Scraps Sewing Thread Sewing Machine Needles Capacity .
cs per yea.
Working Days 6,260 10,800 Copyright @2026.
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1 | February 2026 Annual Revenue Projection The annual revenue projection is part of the calculation of the Cost of Goods Sold (COGS).
The annual revenue is obtained by multiplying the selling price per unit by the number of units produced in a year.
This annual revenue will be used for investment feasibility analysis.
Table 3 shows the revenue projection for the business alternatives.
Fruit Basket and Fabric Scrap Mat.
Table 3.
Annual Business Revenue Projections Business Type Fruit Basket Revenue (R.
93,790,112 Fabric Scrap Mat
162,000,000
Cash Flow Table 4 shows the cash inflows and outflows for both business alternatives in this study.
The cash flow presented in Table 4 reflects the difference between the annual revenue and expenses, accumulated over the years.
Tabel 4.
Net Cash Flow Period 0 (R.
1 (R.
2 (R.
3 (R.
4 (R.
5 (R.
Fruit Basket
-51,103,000 -11,868,488 27,366,024 66,600,536 105,835,048 146,409,560
Fabric Scrap Mat
-110,131,440 -43,328,157 23,475,124 90,278,406 157,081,688 224,384,971
Evaluation Characteristics After performing the investment feasibility analysis for each alternative using several methods, the results will be compared, and the alternatives will be ranked to determine which is the better choice based on each investment evaluation method.
Table 5 shows the comparison of each product.
Tabel 5.
Investment Feasibility Analysis Summary Description Fruit Basket
Fabric Scrap Mat
NPV
Rp115,154,147 Rp171,617,634.
PBP
30 Years 65 Years IRR B/C Ratio BEP (Uni.
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FEB UNKLAB | ISSN: 2721-723X.
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1 | February 2026 Figure 1.
Comparison of Feasibility Indicators for Two Waste-Based Products Based on Figure 1, the fruit basket product demonstrates stronger investment performance across several key indicators compared to the fabric scrap mat.
The Internal Rate of Return (IRR) for the fruit basket reaches 72.
54%, which is significantly higher than the mat's IRR of 53.
This indicates that, relative to the initial capital invested, the fruit basket business is able to generate returns more This is primarily due to its lower operational costs and smaller initial investment, which enhance capital productivity.
Although the Net Present Value (NPV) of the fabric scrap mat is higher (Rp171,617,634.
than that of the fruit basket (Rp115,154,.
, this is attributed to its larger cash inflows over time.
However, the higher NPV comes at the cost of greater upfront investment and operational complexity, such as equipment and rental expenses.
The Payback Period (PBP) further reinforces the fruit basketAos advantage in efficiency, requiring only 1.
30 years to recover its initial investment, compared to 1.
years for the mat.
A shorter PBP implies a faster return on investment and reduced financial risk.
In terms of the Profitability Index (PI), the fruit basket scores 3.
30, higher than the mat's 2.
suggesting that each rupiah invested in the fruit basket yields greater value.
Similarly, the Benefit-Cost Copyright @2026.
FEB UNKLAB | ISSN: 2721-723X.
E-ISSN: 2722-7278 Klabat Journal of Management | Vol.
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1 | February 2026 (B/C) Ratio of the fruit basket .
exceeds that of the mat .
, indicating better cost-benefit However, the Break-Even Point (BEP) in units for the fruit basket is 2,853, which is higher than the matAos 2,089.
This means the fruit basket must sell more units to reach a point where costs are fully covered.
While this indicates a higher sales threshold, it does not offset the overall superior performance of the fruit basket in other investment criteria.
CONCLUSION
Based on the investment feasibility analysis, it can be concluded that the fruit basket business alternative, which utilizes palm fronds, is more financially feasible than the fabric scrap mat alternative.
This conclusion is supported by superior performance in four key indicators, namely Payback Period (PBP).
Internal Rate of Return (IRR).
Profitability Index (PI), and Benefit-Cost Ratio (B/C Rati.
Although the fabric scrap mat shows a higher Net Present Value (NPV) and a lower Break-Even Point (BEP) in units, the overall investment efficiency and capital recovery speed favor the fruit basket Both products, however, demonstrate strong alignment with circular economy principles by transforming underutilized industrial waste into value-added household items.
These initiatives not only reduce environmental burdens but also present opportunities for micro-enterprises and local economic development.
Despite these promising outcomes, the study has several limitations.
Key external variables such as tax obligations, potential government subsidies, and regulatory compliance costs were not included in the financial analysis.
Additionally, the market share estimates were based on simplified assumptions without empirical consumer demand validation.
Therefore, the following actionable recommendations are proposed:
Incorporate fiscal variables .
, corporate tax, subsidies, incentives from waste-to-product program.
into future financial models (Ahmad and Satrovic, 2.
, to obtain a more realistic investment projection.
Develop community-based production models (Sun, 2.
, especially for fruit baskets, to industrial-scale .
Explore partnerships with local governments to access technical assistance, funding support, and distribution networks for sustainable product ventures (Li & Wang, 2.
Conduct life cycle assessments (LCA) in future studies to quantify the environmental impact reduction of each product (Camilis & Goralczyk, 2.
, strengthening their value proposition in sustainability-focused markets.
With these steps, future initiatives can enhance both the economic viability and environmental impact of industrial waste utilization projects, turning them into scalable and inclusive solutions for sustainable Copyright @2026.
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Reference